On August 3, 2015, the D.C. Circuit Court of Appeals entered an order staying Consumer Financial Protection Bureau (CFPB) Director Richard Cordray's June 4, 2015, order imposing injunctive relief and disgorgement of over $109 million for alleged Real Estate Settlement Procedures Act (RESPA) violations stemming from a mortgage reinsurance program PHH and certain of its affiliates operated. As we covered earlier, Director Cordray held that PHH had referred consumers to mortgage insurance companies and received reinsurance premiums in return, which he concluded constituted a kickback in violation of Section 8 of RESPA. Cordray's appellate decision also increased the amount of disgorgement from the ALJ's prior ruling of $6.4 million to $109 million by imposing fines not just on amounts paid by borrowers for mortgage insurance after the CFPB took over civil enforcement of RESPA, but for any payments received after that takeover date, regardless of when the borrower's loan closed. The case will now proceed to the D.C. Circuit for a decision on the merits, which is likely to come next year.
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