According to a HUD investigation, big banks raked in over $6 billion in a decades-long insurance kickback scheme that violated RESPA.
American Banker reports that banks like Wells Fargo, Citigroup Inc and Countrywide wanted a piece of the hot action insurance companies were getting from insuring all the mortgages these banks were steering their way. In exchange for their business, these banks allegedly mandated elaborate reinsurance systems that broke the law and lined their pockets.
The investigation says that the banks forced consumers to get more insurance than they needed and didn’t disclose the reinsurance partnerships.
The thick binders containing the allegations were presented to the Department of Justice back in 2009 but so far it hasn’t resulted in a settlement or prosecution.
Banks Took $6B in Reinsurance Kickbacks, Investigators Say [American Banker] (Thanks to vicissitude!)