WASHINGTON (Legal Newsline) —The Consumer Financial Protection Bureau (CFPB) announced Jan. 31 that Prospect Mortgage LLC will pay a $3.5 million civil penalty for allegedly paying illegal kickbacks for mortgage business referrals.
Two real estate brokers and a mortgage servicer that purportedly took illegal kickbacks from Prospect will pay a combined $495,000 in consumer relief, repayment of ill-gotten gains and penalties.
Specific allegations levied against Prospect Mortgage include charges the company paid for referrals through agreements, paid brokers to institute requirements mandating consumers pre-qualify with Prospect, and split fees with a mortgage servicer in order to obtain referrals from consumers. These business practices violate the Real Estate Settlement Procedures Act, the CFPB says.
“Today’s action sends a clear message that it is illegal to make or accept payments for mortgage referrals,” CFPB Director Richard Cordray said. “We will hold both sides of these improper arrangements accountable for breaking the law, which skews the real estate market to the disadvantage of consumers and honest businesses.”
Prospect Mortgage is one of the largest independent retail mortgage lenders in the United States and is based in Sherman Oaks, California. It operates nearly 100 branches across the country.