The Consumer Financial Protection Bureau (CFPB) today announced that it has initiated an administrative proceeding against and is seeking a civil fine, a permanent injunction to prevent future violations and victim restitution from the New Jersey-based PHH Corporation as well as its residential mortgage origination subsidiaries, PHH Mortgage Corporation and PHH Home Loans LLC, and its wholly-owned subsidiaries, Atrium Insurance Corporation and Atrium Reinsurance Corporation, for their involvement in a mortgage insurance kickback scheme that started as early as 1995. An investigation into the matter was initiated by the Office of Inspector General at the Department of Housing and Urban Development (HUD) and was transferred to the CFPB in July 2011. Based on its investigation, the bureau determined that from 1995 to at least 2009, "PHH manipulated its allocation of mortgage insurance business to maximize reinsurance payments for itself" by using mortgage reinsurance arrangements "to solicit and collect illegal kickback payments and unearned fees" through its affiliates in exchange for the referral of private mortgage insurance business. The bureau alleges that PHH collected hundreds of millions of dollars in kickbacks over the approximately 15-year scheme; that PHH in some cases "charged more money for loans to consumers who did not buy mortgage insurance from one of its kickback partners"; and that it pressured mortgage insurers to "purchase" its reinsurance "with the understanding or agreement that the insurers would then receive borrower referrals from PHH." In 2013, the bureau reached settlements with five mortgage insurers who "participated in similar schemes" (See our Jan 17, 2014, blog post – "CFPB orders the Fidelity Mortgage Corporation to pay $81,076 for an illegal kickback scheme"). For more, read the full news release.