MortgageReverse

CFPB Fines Title Firm For Illegal Mortgage Kickbacks

The Consumer Financial Protection Bureau has ordered a Michigan title insurance agency to pay $200,000 for illegal mortgage kickbacks that violated the Real Estate Settlement Procedures Act (RESPA).

Lighthouse Title was found by the CFPB to have violated RESPA by entering into marketing services agreements with various companies such as real estate brokers, with the understanding those companies would refer mortgage closings to Lighthouse.

According to the CFPB findings, Lighthouse set the fees it would pay the referral companies to be based upon the number of clients they referred.

It’s not the first action the CFPB has taken against businesses it has investigated for mortgage kickbacks this year. In June, the agency took action against a New Jersey title company for an illegal kickback agreement, and in January, it charged a Missouri-based mortgage lender for a similar scheme.

“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 in announcing the action. “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.”

Written by Elizabeth Ecker

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