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CFPB, Maryland AG Strike Against ‘Pay-to-Play’ Mortgage Kickback Scheme

depleting-moneyThe Consumer Financial Protection Bureau (CFPB), along with Maryland Attorney General Brian E. Frosh, filed a federal complaint Thursday against participants in a "pay-to-play" mortgage kickback scheme.

The complaint alleges that Genuine Title, a Maryland-based title company, along with some of its executives and a number of loan officers, provided mortgage referrals in exchange for cash and marketing services. This violates the Real estate Settlement Procedures Act (RESPA), which strictly prohibits fees and kickbacks in exchange for real estate closing services.

Specifically, the complaint said that Genuine Title offered purchasing, analysis and consumer data to loan officers and created mailers on the officers’ behalf. In exchange for this, the officers then referred buyers to Genuine’s closing services. Loan officers also allegedly received cash payments through their individual companies. These payments totaled between $130,000 and $500,000 for each loan officer involved.

A total of six defendants were named in the suit, and if consent orders or entered by the court, they could owe up to $662,500 in penalties and redress. Five of the six would also be banned from the mortgage industry for two to five years. Defendants would also be required to report their actions to the Nationwide Mortgage Licensing System & Registry.

On top of these penalties, the case could also result in refunds for some consumers. In cases where buyers paid fees for services in which RESPA violations occurred, the CFPB could afford partial or even complete refunds of those charges.

Genuine Title offered closing services from 2005 until 2014, when it went out of business. Those named in the suit include Jay Zukerberg, owner and founder of Genuine Title, and Brandon Glickstein, the company’s marketing director, as well as loan officers Gary Klopp, Adam Mandelberg, William Peterson, Angela Pobletts and several LLC’s controlled by these parties.

“Paying kickbacks for mortgage referrals is illegal, and it has been illegal for decades,” CFPB Director Richard Cordray said. “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.”

See the full complaint at ConsumerFinance.gov.

About Author: Aly J. Yale

Aly J. Yale is a freelance writer and editor based in Fort Worth, Texas. She has worked for various newspapers, magazines, and publications across the nation, including The Dallas Morning News and Addison Magazine. She has also worked with both the Five Star Institute and REO Red Book, as well as various other mortgage industry clients on content strategy, blogging, marketing, and more.

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