RPM Mortgage and its chief executive are facing $20 million in fines on allegations that the company violated the loan originator compensation law enforced by the Consumer Financial Protection Bureau.
The CFPB said Wednesday it filed an order and complaint in federal court against the Alamo, Calif.-based lender and CEO Erwin Robert Hirt for allegedly paying bonuses and higher commissions to loan originators for steering consumers into costlier mortgages. RPM has agreed to pay a $1 million civil money penalty as well as $18 million in redress for affected consumers, while Hirt will pay an additional $1 million penalty. The fines are pending approval by the court.
“RPM rewarded its loan officers for steering consumers into mortgages with higher interest rates,” said CFPB Director Richard Cordray in a press release. “Today we are putting an end to RPM’s unlawful practices and holding Robert Hirt personally responsible for his […]
It had all the trappings of a traditional D.C. compromise: bipartisan congressional briefings, conference calls with industry leaders and some praise immediately following the announcement.
But make no mistake: the Consumer Financial Protection Bureau gave little ground in its pledge Wednesday to be “sensitive” to lenders that make a “good-faith effort” to comply with new mortgage disclosure rules that go into effect in August. The agency’s position was essentially the same as it was previously, and its statements fell short of a formal grace period that the industry and lawmakers had been demanding.
“This CFPB letter is a non-event,” said Richard Horn, one of the CFPB’s former team leaders who helped write the new disclosure rule. “They were probably going to give credit for good-faith efforts by lenders who complied with the rule anyway.”
Still, that didn’t stop some trade groups from declaring […]
The 60-day countdown has begun.
Banks and mortgage lenders are in the final stretch of preparing to deliver new mortgage disclosures to borrowers starting Aug. 1, as required by the Consumer Financial Protection Bureau. The Dodd-Frank Act ordered the bureau to integrate the disclosures of the Truth in Lending Act and the Real Estate Settlement Procedures Act into one form, known as TRID, that is meant to help consumers more clearly understand the total costs of a home loan.
Despite much hand-wringing by the industry, many lenders are said to have well-developed plans to comply with the 1,888-page integrated disclosure rule, which was years in the making.
Still, insecurities abound. The chances of a mistake are high with a rule so rigid that it requires fees to be listed in alphabetical order, and the costs for violators will be steeper than ever. Massive, and […]
Provident Funding Associates, a private mortgage lender, has agreed to pay $9 million to settle allegations its brokers charged minorities higher fees and interest rates, federal regulators said Thursday.
In a joint complaint from the Consumer Financial Protection Bureau and the Justice Department, regulators said Provident gave some pricing discretion to its brokers, resulting in them discriminating against 14,000 African American and Hispanic borrowers.
“Consumers should never be charged higher fees because of their race or national origin,” said CFPB Director Richard Cordray in a press release. “We will continue to root out illegal and discriminatory lending practices in the marketplace. I look forward to working closely with our partners at the Department of Justice to ensure consumers are treated fairly.”
California-based Provident was cited largely because of the pricing structure it uses with its brokers, which allowed them to raise the interest rate and broker fees beyond […]