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Mortgage reinsurance attracts scrutiny from watchdog agency

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The Consumer Financial Protection Bureau is looking into whether one of the nation's largest mortgage lenders violated the Real Estate Settlement Procedures Act by reinsuring loans for private mortgage insurers it referred business to.PHH Corp. -- whose PHH Home Loans LLC subsidiary is jointly owned by real estate franchisor Realogy Corp. -- says it stopped reinsuring loans in 2009, and the company maintains that its practices up to that point complied with RESPA.A spokeswoman for PHH said today that the investigation is ongoing and the company has no further comment, and a Realogy spokesman said that company had no comment on the Consumer Financial Protection Bureau's investigation of PHH's reinsurance business.In wrapping up a multiyear investigation in 2009, the inspector general of the Department of Housing and Urban Development (HUD) estimated that beginning in the 1990s, mortgage insurers funneled $6 billion in insurance premiums to lenders for reinsuring loans. But HUD reporte...