In its latest action against mortgage lenders for illegal kickbacks, the Consumer Financial Protection Bureau and Maryland Attorney General today announced they are taking action against Wells Fargo and JPMorgan Chase for an illegal scheme that took place several years ago.
Under the alleged scheme, loan officers at the two banks accepted cash, marketing materials and consumer information from Genuine Title, a now-defunct Maryland title company, in exchange for business referrals.
Proposed consent orders are seeking $24 million in civil penalties from Wells Fargo, $600,000 in civil penalties from JPMorgan Chase, and $11.1 million in redress to consumers whose loans were involved.
The agency is also taking action against former Wells Fargo Employee Todd Cohen and his wife, Elaine Oliphant Cohen, for their involvement. The two will pay a $30,000 penalty.
The action is the latest in a series of actions taken against mortgage companies for violating the Real Estate Settlement and Procedures Act, and for illegal kickbacks specifically. In 2014, the CFPB took action against Fidelity Mortgage Corporation and a Michigan title company, among others. Many have speculated about ongoing scrutiny of mortgage lenders on RESPA practices regarding marketing agreements as well as loan originator compensation and other rules that apply to mortgage companies.
“Today we took action against two of the nation’s largest banks, Wells Fargo and JPMorgan Chase, for illegal mortgage kickbacks,” said CFPB Director Richard Cordray. “These banks allowed their loan officers to focus on their own illegal financial gain rather than on treating consumers fairly. Our action today to address these practices should serve as a warning for all those in the mortgage market.”
Written by Elizabeth Ecker