Consumer agency probes mortgage insurance
WASHINGTON (AP) — The government's consumer finance watchdog is investigating mortgage insurance deals between banks and big insurers like American International Group, MGIC Investment Corp. and Genworth Financial.
Genworth said in a public filing Friday that it had received a subpoena from the Consumer Financial Protection Bureau for information about captive mortgage reinsurance deals. AIG and MGIC made similar disclosures earlier this week.
Mortgage borrowers sometimes must buy private mortgage insurance to cover the lender's losses in case of a default.
Some borrowers have accused mortgage insurers of paying banks millions for a slice of this business. They have said in civil lawsuits that deals amounted to hefty kickbacks for banks.
The CFPB's subpoenas, called Civil Investigative Demands, mean that its enforcement division has launched a preliminary probe of the matter.
