WASHINGTON (Legal Newsline) – The Consumer Financial Protection Bureau (CFPB) announced that it took action against former Wells Fargo employee David Eghbali for an alleged illegal mortgage fee-shifting scheme.
According to the CFPB, Eghbali conducted a scheme in which he referred loan closings to a single escrow company – which shifted its fees from some customers to others at Eghbali’s request – then manipulated loan costs. This led to an increase in the number loans closed and hence an increase in his commissions.
The CFPB took action under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which allows the organization to pursue institutions or individuals engaging in allegedly unfair practices. Eghbali will pay an $85,000 penalty and is barred for one year from working in the mortgage industry.
“We have taken action against an individual loan officer for illegal mortgage fee-shifting,” CFPB Director Richard Cordray said. “This should send a strong message that the law must be followed not only by large financial institutions, but also by the individuals who work for them.”
Eghbali was a loan officer for a Wells Fargo branch in Beverly Hills, California.