Nearly a year since the CFPB filed a notice of charges against New Jersey mortgage lender PHH Corp., and its subsidiaries for alleged illegal captive reinsurance activities, a final decision soon will be made on an administrative law judge’s recommendation that the companies be deemed guilty of violating RESPA and pay almost $6.5 million in disgorgement. At the same time, a class-action lawsuit filed against PHH — which is believed to have created the first captive reinsurance entity in the mortgage industry in the 1990s — has been winding its way through a California federal court since 2008 and finally could be decided. Will 2015 be the year that the 20-year-old debate over captive reinsurance is finally is settled? Read on to find out how we got here, what’s going on right now and where we may be headed with regard to captive reinsurance.
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