Since assuming enforcement of the Real Estate Settlement and Procedures Act (RESPA) from HUD three years ago, the Consumer Financial Protection Bureau has shown the mortgage, title, and realty sectors that it means business.
Whereas HUD had not made the law a priority, Gary Lacefield -- who formerly worked as a RESPA officer at the agency -- says "the CFPB has taken it to a whole different level." More specifically, the watchdog has 11 settlements or lawsuits under its belt against companies suspected of violating laws that disallow the payment of incentives for referring customers.
The rules are designed to safeguard borrowers from padded mortgage and closing costs, but Lacefield says the CFPB's enforcement actions on RESPA have not resulted in much restitution for consumers. He believes consumers would benefit more if the regulator were to train its spotlight on the ties between home builders and mortgage firms -- especially in situations where buyers are offered upgrades or price discounts for using a particular lender.