The following news was released at the end of 2016. IMO when clients are given a choice, they will select value and get a better mortgage fit when allowed to apply with licensed mortgage originators that take the time to understand their client's needs and fit the mortgage product to those needs. Keller Williams and Remax employ a lot of great Realtors and IMO the actions of a few should not define two super organizations. Hopefully this action better defines what is acceptable in our industry. IMO we should stay in our lanes and allow Realtors to do their job advising clients on homes that fit their need and Mortgage Originators should be selected based on Service and Competence. If these lanes are respected its a win win. Realtors will get more referrals due to a great Mortgage Experience and Clients win by getting their dream home and a mortgage that meets their needs today and into the future.
Please read the latest CFPB action below.
Consumer Financial Protection Bureau hit Prospect Mortgage with a $3.5 million
fine for allegedly paying kickbacks to two real estate brokers and a servicer
for referrals of government backed mortgage loans. The bureau also took action
against Keller Williams Realty Mid-Willamette and Remax Gold Coast, which were
among more than 100 real estate brokers that had "improper
arrangements" with the Sherman Oaks, Calif., firm, the CFPB said.
action sends a clear message that it is illegal to make or accept payments for mortgage
referrals," CFPB Director Richard Cordray said in a press release.
"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."
CFPB said that Prospect created marketing services agreements from 2011 to 2016
and made payments to various companiesthat were disguised as advertising and
promotional services. Prospect paid real estate brokers from $200 to $20,000 a
month inreturn for borrower referrals, the bureau said. Prospect tracked the number of referrals made
by each broker and also paid various real estate brokers to locate loan
officers at Prospect using desk licensing agreements, the CFPB said.
Additionally, Prospect allegedly paid brokers to "prequalify" home
loan borrowers with Prospect and to "write in" the lender’s name for
anyone seeking to purchase a listed property, the CFPB said. The company allegedly
split fees with Planet Home Lending, a Connecticut mortgage servicer that it
hired to identify and help persuade eligible consumers to refinance into a
government-backed loan through Prospect.
the consent order, Prospect will pay $3.5 million to the CFPB’s civil penalty
fund. Keller Williams Realty Mid-Willamette willpay $145,000 in disgorgement
and $35,000 in penalties and Remax Gold Coast will pay $50,000 in civil money
penalties, the CFPB stated. Planet Home Lending, a Meriden, Conn., mortgage
servicer, will pay $265,000 in redress to harmed consumers for accepting
illegal kickbacks for referrals in violation of the Real Estate Settlement
Procedures Act, which prohibits making payments or giving kickbacks to anyone
in return for a referral to a real estate settlement service provider.
would not confirm or deny the CFPB's charges."Today's settlement with the
CFPB regarding alleged origination practices initiated under the prior
management team, closes an important chapter in the company's history,"
Prospect said in an emailed statement. "Under Prospect Mortgage's new
leadership team, the company has rebuilt its legal, regulatory and compliance
manager at Keller Williams Realty Mid-Willamette in Corvalis, Ore., did not
return a call seeking comment. The CFPB did not identify the specific office of
Remax Gold Coast. Planet Home did not return a call seeking comment. Planet
Home had ordered so-called trigger leads from a major consumer reporting agency
to identify customers seeking to refinance, which is a prohibited use of credit
reports under the Fair Credit Reporting Act.
Prospect had run afoul of California regulators in 2015. The lender
agreed to pay $10.1 million for inflating settlement service fees charged for
more than 70,000 borrowers during a four-year period, according to California's
Department of Business Oversight.
Prospect, which is backed by the Chicago-based private equity firm Sterling
Partners, sold its sales and operating assets, including 150 retail offices, to
Homebridge Financial Services, an Iselin, N.J., lender. Many of the Prospect's
executives, including Michael Williams, a former Fannie Mae president and CEO,