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The Consumer Financial Protection Bureau (CFPB) has levied a $1.75 million fine against Freedom Mortgage Corp., accusing the Boca Raton, Florida-based lender of providing illegal incentives to real estate brokers and agents in exchange for mortgage loan referrals.

The CFPB separately issued a $200,000 penalty against Realty Connect USA Long Island for accepting numerous illegal kickbacks from Freedom.

According to the CFPB, Freedom provided real estate agents and brokers with numerous incentives including cash payments, paid subscription services, and catered parties, with the understanding they would refer prospective homebuyers to Freedom for mortgage loans. These incentives run afoul of the Real Estate Settlement Procedures Act, which prohibits referrals through illegal marketing service arrangements:

Freedom is accused of entering into marketing services agreements with over 40 real estate brokerages since 2017, with the company making monthly payments totaling approximately $90,000 to brokerages in exchange for the brokerages’ marketing services. However, Freedom used these marketing services agreements to pay for mortgage referrals, rather than compensate the brokerages for marketing services they performed. Realty Connect received $6,000 per month from Freedom but failed to perform many of the marketing tasks required under the agreement.

“Freedom provided kickbacks to real estate brokers and agents — including those at Realty Connect — in return for mortgage referrals, a clear violation of federal law,” said CFPB Director Rohit Chopra. “The CFPB will be vigilant in rooting out anti-competitive behavior that interferes with consumers’ ability to choose financial products and services.”

Neither Freedom nor Realty Connect has publicly commented on the CFPB fines.