Advertisement
CFPB Charges Prospect Mortgage With Kickbacks
The Consumer Financial Protection Bureau (CFPB) has charged Prospect Mortgage LLC with paying illegal kickbacks for mortgage business referrals and ordered it to pay a $3.5 million civil penalty.
According to the CFPB, Prospect maintained various agreements with over 100 real estate brokers that served primarily as vehicles to deliver payments for referrals of mortgage business.
Two brokerages, ReMax Gold Coast and Keller Williams Mid-Willamette, were cited by the agency for accepting illegal payments for referrals. ReMax Gold Coast will pay $50,000 in civil money penalties, and Keller Williams Mid-Willamette will pay $145,000 in disgorgement and $35,000 in penalties.
The CFPB also cited Prospect Mortgage’s relationship with Planet Home Lending, which worked to identify and persuade eligible consumers to refinance with Prospect for their Home Affordable Refinance Program (HARP) mortgages. Prospect compensated Planet for the referrals by splitting the proceeds of the sale of such loans evenly with Planet, which also received the resulting mortgage servicing rights. The CFPB ordered Planet Home Lending to pay $265,000 in penalties.
“Today’s action sends a clear message that it is illegal to make or accept payments for mortgage referrals,” said CFPB Director Richard Cordray. “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.”
About the author