Regulator targets kickbacks in mortgage industry
In a message to the mortgage industry, U.S. regulators are making clear that kickbacks in exchange for sales leads won't be tolerated.In a complaint filed in federal court by the Consumer Financial Protection Bureau and the Maryland Attorney General, the agency and state allege that a Maryland-based title company's executives and loan officers traded cash and marketing services in exchange for mortgage referrals. Under proposed consent orders filed Wednesday, if entered by the court, five of six individual defendants would be banned from the mortgage industry and required to pay $662,500 in redress and penalties, the CFPB said in a statement. The action will proceed against the remaining defendant. The announcement follows enforcement actions in January against Wells Fargo (WFC) and JPMorgan Chase (JPM) for their role in the scheme, with the banks fined $35.7 million."Paying kickbacks for mortgage referrals is illegal, and it has been illegal for decades," CFPB Director Richard Cordray said in a statement. "Secret and unlawful payments keep consumers in the dark and put honest businesses at a disadvantage, and the Consumer Bureau will continue to take action against them."Genuine Title, which went bankrupt last year, was at the center of the scheme, the CFPB said. Genuine Title allegedly did marketing for bank loan officers, such as sending letters on their behalf to potential customers. Cash was also paid to the loan officers for referrals, the CFPB said. 2015 CBS Interactive Inc.. All Rights Reserved.