CFPB cracks down on loan officers, title company for kickback scheme

by Ryan Smith04 May 2015
The Consumer Financial Protection Bureau and the Maryland Attorney General have sued a title company and three loan officers for allegedly participating in a mortgage kickback scheme. Under the proposed consent order filed by the CFPB and the Maryland AG, five of the six individual defendants would be banned from the mortgage industry and required to pay a total of $662,500 in penalties. The CFPB took enforcement action against Wells Fargo and JPMorgan Chase in January for their alleged roles in the scheme.

The complaint names Genuine Title, LLC, along with owner Jay Zukerberg and director of marketing Brandon Glickstein, as well as Maryland loan officers Gary Klopp, Adam Mandelberg, William Peterson and Angela Pobletts. A number of limited liability companies controlled by various defendants were also named.

According to the complaint, Zukerberg and Glickstein operated a scheme to exchange marketing services and cash payments for business referrals from loan officers, in violation of the Real Estate Settlement Procedures Act.

It’s also alleged that the defendants funneled illegal cash payments through a network of companies they created and controlled in order to deflect suspicion. According to the complaint, between 2009 and 2013, Zukerberg and Glickstein arranged cash payments in amounts from $130,000 to $500,000.

“Paying kickbacks for mortgage referrals is illegal, and it has been illegal for decades,” said CFPB Director Richard Cordray. “Secret and unlawful payments keep consumers in the dark and put honest businesses at a disadvantage, and the Consumer Bureau will continue to take action against them.”

If the court agrees to the consent order, the defendants would face the following sanctions:
  • Jay Zukerberg would be banned from the mortgage industry for five years and required to pay $130,000 in redress and penalties.
  • Brandon Glickstein would be banned from the industry for five years and required to pay $400,000 in redress and penalties.
  • Adam Mandelberg would be banned from the industry for two years and required to pay $30,000 in redress.
  • William Peterson would be banned for two years and required to pay $65,000 in redress.
  • Angela Pobletts would be banned for two years and required to pay $37,500 in redress.
Mandelberg, Peterson and Pobletts would also be required to report the action to the Nationwide Mortgage Licensing System (NMLS). The action will proceed against the remaining defendant, Gary Klopp.
 
 

COMMENTS

  • by Michael | 5/11/2015 1:55:52 PM

    To my knowledge, kickbacks have been illegal as long as I have been in the mortgage industry 20+ years, so why the need for another federal agency, especially one with no congressional oversight. Another example of government redundancy and waste.

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