Skip to main content

FDIC Reaches Settlement With HomeStreet Bank of Seattle Over RESPA Violations

Nov 07, 2019
The Federal Deposit Insurance Corporation (FDIC) has reached a settlement with HomeStreet Bank of Seattle for violations of the Real Estate Settlement Procedures Act

The Federal Deposit Insurance Corporation (FDIC) has reached a settlement with HomeStreet Bank of Seattle for violations of the Real Estate Settlement Procedures Act (RESPA). HomeStreet Bank stipulated to the issuance of an Order to Pay Civil Money Penalty in the amount of $1,350,000.
 
Section 8(a) of RESPA prohibits giving or accepting a thing of value for the referral of settlement service involving a federally related mortgage loan. RESPA was enacted to enable consumers to better understand the home purchase and settlement process, and where possible, to reduce settlement costs.
 
The FDIC determined that HomeStreet Bank, through its now discontinued Home Loan Center-based mortgage banking business line, entered into certain co-marketing arrangements in which the bank and real estate brokers agreed to market their services together using online platforms. The FDIC also determined that the bank entered into desk rental agreements whereby the bank rented space in the offices of real estate brokers and home builders. These arrangements and agreements resulted in the payment of fees by the bank to real estate brokers and home builders for their referrals of mortgage loan business, in violation of RESPA. HomeStreet Bank has terminated all of the co-marketing and desk rental agreements.
 
While co-marketing arrangements and desk rental agreements are permissible where the fees paid bear a reasonable relationship to the fair market value of marketing or rental costs, such arrangements and agreements violate RESPA when the amounts paid exceed fair market value and the excess is for referrals of mortgage business.
 
HomeStreet Bank agreed to the issuance of the Order without admitting or denying the aforementioned violations.

 
About the author
Published
Nov 07, 2019
CSBS Urges MLOs To Update License Registrations

NMLS updates that have taken effect prior to the Nov. 1 opening of the annual license renewal period include new a login process requiring users to update their username and password and establish account recovery details.

CFPB Finalizes New Rule Expanding Consumer Financial Data Privacy Rights

Financial institutions must deliver a consumer's financial data to another provider for free, upon the consumer's request

TD Bank Pleads Guilty To Enabling Money Laundering For Criminal Organizations

'TD Bank chose profits over compliance in order to keep its costs down,' said U.S. Attorney General Merrick Garland.

LoanSnap Officially Loses Connecticut License

The AI mortgage startup formerly faced a cease and desist and a consent order from the State of Connecticut.

Oct 09, 2024
Wishing Regulations Away

What mortgage leaders want to see revised in the wake of Supreme Court undoing of government favoritism

False Moves, Real Consequences

Don’t let missteps mortgage your future