CFPB Orders Fidelity Kickback Penalty
The CFPB ordered Fidelity Mortgage Corporation and its former owner and current president, Mark Figert, on Thursday to pay a total of $81,076 to the Treasury and the bureau for sending funds to a bank in exchange for real estate referrals.
The bureau claimed that the kickbacks funneled by Fidelity, a St. Louis-based non-depository mortgage lender, were disguised as inflated lease payments for renting office space within the bank.
The CFPB noted that the taking or giving of kickbacks for settlement referrals involving federally related mortgages is illegal under the Real Estate Settlement Procedures Act (RESPA).
A total of $27,076 from Fidelity and Figert will be deposited in the United States Treasury. Fidelity and Figert are also required to pay a civil penalty of $54,000 to the bureau.
“When companies pay kickbacks in exchange for referrals, it can hurt competition and inflate real estate settlement costs for consumers, while creating an uneven playing field that puts law-abiding businesses at a disadvantage,” the CFPB said in a press release on Thursday.
The CFPB vowed to continue to enforcing RESPA’s “anti-kickback provisions” to protect consumers and prevent any unlawful activity.
“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.”