Freedom Mortgage and Realty Connect penalized for kickbacks

The Consumer Financial Protection Bureau (CFPB) took action against Freedom Mortgage Corporation (Freedom) for providing illegal incentives to real estate brokers and agents in exchange for mortgage loan referrals. Freedom provided real estate agents and brokers with numerous incentives — including cash payments, paid subscription services, and catered parties — with the understanding they would refer prospective homebuyers to Freedom for mortgage loans. This conduct violated the Real Estate Settlement Procedures Act and its implementing regulation. The CFPB is ordering Freedom to cease its illegal activities and pay $1.75 million into the CFPB’s victim relief fund. The CFPB separately issued an order against a real estate brokerage firm, Realty Connect USA Long Island (Realty Connect), for accepting numerous illegal kickbacks from Freedom. Realty Connect will pay a $200,000 penalty and cease its unlawful conduct.

The orders announced require Freedom and Realty Connect to:

• Cease illegal activities: Freedom is prohibited from providing anything of value to other entities in exchange for mortgage referrals. Realty Connect is prohibited from accepting items of value in exchange for mortgage referrals.
• Pay nearly $2 million in penalties: Freedom will pay a $1.75 million penalty into the CFPB victims relief fund. Realty Connect will also pay a $200,000 civil money penalty.