November 20, 2018

November 20, 2018

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November 19, 2018

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CFPB dismisses PHH case

As expected, CFPB Acting Director Mick Mulvaney has signed an order directing that the Notice of Charges filed against PHH be dismissed and terminating the matter.  The order indicates, that in dismissing the matter, Mr. Mulvaney accepted the recommendation made jointly by the CFPB and PHH that the matter be dismissed.

The order recites that on January 31, 2018, the D.C. Circuit issued its en banc PHH decision reinstating the RESPA-related portions of the D.C. Circuit’s panel decision.  The panel had held that the plain language of RESPA permits captive mortgage re-insurance arrangements like the one at issue in the PHH case, if the mortgage re-insurers are paid no more than the reasonable value of the services they provide.  The order states that “it is now the law of this case that PHH did not violate RESPA if it charged no more than the reasonable market value for the reinsurance it required the mortgage insurers to purchase, even if the reinsurance was a quid pro quo for referrals.”

PHH issued a press release about the dismissal in which it commented that the CFPB’s order “is consistent with our long-held view that we complied with RESPA and other laws applicable to our former mortgage reinsurance activities in all respects.”

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About this Author

Richard J. Andreano, Jr. , Ballard Spahr Law Frim, Washington DC,  Business and Finance attorney, Mortgage Banking, Consumer Financial Services, Fair Lending

Richard J. Andreano, Jr., is the Practice Leader of Ballard Spahr's Mortgage Banking Group. He has devoted 30 years of practice to financial services, mortgage banking, and consumer finance law.

Mr. Andreano advises banks, lenders, brokers, home builders, title companies, real estate professionals, and other settlement providers on regulatory compliance and transactional matters, Federal Housing Administration (FHA) issues, and administrative examinations, enforcement actions and investigations. He also works with litigation counsel on devising strategies for defense of class action...

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