PhotoFidelity Mortgage Corporation and its former owner and current president, Mark Figert, have been hit with an $81,076 penalty for funneling illegal kickbacks to a bank in exchange for real estate referrals.

“Kickbacks harm consumers by hampering fair market competition and by unnecessarily increasing the costs of getting a mortgage,” said Consumer Financial Protection Bureau (CFPB) Director Richard Cordray. The bureau, he added, “will continue to take action against schemes that steer consumers to lenders through unscrupulous and illegal business practices.”

Kickbacks in disguise

The St. Louis-based non-depository mortgage lender is accused of entering into an agreement with a bank in which the bank referred potential borrowers to Fidelity in exchange for kickbacks. The kickbacks were disguised as inflated lease payments for renting office space within the bank. The Real Estate Settlement Procedures Act (RESPA) prohibits giving and receiving kickbacks for referrals of settlement-service business involving federally-related mortgages.

When companies pay kickbacks in exchange for referrals, it can hurt competition and inflate real estate settlement costs for consumers, while creating an uneven playing field that puts law-abiding businesses at a disadvantage.

Under the terms of the consent order, Fidelity and Figert are required to pay back all of the company’s proceeds from the unlawfully referred business -- a total of $27,076 that will be deposited in the United States Treasury. Additionally, the CFPB is ordering Fidelity and Figert to pay a $54,000 civil penalty.


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