The Consumer Finance Protection Bureau (CFPB) is investigating the mortgage insurance practices of PHH Corp., specifically if the company violated the Real Estate Settlement Procedures Act, a regulatory framework the CFPB enacted on July 21, 2011.
According to a HousingWire article, news of the investigation broke when PHH admitted to the inquiry in a filing with the Securities and Exchange Commission on Tuesday. The filing stated that the CFPB is looking into PHH’s reinsurance business and how it exchanges its reinsurance services for mortgage insurance premiums.
PHH has not reinsured any loans originated after 2009, and considering the CFPB launched its investigation mere days ago, it is not clear whether PHH will face penalties, fines or legal action. In fact, the CFPB has still not issued any press releases or hosted a press conference elaborating upon the reasons for its investigation.
PHH has said it is cooperating with the investigation, which is just the latest setback for the nation’s seventh-largest mortgage lender. After the firm’s credit score was downgraded by Standard & Poor’s in late December, PHH replaced its CEO, installing Glen Messina as president and CEO. Messina quickly had his hands full, though, as the company announced plans the next week to offer a sale of $150 million of its 2017 debt to pay off portion of the $250 million in debt due in April.