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the latest SERVICING Or ig i nat ion CFPB Targets Private Insurer over Alleged Kickbacks Agency cracked down on negligent activity in 2013. s e r v ic i ng R Based on its argument that the state failed to prove any deceptive or fraudulent practices, Safeguard is seeking dismissal of the suit entirely. Preserving Property Safeguard fights complaint, alleging wrongful evictions. each month). They also refute claims that Safeguard misled consumers to believe they needed to vacate the property when they were legally allowed to stay: "The state contends that Safeguard deceived mortgagors by placing a sticker on the door of properties found to be vacant. But the sticker attached as an exhibit to the state's own complaint is not misleading at all; it merely informs the reader of the vacancy determination and asks the reader to call Safeguard if the home is actually occupied," the motion reads. Out of the four instances highlighted in the complaint, Safeguard says two of the properties involved were vacant (though not abandoned) at the time its vendors performed securing services, while one was declared to be occupied after entry, with all damage repaired. Based on its argument that the state failed to prove any The M Report | 47 se c on da r y m a r k e t S afeguard Properties, LLC, filed a motion to dismiss a complaint brought against the company by Illinois Attorney General Lisa Madigan, who charged Safeguard with illegally evicting homeowners before their foreclosures were finalized. In her complaint, which was filed in Cook County Circuit Court in September, Madigan alleges that Safeguard "has unlawfully dispossessed legal occupants of their homes by breaking into occupied houses, locking the occupants out of their homes, removing the occupants' personal property, and shutting off utilities in the home, often in the face of clear evidence that the property remains legally occupied." In their motion to dismiss, Safeguard's attorneys argue that Madigan's complaint is based on four alleged instances in 2008 (out of the company's estimated 90,000 inspections conducted in the state deceptive or fraudulent practices, Safeguard is seeking dismissal of the suit entirely. In a statement, the company said it has moved to dismiss the complaint "because it is wrong on the facts and wrong on the law." "Every day, consistent with obligations imposed both by federal guidelines and state and local laws, Safeguard vendors inspect properties delinquent on their mortgages and secure those found vacant or abandoned, thereby addressing the epidemic of blight, depressed home values, and criminal activity caused by abandoned homes from the foreclosure crisis that began in 2008 and continues to this day. In focusing on just four allegedly erroneous vacancy determinations by Safeguard vendors over the past five and a half years— when the company currently performs approximately 90,000 property inspections and 7,000 preservations every month in Illinois alone—the lawsuit wrongly attempts to challenge Safeguard's business practices with no factual or legal basis for doing so," the statement went on to say. Safeguard has said it "will continue to defend itself vigorously throughout the course of the litigation." a na ly t ic s epublic Mortgage Insurance Corporation (RMIC) faces a $100,000 fine and enhanced supervision by the Consumer Financial Protection Bureau (CFPB) for allegedly offering illegal kickbacks to lenders in return for business referrals, according to an announcement from CFPB. "The CFPB believes that RMIC provided kickbacks to mortgage lenders by purchasing captive reinsurance that was essentially worthless but was designed to make a profit for the lenders," the bureau said in its announcement. In return for the kickbacks, lenders provided RMIC with referrals for private mortgage insurance business. RMIC has allegedly engaged in these activities, which violate federal consumer laws, for 10 years, according to the CFPB. RMIC could not be reached for comment at the time of publication. "Kickbacks for mortgage insurance referrals are illegal and can drive up costs for consumers seeking to buy a home," said CFPB director Richard Cordray. "The order announced today will put an end to this practice and require RMIC to pay a $100,000 penalty for violating the law," Cordray added. RMIC has agreed to pay the $100,000 fine, end its illegal kickback activities, and report regularly to CFPB regarding compliance. The agency will also be monitoring RMIC. CFPB explained in its announcement that the penalty amount was influenced by the fact that RMIC is "currently under administrative supervision with the North Carolina Department of Insurance due to its inability to honor its payment obligations in full." CFPB filed its proposed consent order with the United States District Court for the Southern District of Florida, and it is awaiting signing by a judge to become effective. The bureau has been cracking down on kickbacks, having already filed similar actions against four other insurers earlier in 2013.