Lender, Homebuilders Accused of Using Captives to Funnel Illegal Payments for Referrals Settle with HUD
July 20, 2006
In a strong signal to users of captive title reinsurance, the Department of Housing and Urban Development has cracked down on questionable captive reinsurance arrangements, resulting in historic first settlements with a mortgage lender and its captive title subsidiary, and two major homebuilders. The settlements involve CitiMortgage, Inc. and its captive title reinsurance company Chesapeake Reinsurance; M.D.C. Holdings and several of its Richmond American Homes builder subsidiaries and AHT Reinsurance; and WL Homes, doing…