From the Thordsen Law Offices
THIS IS WHAT HAPPENS WHEN ANYONE VIOLATES RESPA.
ESPECIALLY SO BLATANTLY!
If there are any questions then call.
CONSUMER FINANCIAL PROTECTION BUREAU AND STATE OF MARYLAND FILE LAWSUIT AGAINST LOAN OFFICERS AND FORMER TITLE COMPANY EXECUTIVES WHO TRADED CASH AND MARKETING SERVICES FOR ILLEGAL REFERRALS AND WILL BE BANNED FROM THE INDUSTRY AS WELL AS PAY REDRESS AND PENALTIES
THIS IS A CONSENT JUDGMENT AS TO ALL BUT ONE
On April 29, 2015 the Consumer Financial Protection Bureau (CFPB) and the Maryland Attorney General filed a lawsuit against the participants in a mortgage-kickback scheme. In the complaint filed in federal court, the CFPB and Maryland allege that the Maryland-based title company’s executives and the named loan officers traded cash and marketing services in exchange for mortgage referrals. Under proposed consent orders filed April 29, 2015, if entered by the court, FIVE OF THE SIX INDIVIDUAL DEFENDANTS WOULD BE BANNED FROM THE MORTGAGE INDUSTRY AND REQUIRED TO PAY A TOTAL OF $662,500 IN REDRESS AND PENALTIES. The action will proceed against the remaining defendant.
GENUINE TITLE WAS A MARYLAND-BASED TITLE COMPANY that offered real estate closing services from 2005 until it went out of business in April 2014. The CFPB and Maryland Attorney General’s COMPLAINT NAMES GENUINE TITLE, LLC; JAY ZUKERBERG; BRANDON GLICKSTEIN; GARY KLOPP; ADAM MANDELBERG; WILLIAM PETERSON; ANGELA POBLETTS; AND A NUMBER OF LIMITED-LIABILITY COMPANIES CONTROLLED BY CERTAIN DEFENDANTS. Zukerberg was the founder and sole owner of Genuine Title, and Glickstein was the company’s director of marketing. Klopp, Mandelberg, and Pobletts were loan officers working in the greater Baltimore area. Peterson was a loan officer and the president of a Maryland-based mortgage brokerage.
The CFPB and Maryland allege that Zukerberg and Glickstein developed and operated schemes to give loan officers marketing services and cash payments in exchange for referrals of mortgage business. The kickback schemes violated the Real Estate Settlement Procedures Act (RESPA), which prohibits giving a “fee, kickback, or thing of value” in exchange for a referral of business related to a real estate settlement service.
Specifically, the Bureau and Maryland allege that the defendants:
Exchanged valuable marketing services for referrals: Genuine Title offered services, including purchasing, analyzing, and providing data on consumers, and creating letters with the loan officers’ contact information that the company printed, folded, stuffed into envelopes, and mailed. In return, the loan officers would refer homebuyers to the company for closing services. This scheme was especially profitable for the loan officers, who generally are paid by commission, because the marketing services increased the amount of business they generated.
Funneled illegal cash kickbacks through a network of companies: The four individual loan officers named in the lawssujit allegedly received cash payments through companies they created and controlled. Zukerberg knew that it would look “fishy” if Genuine Title paid cash directly to the loan officers. So, instead, Genuine Title funneled the payments to loan officers through companies created by the loan officers. From 2009 to 2013, Zukerberg and Glickstein arranged for cash payments to the loan officers from Genuine Title in amounts ranging from about $130,000 to $500,000.
Under the consent orders filed April 29,2015 the same day the lawsuit was filed, if entered by the court, the individual defendants would be subject to the following sanctions:
JAY ZUKERBERG would be banned from the mortgage industry for five years, required to pay $130,000 in redress and penalties, and prohibited from further violations of RESPA.
BRANDON GLICKSTEIN would be banned from the mortgage industry for five years, required to pay $400,000 in redress, and prohibited from further violations of RESPA.
ADAM MANDELBERG would be banned from the mortgage industry for two years, required to pay $30,000 in redress, and prohibited from further violations of RESPA.
WILLIAM PETERSON would be banned from the mortgage industry for two years, required to pay $65,000 in redress, and prohibited from further violations of RESPA.
ANGELA POBLETTS would be banned from the mortgage industry for two years, required to pay $37,500 in redress, and prohibited from further violations of RESPA.
Genuine Title, LLC would be prohibited from further violations of RESPA.
Mandelberg, Peterson, and Pobletts also would be required to report this action to the Nationwide Mortgage Licensing System & Registry. The action will proceed against the remaining defendant, Gary Klopp.
Under the proposed consent orders, some consumers who obtained loans from the individual loan officers – or, in some cases, other loan officers they worked with – and paid fees for services where legal violations occurred would receive partial or complete refunds of those fees. The Bureau would determine who those consumers are, and would contact consumers who are eligible for relief.
A copy of the CFPB and Maryland’s complaint is available here:
The consent order filed with the court for Jay Zukerberg is available here: http://files.consumerfinance.gov/f/201504_cfpb_proposed-order_zukerberg.pdf
The consent order filed with the court for Brandon Glickstein is available here:
The consent order filed with the court for Adam Mandelberg is available here: http://files.consumerfinance.gov/f/201504_cfpb_proposed-order_mandelberg.pdf
The consent order filed with the court for William Peterson is available here: http://files.consumerfinance.gov/f/201504_cfpb_proposed-order_peterson.pdf
The consent order filed with the court for Angela Pobletts is available here: http://files.consumerfinance.gov/f/201504_cfpb_proposed-order_pobletts.pdf
The consent order filed with the court for Genuine Title, LLC is available here:
More information about the January 2015 enforcement action against Wells Fargo and JPMorgan Chase is available here:
How stupid can you get? There are legal ways to develop business and these took the “cannot do” and did it. AND got caught.
Herman Thordsen, Esq.
THORDSEN LAW OFFICES
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