RSSA New Jersey title services company is the latest to feel the effects of a crackdown on mortgage kickbacks by the Consumer Financial Protection Bureau. Parsippany-based Stonebridge Title Services Inc., was fined $30,000 for violations of the Real Estate Settlement Procedures Act.
The consent order filed against Stonebridge follows a string of fines and enforcement actions leveled against companies violating the anti-kickback provisions of RESPA’s section 8.
Stonebridge paid commissions to more than twenty independent salespeople who referred title insurance business to Stonebridge, the bureau said. The company solicited people to provide it with referrals, offering to pay commissions of up to 40% of the title insurance premiums Stonebridge itself received, according to the consent order.
Paying commissions for referrals is allowed under RESPA if the recipient of the payment is an employee of the company paying the referral. The people Stonebridge was paying, however, were independent contractors and not actual employees, the bureau said.
“Kickbacks drive up the costs of getting a mortgage and put law-abiding companies at a disadvantage,” said CFPB Director Richard Cordray in a press release. “The Consumer Bureau will continue to take action against companies that seek to attract consumers through illegal schemes.”
Similar to the CFPB’s most recent anti-kickback action against an Alabama company, the Stonebridge case was referred to the bureau by the Department of Housing and Urban Development.
Earlier this year, the CFPB fined a Missouri lender for mortgage kickback violations while one Connecticut company self-reported a RESPA section 8 violation. Last year saw actions filed against five different nationwide mortgage insurers.
