THE government's consumer finance watchdog is investigating deals that transferred billions in premiums charged to mortgage borrowers from mortgage-insurance companies to the banks that made the loans.

The deals amounted to kickbacks, because the banks pressured insurers into them in exchange for a share of the banks' mortgage insurance business, according to civil lawsuits filed by borrowers and legal experts.

The Consumer Financial Protection Bureau (CFPB) has served subpoenas to American International Group Inc, MGIC Investment Corp. Genworth Financial Inc and Radian Group Inc, the companies said in public filings this week. The CFPB asked for documents and answers to written questions about captive mortgage reinsurance deals, they said.

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