Quantcast

CFPB Fines Lender Over Settlement Fees

FEB 24, 2014 6:18pm ET
Print
Email
Reprints
Comment
Twitter
LinkedIn
Facebook
Google+

The Consumer Financial Protection Bureau levied a $83,000 civil money penalty on Monday against Connecticut-based First Alliance Lending, a specialty firm that focuses on providing loss-mitigation financing to distressed borrowers.

The agency said the lender violated the Real Estate Settlement Procedures Act by improperly splitting revenues and fees with affiliates of a hedge fund it used to finance loans. The hedge fund received payments from 83 First Alliance loans made during a seven-month period ending in April 2012.

“These types of illegal payments can harm consumers by driving up the costs of mortgage settlements,” said CFPB Director Richard Cordray in a press release.

The violations were self-reported by First Alliance, which admitted liability and provided information “related to the conduct of other actors that has facilitated other enforcement investigations,” the CFPB said.

Cordray said the CFPB took into account the fact that the violations were self-reported and that the lender cooperated. RESPA bans splitting origination and settlement fees with other parties.

In a statement, First Alliance also emphasized that it had reported the violations directly to the CFPB, calling them “technical in nature.”

“This was an isolated situation and the entire matter was limited to the relationship between First Alliance and a hedge fund that previously provided warehouse funding,” the lender said.

"We are pleased this matter has come to a conclusion," said David Ward, general counsel for First Alliance. 

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments:
Not Registered?
You must be registered to post a comment. Click here to register.
Already registered? Log in here
Please note you must now log in with your email address and password.
Already a subscriber? Log in here
Please note you must now log in with your email address and password.