- Free Classic Regatta Returns to Huntington
- Hot Humid Natsu 2016 Prepares for Fall Con IMAGES
- Rooster's Hosts Princess Night with Mickey and Minnie Mouse IMAGES
- Authorities Request Information on Disappearance of Ohio Woman
- Spook Hunters Visit Pullman Square Marquee Cinema IMAGES
- Mrs. West Virginia Uses Breast Cancer Diagnosis to Shed Light on Importance of Clinical Trials and Never Giving Up Hope
- Pipestem Resort State Park controlled deer hunt applications available for Nov. 3, 4 and 5
- Nostalgic Images of Ten Forgotten Huntington Venues
- A Decade Of Dio: 1983-1993 - CD Version of Boxed Set on Sale
- REVISED: HPD Makes Three Arrests for Auto Tampering; Grand Larceny , Burglary Reports Taken
Consumer Financial Protection Bureau Takes Action Against RealtSouth for Mortgage Disclosure Violations
The practices identified by the CFPB’s investigation illegally benefited TitleSouth LLC, an affiliated company owned by the same holding company that owns RealtySouth.
“Disclosures give consumers the power to make informed financial decisions, and buying a house is among the biggest financial decisions most people ever make,” said CFPB Director Richard Cordray. “The Consumer Bureau will continue to take action against companies that attempt to modify disclosures and keep consumers in the dark.”
The Bureau charged that RealtySouth violated the Real Estate Settlement and Practices Act (RESPA), which protects consumers during the home-buying process by prohibiting kickbacks for referrals of real estate settlement services. RealtySouth’s preprinted form purchase contracts, which its agents provided to homebuyers preparing to make an offer on a home, either explicitly directed or suggested that title and closing services be conducted by its affiliate, TitleSouth.
While RESPA allows real estate companies to refer their customers to affiliated businesses, the law requires them to provide consumers an “Affiliated Business Arrangement” (ABA) disclosure that clearly states their right to shop around for a better price and that they are not required to use the affiliated company. The disclosure RealtySouth gave consumers did not comply with the law; it did not properly highlight consumers’ rights, and the required language was buried in a section of text that also made marketing claims about the company’s prices.
The case was referred to the CFPB by the Department of Housing and Urban Development. RealtySouth changed its disclosure forms immediately after being contacted by the CFPB.
Under the terms of today’s consent order, RealtySouth will pay a civil penalty of $500,000, ensure that its disclosures comply with RESPA, and ensure that its training materials emphasize that its agents cannot require the use of affiliates.
A copy of the Bureau’s consent order is available here: http://files.consumerfinance.gov/f/201405_cfpb_consent-order_realty-south-and-title-south.pdf
* * *
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.