Tuesday, September 19

Prospect Mortgage to Pay $3.5 Million Fine for Illegal Kickback Scheme

Real Estate Brokers and Mortgage Servicer That Took Kickbacks from Prospect Also Ordered to Pay $495,000

The job of the most honest seller is to sell you, not to give you reasons to buy from a competitor. That over-riding reality drives the free-enterprise system, and places a responsibility on you.

FoolProof's Hall of Shame is here to remind you why a healthy dose of skepticism should rule your decisions before dealing with anyone who wants to touch your money or your general welfare.

January 31, 2017

Mortgages

Source: www.consumerfinance.gov

The Consumer Financial Protection Bureau (CFPB) today took action against Prospect Mortgage, LLC, a major mortgage lender, for paying illegal kickbacks for mortgage business referrals.

"Today's action sends a clear message that it is illegal to make or accept payments for mortgage referrals," said CFPB Director Richard Cordray

Specifically, the CFPB found that Prospect Mortgage:

  • Paid for referrals through agreements:
  • Paid brokers to require consumers—even those who had already prequalified with another lender—to prequalify with Prospect:
  • Split fees with a mortgage servicer to obtain consumer referrals

Under the consent order issued today, Prospect will pay $3.5 million to the CFPB's Civil Penalty Fund for its illegal kickback schemes. The company is prohibited from future violations of the Real Estate Settlement Procedures Act, will not pay for referrals, and will not enter into any agreements with settlement service providers to endorse the use of their services.