Last month, the CFPB fined a title company $30k for improperly paying out referral fees to mortgage brokers.
“Kickbacks drive up the costs of getting a mortgage and put law-abiding companies at a disadvantage,” said CFPB Director Richard Cordray. “The Consumer Bureau will continue to take action against companies that seek to attract consumers through illegal schemes.”
According to the RESPA rules, commissions on referrals, like those in question, are only allowed when they’re paid to people who work within a given company. For instance, an employee of a title company who refers business to a title rep can be paid a referral fee. However, someone from outside of the business cannot. So watch out. The CFPB is making a point of enforcing the rules with sizable fines.
Read more about this on the CFPB website.
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