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The reinsurance deals unfairly add to people's monthly payments while offering them no direct benefit, said Adam Levitin, an authority on consumer finance and a visiting professor at Harvard Law School. "There really isn't any insurance here, it's just cash going around in a loop," he said. "It's really as if you're paying a higher mortgage rate." The CFPB's subpoenas, called Civil Investigative Demands, mean that its enforcement division has launched a preliminary probe of the matter. The investigation could result civil charges against the companies, or might be resolved without any formal action. A spokeswoman for the CFPB said the agency does not comment on, confirm or deny activities by its enforcement team. The companies already had responded to similar inquiries about mortgage reinsurance from the Department of Housing and Urban Development's inspector general, they said in their filings. The HUD probe was transferred to the CFPB after it took over enforcement of the law that allegedly was violated. AIG said in its filing that the CFPB had allowed it to delay its deadlines for submitting the information because AIG is close to settling a formal enforcement action with the Minnesota Commissioner of Commerce. The company said that "could resolve the investigation." AIG shares closed up 50 cents, at $31.34. MGIC shares fell 4 cents, or 4.6 percent, to close 84 cents on Friday. The company had said Thursday that its second-quarter loss widened as homeowner defaults forced it to pay out more insurance claims. MGIC has posted annual losses since 2007, and expects the losses to continue. Genworth rose 20 cents, or 4.9 percent, to $4.32. Radian rose 17 cents, or 6.3 percent, to $2.86.
[Associated
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