The Consumer Financial Protection Bureau took action Thursday against a Missouri-based mortgage lender and its owner for funneling illegal kickbacks to a bank in exchange for real estate referrals.
The agency is ordering the lender, Fidelity Mortgage Corporation and its former owner and current president, Mark Figert, to pay $81,076 for the wrongdoing. The enforcement comes following a series of actions against illegal kickbacks across real estate and lending including a Texas homebuilder, mortgage insurer, and law firm in 2013.
“Kickbacks harm consumers by hampering fair market competition and by unnecessarily increasing the costs of getting a mortgage,” said CFPB Director Richard Cordray. “The Consumer Financial Protection Bureau will continue to take action against schemes that steer consumers to lenders through unscrupulous and illegal business practices.”
According to the charges brought against Fidelity, a partner bank referred potential borrowers to the non-depository lender in exchange for kickbacks disguised as lease payments for renting office space within the bank.
The charges were brought under the Real Estate Settlement Procedures Act, which prohibits giving and receiving kickbacks for referrals of settlement-service business involving federally-insured mortgages.
Figert and the company are required under the CFPB’s terms to repay all of the proceeds from the illegal referrals, roughly $27,000 as well as a civil penalty of $54,000 paid to the bureau.
Under the terms of today’s consent order, Fidelity and Figert are required to pay back all of the company’s proceeds from the unlawfully referred business – a total of $27,076 that will be deposited in the United States Treasury. Additionally, the CFPB is ordering Fidelity and Figert to pay a $54,000 civil penalty to the Bureau.
Written by Elizabeth Ecker