Quicken Real Estate Affiliate Under CFPB Investigation for Possible RESPA Violations

Just when you thought it was safe to swim in the mortgage industry regulatory waters, and it seemed that the CFPB’s teeth had been ground down by legal challenges and political winds, news emerges that the risk of aggressive oversight remains a concern for many.

In May the Consumer Financial Protection Bureau (CFPB) issued an investigative demand letter to Rocket Homes, the real estate brokerage affiliate of Quicken Loans (of “Rocket Mortgage” fame).  Industry news outlets are reporting the focus of this investigation will be on potential RESPA violations seemingly connected to the cozy relationship between the realtor side and the mortgage lending side of the Quicken business model.

While there is no reason to believe that Quicken and its affiliates violated any laws or regulations, the fact that they have fallen under scrutiny shows that the CFPB is not averse to scrutinizing affiliate relationships nor are they concerned about taking on large lenders with high profiles.  Recall that Quicken recently took steps to launch an IPO and become a publicly traded company.  Whether that placed the company in the cross hairs of the regulatory giant or  not is not known, however the CFPB has been historically shown to pay close attention to very large lenders and the business operations that made them a national success.

The key takeaway to this news is that the CFPB is alive and well and willing to send you an investigative demand letter.  Regulatory and compliance issues especially related to affiliates and vendor management remain important and deserve your continued focus, no matter the size and footprint of your lending business. In addition, if you are allowing an affiliate to act as a vendor, you have an even greater obligation to establish an independent oversight and vendor management process to assure regulators that these relationships are as secure and proper from a consumer viewpoint as your relationship with non-affiliates.

For more information check out The American Banker and Housing Wire for full coverage.





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