Regulation

CFPB orders Fidelity to pay $81,000 fine for alleged mortgage kickbacks

Fidelity MortgageThe CFPB ordered Fidelity Mortgage Corp. and its President Mark Figert on Thursday to pay approximately $81,000 in penalties for allegedly illegally routing customers to a bank in exchange for mortgage referrals.

According to the consent order, in 2010—approximately two years before the formation of Fidelity—Figert and the Fidelity Financial Mortgage Corp., which Figert owned, approached Missouri-based Bank of Sullivan with a joint venture proposal.

FFMC allegedly proposed that the bank outsource its residential mortgage lending by referring customers seeking loans to the mortgage firm in return for an office lease agreement that provided for FFMC’s presence at the bank, if needed, to meet referred borrowers and close loans.

Figert and FFMC initially rejected a lease agreement with a flat monthly rental payment and pushed for an agreement that tied payments to loan volume and the company’s use of the bank office, saying the bank’s bottom line would increase.

The parties eventually negotiated a daily rental rate of $200 and an exclusivity clause that required the bank to promote only FFMC and vice versa.

The CFPB found that Figert and Fidelity violated the Real Estate Settlement Procedures Act, which prohibits giving a “fee, kickback or thing of value” in exchange for business referrals related to a real-estate settlement service.

Fidelity and Figert were ordered to pay $27,076 in disgorgement for origination fees collected on the 20 issued loans between March and November of 2012. The respondents were also ordered to pay a civil penalty of $54,000 to the CFPB.

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