WASHINGTON (6/9/15)--Guarantee Mortgage Corp. (GMC) will be required to pay a civil penalty of $228,000 for paying its branch managers based, in part, on the interest rates of the loans they closed, according to a Consumer Financial Protection Bureau consent order.
GMC consented to the order without admitting or denying any of the findings of fact or conclusions, except to acknowledge that the CFPB had jurisdiction over the mortgage broker and the subject matter of this action.
GMC, now defunct, was a mortgage banking firm that operated 10 branches in the San Francisco Bay area.
The consent order notes that due to accounting methods used by CMG, "retail loans typically generated more revenue the greater the rate of interest above par. Consequently, owners of marketing services entities received compensation based on the terms of loans they had originated."
The order also notes that, to the extent that "Respondent lacks the financial resources to pay the full civil money penalty," GMC must obtain contributions from its individual owners "sufficient to pay the full penalty." The penalty must be paid in full within 10 days of when the June 5 consent order was issued.