RSSThe Consumer Financial Protection Bureau fined Boca Raton, Fla.-based mortgage loan servicer and originator Freedom Mortgage $1.75 million for providing illegal incentives to real estate agents and brokers in exchange for mortgage loan referrals.
According to the CFPB, Freedom Mortgage violated the Real Estate Settlement Procedures Act by offering real estate agents and brokers cash payments, paid subscription services and catered parties with the understanding that they would refer potential homebuyers to the firm.
Freedom reportedly agreed to pay approximately $90,000 in total monthly payments to more than 40 real estate brokerages in exchange for their marketing work. Instead, the firm reportedly used the money to pay for mortgage referrals. Private real estate brokerage firm Realty Connect allegedly failed to perform the marketing tasks it agreed to under a $6,000 monthly contract with Freedom Mortgage. CFPB fined Realty Connect $200,000 for accepting illegal kickbacks from the company.
Freedom reportedly provided real estate brokers and agents with free subscription access to property reports, comparable sales and foreclosure information in exchange for being paired with a company loan officer. Since 2017, real estate agents who received free access made more than 1,000 mortgage referrals to Freedom.
“Freedom provided kickbacks to real estate brokers and agents — including those at Realty Connect — in return for mortgage referrals, a clear violation of federal law,” said CFPB Director Rohit Chopra. “The CFPB will be vigilant in rooting out anti-competitive behavior that interferes with consumers’ ability to choose financial products and services.”
