Lender that self-reported RESPA issues fined $83,000

A Connecticut mortgage lender that buys troubled mortgages from loan servicers and then uses federal mortgage relief programs to refinance them with reduced principal amounts has agreed to pay $83,000 to address findings that it violated the Real Estate Settlement Procedures Act (RESPA) by splitting revenues and unearned fees with a hedge fund that had previously financed some of its loans.

East Hartford, Conn.-based 1st Alliance Lending LLC reported the issue to the Consumer Financial Protection Bureau in 2013, and cooperated with the resulting investigation. The bureau concluded that 1st Alliance continued to split origination and loss mitigation fees with the hedge fund and its affiliates even after they stopped funding its loans. Source: consumerfinance.gov.


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