The president of Paul Taylor Homes agreed to surrender $118,000 in kickbacks he received from two joint ventures that were established with Benchmark Bank and Willow Bend Mortgage Co.
As part of a consent order, Taylor is prohibited from engaging in future real estate settlement services, including mortgage lending.
“Kickbacks harm consumers by hampering fair market competition and by unnecessarily increasing the costs of getting a mortgage,” said CFPB director Richard Cordray. “The CFPB will continue to take action against schemes designed to let service providers profit through unscrupulous and illegal business practices.”
The Texas builder agreed to a settlement to avoid protracted litigation with the government, according to his attorney Dan Hagood. “The government did not impose a penalty and the company neither admitted nor denied claims by the CFPB. As far as we are concerned, the matter is closed,” Hagood told NMN.
It is illegal under the Real Estate Settlement Procedures Act to refer customers to mortgage lenders or settlement service providers for a fee without providing a service.
In this case, the CFPB alleged that Taylor created “sham” joint ventures with the bank and the mortgage company to collect referral fees.
The Federal Deposit Insurance Corp. notified the CFPB about Taylor’s referrals to Benchmark Bank. “The FDIC separately fined Benchmark Bank for its role in the RESPA violations,” the bureau said.