HUD reaches $1.25 million settlement with mortgage lender for concealing defaults from FHA

Franklin First FHA lawsuitOn February 7, the US Attorney for the Eastern District of New York, the Office of the Inspector General for the Department of Housing and Urban Development (HUD), and the Inspector General for the Federal Deposit Insurance Corporation (FDIC) issued a press release announcing a settlement agreement with residential mortgage lender, Franklin First Financial, Ltd. (Franklin First).

The lawsuit, which was filed in September 2015, alleged that Franklin First and several executives conspired to hide their high default rate from HUD so it could continue to issue loans insured by the Federal Housing Administration (FHA).

CFPB fines Prospect Mortgage $3.5 million for illegal kickbacks scheme

CFPB fines Prospect MortgageOn January 31, the CFPB fined Prospect Mortgage $3.5 million for allegedly paying illegal kickbacks for mortgage business referrals. The CFPB also took action against Keller Williams Realty Mid-Willamette, ReMax Gold Coast, and Planet Home Lending for accepting illegal kickbacks from Prospect Mortgage.

The CFPB alleged that the entities engaged in various practices involving illegal kickbacks for referrals of mortgage business in violation of the Real Estate Settlement Procedures Act (RESPA). RESPA prohibits kickbacks and referral fees in connection with a real estate settlement such as title insurance, inspections, appraisals, and loan origination.

Federal agencies fine default management company $65 million

Service Link finedOn January 24, the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve (Fed), and the Office of the Comptroller of the Currency (OCC) issued a press release announcing an enforcement action against ServiceLink Holdings, LLC (Service Link). The federal agencies fined $65 million for improper actions by its predecessor company, Lender Processing Services, Inc. (LPS), that resulted in significant deficiencies in the foreclosure-related services that LPS provided to mortgage servicers.

CFPB enters consent order with CitiFinancial for $8.8 million

On January 23, the CFPB issued a press release announcing that it entered into a consent order with CitiFinancial Servicing for alleged violations of the Real Estate Settlement Procedures Act (RESPA), the Fair Credit Reporting Act (FCRA), and the Consumer Financial Protection Act (CFPA).

CitiFinancial Servicing (CitiFinancial) is comprised of four entities incorporated in Delaware,