of Consumer Financial Protection Bureau issued an order to (CFPB) Freedom Mortgage Co., Ltd. and Realty Connect USA Long Island The first enforcement action against illegal kickbacks took place on Thursday. Real Estate Settlement Procedures Act 1974 Within 6 years.
According to the CFPB, Freedom offered incentives such as cash payments, paid subscription services and catering parties to realtors and brokers in exchange for referrals to mortgage brokers and brokers.
“Freedom offers kickbacks to real estate brokers and brokers, including Realty Connect, in exchange for mortgage referrals, a clear violation of federal law,” CFPB President Rohit Chopra said in a statement. . “The CFPB will remain vigilant in eradicating anti-competitive behavior that interferes with consumers’ choice of financial products and services.”
Freedom had to pay $1.75 million to the CFPB Victim Relief Fund, while Realty Connect was fined $200,000. Both parties were also ordered to cease their illegal activities immediately.
The CFPB claims that Freedom has contracted marketing services with more than 40 real estate brokers and totals about $90,000 in monthly payments to brokers. .
Freedom used these marketing services contracts as a means of payment for mortgage referrals, rather than using these payments as compensation for marketing services rendered by intermediaries, according to the CFPB. RealtyConnect was one of his 40 brokerages, receiving $6,000 a month from Freedom, but not performing many of the marketing duties required under the contract.
Other alleged violations include that Freedom provides real estate brokers and realtors free access to industry subscription services that include information such as property reports, comparable sales and foreclosure data. is included. These perks were offered in exchange for the requirement that agents and brokers agree to be paired with Freedom Loan Officers. Freedom also provided free access to parties and other exclusive events.
Agencies and brokers with access to the subscription service have referred more than 1,000 home loans to Freedom since 2017, according to the CFPB. Freedom reportedly rejected requests for event sponsorship from real estate brokers who did not refer their mortgage business to Freedom’s lenders.
This would be the first RESPA enforcement action by the CFPB since 2017, when the CFPB reached a consent order with Sherman Oaks, Calif.-based Sherman Oaks. prospective mortgage.allegedly paid by the mortgage lender RE/MAX Gold Coast and KW Midwillamette A monthly fee for the number of referrals you give to a prospect mortgage.
CFPB injured the lender, paid these intermediaries up to $20,000 a month and fines of $3.5 million. a few months later Fined by CFPB Meridian Title Co., Ltd. $1.5 million for a scheme purported to involve mortgage and title rebates.
Freedom Mortgage and Realty Connect did not respond to requests for comment.