Published by Smith Gildea & Schmidt | April 21, 2025
Alleged Kickbacks Violated RESPA and Inflated Borrower Costs
Pennsylvania Attorney General Michelle Henry has filed a lawsuit against Barry Newhart and six Lehigh Valley mortgage broker companies for allegedly orchestrating an illegal kickback scheme in violation of the Real Estate Settlement Procedures Act (RESPA). The lawsuit alleges that real estate agents were given secret perks—including ownership interests, dinners, and entertainment—to refer homebuyers to certain mortgage companies, without disclosing these financial incentives.
These types of hidden arrangements violate federal law, inflate closing costs, and undermine homebuyer trust in an already complex process.
🛑 Why Kickbacks in Real Estate Are Harmful to Consumers
RESPA was designed to ensure transparency and fairness in the real estate settlement process. When illegal kickbacks occur:
- Homebuyers overpay due to inflated fees not based on fair market competition.
- Consumer choice is reduced, as agents steer clients to companies based on personal benefit—not the client’s best interest.
- The integrity of the real estate market is compromised, hurting law-abiding professionals.
⚖️ Affected Borrowers May Be Entitled to Three Times the Kickback-Related Charges
If you purchased a home and believe your real estate agent or broker referred you to a mortgage or title company based on undisclosed financial arrangements, you may have a legal claim. Under RESPA, borrowers can recover up to three times the amount of the illegal charges paid in connection with the violation.
👥 Former Industry Insiders: Your Voice Can Help Fix a Broken System
If you’re a former employee of a mortgage lender, broker, or real estate firm and witnessed illegal referral practices, you can play a crucial role in exposing RESPA violations and protecting consumers.
While RESPA does not offer whistleblower rewards, the law protects whistleblowers from retaliation. Your testimony could help clean up a corrupt system and prevent others from being exploited.
📞 Call Smith Gildea & Schmidt: National Leaders in RESPA Litigation
Smith Gildea & Schmidt is a nationally recognized law firm with extensive experience litigating RESPA kickback cases, holding industry players accountable, and defending consumer rights in real estate transactions.
Whether you’re a borrower affected by an illegal referral or a former insider ready to speak out, we’re here to help you navigate your legal options with confidence and discretion.
🔹 Free Consultation
🔹 Confidential Review
🔹 Decades of Combined Experience in Real Estate and Consumer Protection Law
👉 Contact SGS today to schedule a consultation or learn more about your rights:
📞 (410) 821-0070 | 💻 https://www.sgs-law.com/contact/