Kickback Accusations Resolved by CFPB Consent Filing

by devteam May 18th, 2013 | Share

A Texas homebuilder will surrender</bmore than $100,000 to the Consumer Finance Protection Agency under a consentrnorder filed on Friday.  Paul Taylor, arnprincipal of Paul Taylor Homes Unlimited and Paul Taylor Corporation wasrnaccused of receiving kickbacks for referring homebuyers to Benchmark Bank andrnto Willow Bend Mortgage Company for their mortgages.  Under the agreement Taylor is also prohibitedrnfrom engaging in future real estate settlement services including mortgagernorigination.   </p

Under the consent order, under whichrnthe respondents neither accepted nor denied the CFPB findings, the Bureaurncontends that Taylor and Benchmark jointly created and owned Stratford MortgagernServices and Willow Bend and Taylor created PTH Mortgage Company.  Both companies, which the CFPB contends werernshams, operated as mortgage originators. rn </p

Taylor’s homebuilding company<breferred mortgage business to the two companies he jointly owned with thernbanks.  CFPB says that neither companyrnmaintained employees or office space and originations were done in bank officesrnand by bank employees.  Taylor howeverrnwas paid for the referrals through profit distributions and as a paymentrnthrough a “service agreement.”   CFPB called the transactions violations of thernReal Estate Settlement Procedures Act (RESPA)   </p

 “Kickbacks harm consumers by hampering fairrnmarket competition and by unnecessarily increasing the costs of getting arnmortgage,” said CFPB Director Richard Cordray. “The CFPB will continue to takernaction against schemes designed to let service providers profit throughrnunscrupulous and illegal business practices.”</p

Taylor has agreed to payrn$118,194.20, the full amount of money he received since early 2010 from thernkickback schemes.  The payment will be deposited in the United StatesrnTreasury.  Benchmark Bank was separatelyrnfined for its role by the Federal Deposit Insurance Corporation which alsornreferred the Taylor matter to the CFPB.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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