A little more than a year after Prospect Mortgage LLC settled allegations of illegal fees received by an appraisal affiliate, it has reached another illegal fee settlement.
In November 2015, the
Multi-State Mortgage Committee announced that the Sherman Oaks, California-based company agreed a settlement with 50 state regulators.
At issue were
improperly disclosed and unsupported settlement service fees paid to affiliate C2C Appraisal Services LLC for services performed by Prospect employees.
On Tuesday, the Consumer Financial Protection Bureau
announced that Prospect has agreed to a consent order.
The bureau claims the company paid
illegal kickbacks for mortgage business referrals to real estate brokers ReMax Gold Coast and Keller Williams Mid-Willamette and mortgage servicer Planet Home Lending LLC.
The payments were tied to marketing service agreements,
which Prospect abandoned in September 2015.
“From at least 2011 through 2016, Prospect Mortgage used a variety of schemes to pay kickbacks for referrals of mortgage business in violation of the Real Estate Settlement Procedures Act,” the CFPB stated. “For example, Prospect established marketing services agreements with companies, which were framed as payments for advertising or promotional services, but in this case actually served to disguise payments for referrals.”
The regulator claims that Prospect utilized the MSAs as a vehicle to pay for mortgage referrals. Prospect also allegedly paid real estate brokers to require home buyers to pre-qualify with it — even some
who had already pre-qualified with another lender.
In addition Prospect allegedly paid Planet Home Lending to refer refinance prospects.
Furthermore, the servicer is accused of unlawfully using trigger leads to identify which of its customers were seeking to refinance and market Prospect to them — a violation of the Fair Credit Reporting Act and RESPA.
Prospect is required by the consent order to pay a $3.5 million civil penalty.
The real estate brokers and servicer are required to pay $495,000.
