(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.
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.
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.
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
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.