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CFPB Sues Lender for Violating Compensation Rule

July 25th, 2013 Comments off

A mortgage lender is being sued by the Consumer Financial Protection Bureau (CFPB) for allegedly paying bonuses to loan originators that charged consumers higher interest rates in violation of the loan officer compensation rule. The 85th largest lender in the country, Castle and Cooke Mortgage LLC of Salt Lake City is said to have paid 150 loan officers quarterly bonuses ranging from $6,100 to $8,700 for leading borrowers into higher-priced loans. The Bureau

 

says loan officers who did not charge higher rates did not receive bonuses, and that 1,100 of the loans were illegal. According to what MHProNews has learned from nationalmortgagenews, C&C originated $332 million in loans in the first quarter. The lawsuit seeks restitution and civil penalties, and specifically cites company president Matthew Pineda and senior vice president Buck Hawkins. “We are taking action against the type of practices that precipitated the financial crisis,” said CFPB director Richard Cordray.

(Photo credit: top, ABCNews; bottom, HousingWire)