A Texas homebuilder has agreed to pay more than $100,000 to resolve allegations that he received kickbacks from two mortgage lenders through joint ventures that federal regulators characterized as sham businesses.

Paul Taylor will pay $118,194 — the full amount he received since early 2010 for referring business to Benchmark Bank and Willow Bend Mortgage Co. — and will be barred from providing real estate settlement services, including mortgage originations, the Consumer Financial Protection Bureau announced today.

Taylor’s company, Paul Taylor Homes, referred buyers to two joint ventures he formed with lenders, Stratford Mortgage Services and PTH Mortgage Co. But Benchmark Bank and Willow Bend actually performed the mortgage origination work — the joint ventures were formed only to pass kickbacks to Taylor through profit distributions and as a payment through a “service agreement,” the CFPB said.

The Real Estate Settlement Procedures Act (RESPA) prohibits giving and receiving kickbacks for mortgage-related services. The Federal Deposit Insurance Corp. (FDIC) separately fined Benchmark Bank for its alleged role in the RESPA violations. Source: consumerfinance.gov.

 

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