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CFPB v. Freedom Mortgage Corporation & Realty Connect USA
Filed
August 2023
Jurisdiction
CFPB Administrative Action
Plaintiff Firm
Consumer Financial Protection Bureau (CFPB)
Next Milestone
Compliance monitoring ongoing
Freedom Mortgage and Realty Connect violated RESPA Section 8 by exchanging illegal kickbacks: Freedom paid Realty Connect for referrals, and Realty Connect steered homebuyers to Freedom in exchange for payments disguised as 'marketing services'
$1.95 million civil penalty; companies ordered to cease illegal kickback arrangements and implement compliance monitoring; protects consumers from inflated costs due to referral fees
CFPB Investigation
2020-2022Consumer Financial Protection Bureau investigates Freedom Mortgage Corporation and Realty Connect USA for potential RESPA Section 8 violations involving illegal referral fee kickbacks
CFPB Enforcement Action Filed
August 10, 2023CFPB files administrative action alleging Freedom Mortgage and Realty Connect violated RESPA by exchanging illegal kickbacks: Freedom paid Realty Connect for referrals, and Realty Connect steered homebuyers to Freedom in exchange for payments disguised as 'marketing services'
$1.95M Consent Order
August 10, 2023Freedom Mortgage and Realty Connect agree to $1.95 million civil penalty without admitting wrongdoing; companies ordered to cease illegal kickback arrangements and implement compliance monitoring programs
Compliance Monitoring
2023-PresentCFPB monitors companies' compliance with consent order terms and implementation of new referral fee policies
Category
Mortgage LendingSettlement
1500000
Draper & Kramer engaged in redlining by discouraging mortgage applications in majority-Black and Hispanic neighborhoods in Chicago and Boston metro areas (2019-2021), violating Equal Credit Opportunity Act and Consumer Financial Protection Act
Category
Mortgage LendingSettlement
6900000
Wells Fargo allegedly violated Truth in Lending Act by failing to properly disclose buydown agreements where sellers paid upfront fees to reduce buyers' interest rates, causing borrowers to pay higher rates than disclosed
Category
Mortgage LendingSettlement
2000000
Cypress Loan Servicing (formerly Rushmore, acquired by Select Portfolio Servicing, with ties to PHH Mortgage/Onity Group) violated Massachusetts consumer protection and debt collection laws by charging illegal foreclosure-related fees and failing to properly apply borrower payments
Real experiences from homeowners affected by mortgage lending violations.
I applied for a mortgage in 2020 for a home in a predominantly minority neighborhood. Despite having excellent credit and a stable income, I was repeatedly denied or offered rates significantly higher than friends with similar financial profiles in other areas. After seeing the CFPB enforcement actions, I realized I may have been a victim of redlining.
Loan Date: March 2020
When refinancing my home, my loan officer strongly pushed me toward a specific title company and appraiser. I later discovered through court documents that there was an illegal kickback arrangement between my lender and these service providers, which inflated my closing costs by thousands of dollars.
Loan Date: August 2021
I used an online mortgage rate comparison platform in 2022. I thought I was getting competitive rates, but after the Optimal Blue lawsuit came to light, I realized the platform may have been artificially inflating rates through coordination with lenders. My 'best rate' was likely not competitive at all.
Loan Date: November 2022
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