The Consumer Financial Protection Bureau (CFPB) took action last week against a major mortgage lender, Prospect Mortgage, LLC, for paying illegal kickbacks for mortgage referrals. In addition, two real estate brokers and a mortgage servicer were held responsible for taking the illegal kickbacks.
Under the terms of the action announced by the CFPB, “Prospect will pay a $3.5 million civil penalty for its illegal conduct, and the real estate brokers and servicer will pay a combined $495,000 in consumer relief, repayment of ill-gotten gains, and penalties.”
According to reports on this and to my knowledge, this is the first legal action against a real estate broker by the CFPB. In a press release issued by the CFPB on Tuesday, January 31st CFPB Director Richard Cordray states, “Today’s action sends a clear message that it is illegal to make or accept payments for mortgage referrals. We will hold both sides of these improper arrangements accountable for breaking the law, which skews the real estate market to the disadvantage of consumers and honest businesses.”
REALTOR Magazine reports, “The action involves marketing service agreements, an area of RESPA enforcement that the National Association of REALTORS® says generates confusion among real estate companies and others in the industry. The association says its analysts on staff will closely examine the facts of these cases and build on existing guidance for real estate professionals for how to best comply with RESPA.”
For more information on RESPA, visit the National Association of REALTORS’ RESPA resource page.
As more information unfolds, I will keep you updated. To receive Tandy on Real Estate news updates direct to your inbox, please subscribe.