The Consumer Financial Protection Bureau (CFPB) is accusing a Kentucky law firm of violating the RESPA kickback provisions. The bureau alleged that the firm, Borders & Borders PLC, and its principals, used a network of sham affiliated business arrangements (AfBAs) to pay kickbacks in return for referrals of real estate settlement business.
In a statement released by Borders & Borders, the law firm said it did not pay kickbacks or violate RESPA in any way.
“The CFPB’s statement in its press release that we ‘paid kickbacks’ or did anything illegal could not be further from the truth,” the law firm said. “We are a family-owned firm that has been in business for over 40 years, and we would not and did not violate RESPA. This case concerns a number of title agencies that were affiliated with our firm several years ago. The title agencies were ‘affiliated business arrangements’ that are expressly allowed by RESPA.”
In its complaint, the CFPB alleged that Borders & Borders violated RESPA by paying kickbacks to real estate and mortgage brokerage companies that referred business to the firm. The kickbacks, the bureau claims, were disguised as profit distributions made by nine joint ventures that were created and operated by Borders. According to the bureau, the firm also failed to provide adequate AfBA disclosures to its customers, which are required under RESPA and Regulation X.
The company disputes these allegations and says the bureau’s facts are not correct.
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