Freedom Mortgage Corporation, a major mortgage lender in the United States, has faced multiple lawsuits in recent years. In 2022, the company was accused of engaging in illegal kickbacks and providing false data to federal regulators.
Illegal Kickbacks
In August 2022, the Consumer Financial Protection Bureau (CFPB) fined Freedom Mortgage $1.75 million for paying illegal kickbacks to real estate brokers and agents in exchange for mortgage loan referrals. The CFPB alleged that Freedom Mortgage paid these kickbacks through a variety of methods, including cash payments, gift cards, and trips.
False Data Reporting
In October 2022, the CFPB filed a lawsuit against Freedom Mortgage alleging that the company had submitted inaccurate mortgage loan data to the CFPB. The CFPB alleged that Freedom Mortgage’s data was riddled with errors, which could make it difficult for consumers to shop for mortgages and could also lead to discriminatory lending practices.
Impact on Borrowers
The allegations against Freedom Mortgage could have a significant impact on borrowers. Borrowers who obtained mortgages from Freedom Mortgage may have been charged higher interest rates or fees as a result of the company’s illegal kickbacks. Borrowers may also have difficulty refinancing their mortgages if Freedom Mortgage’s data is inaccurate.
Conclusion
The lawsuits against Freedom Mortgage are a reminder of the importance of borrower vigilance. Borrowers should carefully review their mortgage documents and should not hesitate to contact the CFPB if they have any concerns about their loans.
FAQs
What is a kickback?
A kickback is a payment made in exchange for a referral or other service. Kickbacks are illegal in the mortgage industry because they can lead to higher interest rates and fees for borrowers.
What is HMDA data?
HMDA data is data on mortgage loans that is collected by the CFPB. HMDA data is used to identify patterns in lending and to ensure that lenders are not discriminating against borrowers.
What can I do if I have concerns about my mortgage loan from Freedom Mortgage?
If you have concerns about your mortgage loan from Freedom Mortgage, you should contact the CFPB. You can also contact the Federal Trade Commission (FTC) if you believe that you have been a victim of fraud.
What is the CFPB?
The CFPB is a government agency that protects consumers from financial fraud. The CFPB can investigate companies that are suspected of violating consumer protection laws.
What is the FTC?
The FTC is a government agency that protects consumers from unfair or deceptive business practices. The FTC can investigate companies that are suspected of violating consumer protection laws.
How can I stay informed about mortgage scams?
You can stay informed about mortgage scams by visiting the websites of the CFPB and FTC. You can also sign up for email alerts from these agencies.
References
- [Consumer Financial Protection Bureau. (2022, August 11). CFPB Fines Freedom Mortgage $1.75 Million for Illegal Kickbacks. Retrieved from https://www.consumerfinance.gov/about-us/newsroom/cfpb-penalizes-freedom-mortgage-and-realty-connect-for-illegal-kickbacks/]
- [Consumer Financial Protection Bureau. (2022, October 10). CFPB Sues Freedom Mortgage Corporation for Providing False Information to Federal Regulators. Retrieved from https://www.consumerfinance.gov/about-us/newsroom/cfpb-sues-repeat-offender-freedom-mortgage-corporation-for-providing-false-information-to-federal-regulators/]
- [Federal Trade Commission. (2023, February 8). Mortgage Scams. Retrieved from https://www.ftc.gov/news-events/news/press-releases/2022/06/federal-trade-commission-returns-more-164000-consumers-harmed-bogus-mortgage-relief-scam]
