Just days after disclosing a settlement with a lender over the use of yield spread premiums, the Consumer Financial Protection Bureau is at it again — bringing to six the number of recent YSP-related settlements.
An investigation conducted by the CFPB found that Guarantee Mortgage Corp. compensated branch managers and originators for obtaining higher interest rates.
The company allegedly funded the YSP compensation through payments to marketing services entities partially owned by the branch managers and originators — who allegedly drew a portion of those fees as compensation.
The alleged activities occurred from April 2011 through August 2012.
Such practices are in violation of the Loan Origination Compensation Rule, which was implemented in July 2011.
San Rafael, California-based Guarantee, which is not related to the large retail lender Guaranteed Rate Inc., reportedly operated 10 branches in the San Francisco are — though it is no longer in business and in the process of dissolving.
On Friday, the CFPB announced that it
reached an agreement with Guarantee Mortgage to settle the charges of illegal YSP compensation.
A consent order executed last month requires that the company pay a $228,000 civil penalty.
The regulator has been on a roll with YSP-related settlements.
Just last week,
the CFPB announced
it reached an agreement with RPM Mortgage Inc.
Among other firms that previously settled allegations of illegally using YSPs are Franklin Loan Corp., Castle & Cooke Mortgage LLC, National City Bank and Provident Funding Associates LP.
