RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
  • Agents
  • Brokers
  • Teams
  • Marketing
  • Coaching
  • Technology
  • More
    • Headliners New
    • Luxury
    • Best Practices
    • Consumer
    • National
    • Our Editors
Join Premier
Sign In
RISMedia
  • News
  • Premier
  • Reports
  • Events
  • Power Broker
  • Newsmakers
  • More
    • Publications
    • Education
No Result
View All Result
RISMedia
No Result
View All Result

Prospect Mortgage, Brokerages Ordered to Pay Millions for Illegal Kickback Scheme

Home Latest News
By RISMedia
January 31, 2017
Reading Time: 2 mins read
New Regulations Protect Students and Taxpayers from Predatory Institutions

regulations_concept

Prospect Mortgage, LLC, a major mortgage lender, and two real estate brokerages have been ordered by the Consumer Financial Protection Bureau (CFPB) to pay more than $3.5 million in civil penalties and consumer compensation for participating in an “illegal kickback scheme” for mortgage business referrals.

Prospect, headquartered in Sherman Oaks, Calif., Corvallis, Ore.-based Keller Williams Mid-Willamette and Ventura, Calif.-based RE/MAX Gold Coast violated the Real Estate Settlement Procedures Act (RESPA), according to the CFPB, which prohibits real estate agents and brokerages from recommending settlement services, such as title insurance, appraisals, inspections, and loan origination, to consumers in exchange for payment from service providers.

“Today’s action sends a clear message that it is illegal to make or accept payments for mortgage referrals,” said CFPB Director Richard Cordray in a statement. “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.”

One of the largest independent retail mortgage lenders in the U.S., Prospect Mortgage has had “improper arrangements” with more than 100 real estate brokerages from at least 2011 to 2016, including Keller Williams Mid-Willamette and RE/MAX Gold Coast, according to the CFPB, under the guise of desk-license agreements, lead agreements or marketing services agreements (MSAs). Prospect based payments to brokerages on number of referrals, and, in some cases, had brokerages require their clients to obtain a mortgage preapproval from Prospect, even if the client had a preapproval from another lender—a practice known as “writing in.” Keller Williams Mid-Willamette and RE/MAX Gold Coast accepted payments for referrals through these arrangements, according to the CFPB.

Prospect also established a similarly unlawful agreement with Meriden, Conn.-based Planet Home Lending in 2012, violating RESPA and the Fair Credit Reporting Act, for which the CFPB is also ordering payment, the Bureau stated. Prospect and Planet, which is not a lender, split the proceeds from the originations of refinance loans Planet persuaded consumers to obtain through Prospect, according to the CFPB, and Planet ordered “trigger leads” through credit reporting agencies that identified potential refinance customers for Prospect.

Prospect Mortgage is required to pay $3.5 million in civil penalties. Keller Williams Mid-Willamette is required to pay $145,000 in disgorgement and $35,000 in civil penalties. RE/MAX Gold Coast is required to pay $50,000 in civil penalties. Planet Home Lending is required to pay $265,000 in redress.

For more information, please visit www.consumerfinance.gov.

For the latest real estate news and trends, bookmark RISMedia.com.

Tags: CFPBKeller Williams Mid-WillametteMSAsPlanet Home LendingProspect MortgageRE/MAX Gold Coast
ShareTweetShare
Susanne Dwyer

Susanne Dwyer

Related Posts

Luxury Home Prices Fall as Starter Homes See Increases
Agents

Luxury Home Prices Fall as Starter Homes See Increases

January 30, 2023
CRMLS Partners With Styldod for Advanced Image Analysis
Agents

CRMLS Partners With Styldod for Advanced Image Analysis

January 30, 2023
United Real Estate Attributes Growth to Its Bullseye Agent-Productivity Platform
Agents

United Real Estate Attributes Growth to Its Bullseye Agent-Productivity Platform

January 30, 2023
ERA Real Estate Expands Presence in Central San Joaquin Valley
Agents

ERA Real Estate Expands Presence in Central San Joaquin Valley

January 30, 2023
JPAR®–Real Estate Named a 2023 Top Franchise by Franchise Business Review
Agents

JPAR®–Real Estate Named a 2023 Top Franchise by Franchise Business Review

January 30, 2023
How to Debunk 4 FSBO Myths
Agents

How to Debunk 4 FSBO Myths

January 29, 2023

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Tip of the Day

The Great Housing Market Correction of 2023

For much of the past two-and-a-half years, it has been a housing market free-for-all, with bidding wars, multiple offers over... Read more.

Business Tip of the Day provided by

Recent Posts

  • Luxury Home Prices Fall as Starter Homes See Increases
  • CRMLS Partners With Styldod for Advanced Image Analysis
  • United Real Estate Attributes Growth to Its Bullseye Agent-Productivity Platform

Categories

  • Spotlights
  • Best Practices
  • Advice
  • Marketing
  • Technology
  • Social Media

The Most Important Real Estate News & Events

Click below to receive the latest real estate news and events directly to your inbox.

Sign Up
By signing up, you agree to our TOS and Privacy Policy.

About Blog Our Products Our Team Contact Advertise/Sponsor Media Kit Email Whitelist Terms & Policies ACE Marketing Technologies LLC

© 2023 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

No Result
View All Result
  • Home
  • Premier
  • Reports
  • News
    • Agents
    • Brokers
    • Teams
    • Consumer
    • Marketing
    • Coaching
    • Technology
    • Headliners New
    • Luxury
    • Best Practices
    • National
    • Our Editors
  • Publications
    • Real Estate Magazine
    • Past Issues
    • Custom Covers
  • Events
    • Upcoming Events
    • Podcasts
    • Event Coverage
  • Education
    • Get Licensed
    • REALTOR® Courses
    • Continuing Education
    • Luxury Designation
    • Real Estate Tools
  • Newsmakers
    • 2022 Newsmakers
    • 2021 Newsmakers
    • 2020 Newsmakers
    • 2019 Newsmakers
  • Power Broker
    • 2022 Power Broker
    • 2021 Power Broker
    • 2020 Power Broker
    • 2019 Power Broker
  • Join Premier
  • Sign In

© 2023 RISMedia. All Rights Reserved. Design by Real Estate Webmasters.

X