The Consumer Financial Protection Bureau has slapped Lighthouse Title with a $200,000 fine, alleging that the title insurance agency offered kickbacks to real estate agents and brokers in exchange for client referrals.

According to the CFPB, Lighthouse Title, a Michigan-based title insurance agency, would enter into marketing services agreements with various companies, including real estate brokers, with the understanding that the companies would then funnel mortgage closings and title insurance business to Lighthouse.

“The agreements made it appear as if the payments would be based on marketing services the companies were supposed to provide to Lighthouse,” the CFPB said in a release.

“However, Lighthouse actually set the fees it would pay under the marketing services agreements, in part, by considering the number of referrals it received or expected to receive from each company. The CFPB’s investigation found that the companies on average referred significantly more business to Lighthouse when they had marketing services agreements than when they did not.”

The CFPB said that those actions were in violation of the Real Estate Settlement Procedures Act, which prohibits providing something of value to any person with an agreement or understanding that the person will refer real estate settlement services.

“Today’s action sends a clear and simple message, that quid pro quo agreements for real estate referrals are illegal,” said CFPB Director Richard Cordray. “The Consumer Bureau will continue to take action to ensure that the mortgage market is a level playing field where everyone plays by the rules.”

In addition to the fine of $200,000, the CFPB has also ordered Lighthouse to immediately terminate any existing marketing services agreements with companies in a position to refer business to the company.

Lighthouse has also been prohibited with entering into new marketing services agreements with any similar companies. 

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