X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ATLANTA-In a prepared statement, HUD says it has settled a kickback-fee investigation involving locally based Znet Financial, ReMax of Atlanta, certain of their officers and affiliated companies and 14 ReMax agents.

HUD says Znet Financial has agreed to pay the Treasury Department $15,000 and the agents have agreed to refund $400 to each customer referred to Znet for a total $9,200. The individual agents were not named in the statement which was released to the media.

HUD says the defendants allegedly violated the Real Estate Settlement Procedures Act (RESPA) which HUD Secretary Mel Martinez vowed last year to reform. The statement says the defendants agreed to settle “after HUD determined all violated the anti-kickback and unearned fee provisions of RESPA.”

The statement says HUD’s investigation found that Znet represented the ReMax of Atlanta agents as “employees,” paying them $400 each for each consumer referred to Znet.

“The real estate agents are actually ‘sham employees’ after investigators found the agents performed little or no origination work, other than filling out loan application forms,” HUD’s statement says.

John C. Weicher, HUD Assistant Secretary for Housing and federal Housing Commissioner, says in the same statement, “RESPA is very clear that creating the illusion of employment to mask otherwise illegal referral fees is not permitted. Real estate agents, brokers and lenders should know that they will be held accountable for kickbacks and unearned fees.”

Under terms of the settlement, the defendants “agreed to stop this bogus employee compensation,” the HUD statement says.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 3 free articles* across the ALM subscription network every 30 days
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.