WASHINGTON (10/1/14)--A Michigan-based title insurance agency has been ordered by the Consumer Financial Protection Bureau (CFPB) to pay $200,000 for illegal quid pro quo referral agreements.
According to a statement from the bureau, Lighthouse Title entered into marketing services agreements with various companies with the understanding that the companies would refer mortgage closings and title insurance business to Lighthouse.
The Real Estate Settlement Procedures Act prohibits providing something of value to any person with an agreement or understanding that the person will refer real estate settlement services.
The agreements between Lighthouse Title and other companies made it appear as if the payments would be based on marketing services the companies were supposed to provide to Lighthouse. However, Lighthouse actually set the fees it would pay under the marketing services agreements by considering the number of referrals it received or expected to receive from each company, according to the bureau.
The CFPB's investigation found that the companies on average referred significantly more business to Lighthouse when they had such agreements than when they did not.
In addition to the civil money penalty of $200,000, Lighthouse is also required to terminate immediately any existing agreements with companies in a position to refer business to Lighthouse and is prohibited from entering into new agreements with any such companies.
Use the resource link below to access the full consent order.