They Think No One Is Watching. They're Wrong.

Someone in the Mortgage Industry Told Me They Could "Get Away With It." Here's Why That Should Scare You. 

Not long ago, a loan officer said something to me that I haven't been able to shake.

We were talking about the rules that govern our industry, and he leaned back and said, "We're a small fish in a big pond. They're not coming after us. And besides, the CFPB basically doesn't exist anymore, so we can get away with it."

I want you to sit with that for a second.

This is someone whose job is to help everyday people navigate one of the biggest financial decisions of their lives. And his operating philosophy is that because the federal watchdog is distracted, the rules don't apply to him.

He is wrong. But the fact that people like him exist in this industry means you need to know what to watch out for.

First, a little context without the jargon.

There are laws specifically designed to protect you when you buy or finance a home. Two of the most important ones are RESPA, which stands for the Real Estate Settlement Procedures Act, and fair lending laws under the Equal Credit Opportunity Act and the Fair Housing Act. You do not need to memorize any of those names. What you need to understand is what they are designed to prevent.

RESPA exists because of a simple problem: the people guiding you through a home purchase, your real estate agent, your loan officer, the title company, are often connected to each other in ways you cannot see. And sometimes, those connections involve money changing hands behind the scenes.

Think of it this way. Imagine you hire a financial advisor to help you pick the best investment for your retirement. Later you find out that the advisor was being paid a bonus every time they recommended one specific fund, regardless of whether it was actually the best choice for you. That would feel like a betrayal, right? That is exactly what RESPA is designed to prevent in the real estate world.

Fair lending laws exist to solve a different but equally serious problem. They say, plainly, that two people in similar financial situations must be treated the same way. It does not matter what they look like, where they are from, or anything else. If a loan officer charges one client an upfront fee and waives that same fee for someone else with a nearly identical financial profile, that is not just unfair. It is illegal.

So if these protections exist, what's the problem?

Here's the thing about the loan officer I mentioned: he was not worried about breaking the law because he assumed no one was watching. And for a while, there was some logic to that. The Consumer Financial Protection Bureau, the federal agency most responsible for enforcing these rules, has significantly scaled back its activity over the past year.

But what he missed, and what a lot of professionals in this industry are missing right now, is that state governments did not get the memo.

State attorneys general and state regulatory agencies have stepped directly into the gap. They are actively pursuing RESPA cases, fair lending violations, and referral fee schemes with the kind of energy you might expect from officials who are elected to protect the people in their states. A title company in Maryland recently found this out the hard way, settling a RESPA case with the state attorney general for one million dollars.

And it is not just small operators getting caught. Zillow, one of the most recognized names in real estate, is currently facing a class action lawsuit alleging that agents in its Premier Agent network pushed buyers toward Zillow's own mortgage product, even when better and cheaper options were available to those buyers. That case is still working through the courts, but it is a vivid example of exactly what these laws are meant to stop.

The "nobody is watching" era that some in this industry imagined? It never arrived.

What does this actually look like in real life?

This is where it gets personal, because these are not abstract legal violations. They show up in real transactions, with real people, and real money.

You might be sitting across from a loan officer who is steering you toward a specific title company not because they are the best option for you, but because that title company sends him referrals, or takes him to nice dinners, or has some other arrangement that benefits him personally. You would never know to ask. It would look like a normal recommendation.

Or you might be a first-time buyer who gets charged an upfront credit fee that your neighbor, who bought a house in the same neighborhood around the same time, never paid. No one explains the difference. You assume it is just how the process works.

Or your real estate agent might be part of a network where the agent, the lender, the title company, and even the home warranty provider are all connected financially, with each referral flowing through the same system and each professional collecting something from it. This is called an affiliated business arrangement, and it can be legal when disclosed properly. The problem is when it is not disclosed at all, and you are led to believe you are getting independent recommendations.

These situations cost you money. Sometimes a little. Sometimes a lot. And you often never find out.

Here is what to watch for.

You are being pushed toward specific vendors with no real explanation. It is completely normal for a professional to have preferred partners they trust. What is not normal is resistance when you ask why, or pressure to use someone without any discussion of your other options.

Fees appear that were not mentioned before. Your loan estimate should not be a surprise document. If fees show up that you did not know about, especially fees that seem inconsistent with what others have described, ask for a written explanation.

Relationships between your agent, lender, and settlement services feel unusually close. If your agent, your lender, and your title company all seem to be part of the same ecosystem, ask directly whether they have financial relationships with each other. Any ethical professional will tell you the truth. A disclosure is not a red flag. The absence of one is.

Your questions make someone uncomfortable. You are allowed to ask why. You are allowed to shop around. You are allowed to compare. A professional who gets defensive when you do any of those things is a professional worth reconsidering.

A word to my fellow professionals.

If you are a loan officer or real estate agent reading this, I want to be direct with you too. The idea that reduced federal enforcement equals reduced risk is a miscalculation. State enforcement is accelerating. Private lawsuits are rising. And attorneys who specialize in these cases have both the financial incentive and the legal tools to look backward, meaning that decisions made during the refinance boom of 2020 and 2021 are not necessarily in the rearview mirror.

The conversation I had with that loan officer bothered me not just because he was wrong about the legal risk. It bothered me because of what it revealed about how he sees the people sitting across from him. They are not partners in a transaction. They are an opportunity.

That is not why I do this work. And it should not be why anyone in this industry does it.

Your clients are trusting you with something enormous. Do right by them because it is the right thing to do, not because someone might be watching.

If you are working with someone in the mortgage or real estate space and something feels off, trust that instinct. Ask questions. Get a second opinion. Reach out to me directly, I am always happy to help you think through what you are seeing and whether it adds up.

Sources: National Mortgage News, "RESPA cases are rising as states fill CFPB void," April 6, 2026; Top Class Actions, "Homebuyers claim Zillow agents steered them away from more affordable mortgage options," December 2025; OCC Fair Lending Guidance; FDIC Fair Lending Laws and Regulations.