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CFPB fines mortgage bank for illegal compensation

mpamag.com | June 10, 2015

By Ryan Smith

The Consumer Financial Protection Bureau has ordered a defunct California mortgage bank to pay $228,000 for paying illegal incentives to its loan officers.

The CFPB ordered Guarantee Mortgage Corporation to pay the penalty for paying its branch managers based in part on the interest rates of the loans they closed.

Guarantee, which is now out of business, was a mortgage banking firm with 10 branches in the San Francisco Bay Area. According to the CFPB, the firm paid originators based in part on the interest rates of loans they closed. That’s a violation of the Loan Originator Compensation Rule, which aims to prevent originators from steering customers into loans with unnecessarily high interest rates.

Guarantee funded the compensation by making payments to marketing services entities owned in part by company branch managers and other Guarantee originators. The originators then drew a portion of those funds as compensation.

Guarantee, which is in the process of dissolving, will have to pay the ordered fine to the CFPB’s Civil Penalty Fund.


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CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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