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‘Not a close call’: PHH indisputably wins CFPB court battle

Mortgage lender topples regulator in case over whether its captive reinsurance practices violated RESPA
  • In the latest hearing, the court ruled that the CFPB is "unconstitutionally structured" and imposed parameters around the director position.
  • The court also sided with PHH’s RESPA arguments, ruling that captive reinsurance is permissible under RESPA.

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Mortgage lender PHH Corp. is having a very good Tuesday. The company has been battling the Consumer Financial Protection Bureau (CFPB) over its mortgage insurance practices since 2014, when the CFPB alleged that PHH referred consumers to preferred mortgage insurer partners and took reinsurance fees as kickbacks. Read Inman's comprehensive explanation of the court case Today, PHH scored a big coup over the CFPB when a federal appeals court declared the structure of the mortgage industry regulator unconstitutional and negated its controversial interpretation of key portions of the Real Estate Settlement Procedures Act (RESPA). For six months, the mortgage and real estate industries have anxiously awaited the decision of the U.S. Court of Appeals for the District of Columbia, for two reasons: The lawsuit marked the first time a company targeted by the CFPB fought back against the bureau for taking punitive action against it. It involves a huge enforcement penalty of $10...