1st Alliance Lending of East Hartford must pay an $83,000 civil penalty announced Monday by the Consumer Financial Protection Bureau for violating a federal law by splitting real estate settlement fees.
The CFPB says 1st Alliance reported he violations to the bureau, admitting liability, and offered additional information.
“These types of illegal payments can harm consumers by driving up the costs of mortgage settlements,” said CFPB Director Richard Cordray. “The Bureau will use its enforcement authority to ensure that these types of practices are halted. We will, however, also continue to take into account the self-reporting and cooperation of companies in determining how to resolve such matters.”
The CFPB says First Alliance, beginning in 2010, used a hedge fund to finance its loans and split revenues and fees with the hedge fund’s affiliates. That lasted a year, but 1st Alliance continued to split and origination and loss-mitigation fees with the hedge fund.
1st Alliance last year reported to the CFPB that it believed those payments violated the Real Estate Settlement Procedures Act.