InfoBytes Blog
CFPB Fines Mortgage Lender $3.5 Million for Paying Illegal Kickbacks
On January 31, the CFPB issued consent orders against four entities—a mortgage lender, two real estate brokers, and a mortgage servicer—alleged to have participated in an illegal mortgage business referral scheme. According to the first order (2017-CFPB-0006), the mortgage lender violated RESPA when it, among other things, (i) paid for referrals pursuant to various agreements with real estate brokers and other counterparties; (ii) encouraged brokers to require consumers to “prequalify” with the lender; and (iii) split fees with a mortgage servicer to obtain consumer referrals. Based on these and other allegations, the CFPB ordered the lender to pay a $3.5 million civil money penalty. In addition, the Bureau issued consent orders against the two real estate brokers and the mortgage servicer that allegedly participated in the kickback scheme (see 2017-CFPB-0008, 2017-CFPB-0009, and 2017-CFPB-0007). Notably, the Bureau alleges that the servicer also violated FCRA by ordering “trigger leads” from credit bureaus so that it could market the lender to consumers. The real estate brokers and servicer were ordered to pay a combined $495,000 in consumer relief, repayment of ill-gotten gains, and penalties. Read the special alert issued February 1 on InfoBytes.