Attorney General Michelle Henry has filed a civil complaint against several mortgage brokers based in Lehigh Valley and their manager, Barry Newhart. The lawsuit alleges that they were involved in a kickback scheme with real estate agents who directed potential home buyers to these brokers.
According to the complaint, Newhart and the brokers provided incentives such as discounted ownership in a joint venture mortgage brokerage company, tickets to sporting events, dinners, and other kickbacks. These incentives were given to real estate agents in exchange for steering clients towards the mortgage brokerage without the buyers' knowledge.
The Office of Attorney General claims that these actions violate Pennsylvania's Unfair Trade Practices and Consumer Protection Law, the federal Consumer Financial Protection Act, and the Real Estate Settlement Procedures Act. The office is seeking various forms of relief including injunctive relief, civil penalties, restitution, costs and attorneys fees.
"Buying a home can be a stressful and challenging time," said Attorney General Henry. "Consumers...deserve to know if businesses assisting them have conflicts of interest."
The lawsuit further alleges that Newhart attempted to disguise the kickbacks as stock sales and cash payments to referring real estate professionals to evade federal regulations.
The defendants named in the lawsuit include Bright Financial Group, LLC; Conquest Mortgage, LLC; Flagship Home Loans, LLC; Legacy Mortgage Partners, LLC; Nittany Home Loans, LLC; and MCT Financial, LLC.
Attorney General Henry encourages consumers who suspect they may have been affected by these practices to file a complaint online or contact the Consumer Protection Hotline at 1-800-441-2555 or via email at scams@attorneygeneral.gov.
Deputy Attorney General Pat Gavin filed this complaint in the United States District Court for the Eastern District of Pennsylvania.