Brokerage

CFPB orders real estate brokers, lenders to pay $4M in fines

Brokers allegedly required buyers to prequalify with Prospect Mortgage, paid agent bonuses for mortgage referrals
  • The Consumer Financial Protection Bureau has ordered two brokerages and two lenders to pay nearly $4 million total for alleged violations of the Real Estate Settlement Procedures Act (RESPA).
  • RESPA prohibits both paying for and receiving payment for mortgage business referrals.
  • Re/Max Gold Coast allegedly required buyers to prequalify with Prospect in order for their offers to be considered by home sellers -- even if they had already prequalified with another lender.
  • KW Mid-Willamette allegedly gave its agents bonuses for referring consumers to Prospect.
  • The CFPB indicated that more than 100 real estate brokers had agreements with Prospect to obtain illegal payments for referrals. Whether the agency plans to fine any other brokers is unknown.

Learn the New Luxury Playbook at Luxury Connect | October 18-19 at the Beverly Hills Hotel

The Consumer Financial Protection Bureau (CFPB) has fined two real estate brokerages and two mortgage lenders and for what the federal agency says was an "illegal kickback scheme" in which one of the lenders allegedly paid for mortgage business referrals, in violation of federal law. In four separate consent orders (links below), the CFPB leveled fines totaling nearly $4 million: Corvallis, Oregon-based Keller Williams Mid-Willamette, which has about 130 agents, must pay $145,000 in ill-gotten gains to the U.S. Treasury and a $35,000 civil money penalty to the bureau. Ventura, California-based Re/Max Gold Coast, which has about 190 agents, must pay a civil money penalty of $50,000 to the bureau. Sherman Oaks, California-based Prospect Mortgage must pay a civil money penalty of $3.5 million to the bureau. Meridien, Connecticut-based mortgage servicer and lender Planet Home Lending LLC must pay $265,000 in redress to affected consumers. A "consent order" means that t...