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» VISIT US ONLINE @ DSNEWS.COM 37 CFPB CHARGES STONEBRIDGE WITH RESPA VIOLATIONS e Consumer Financial Protection Bureau (CFPB) announced it is charging Parsippany, New Jersey-based Stonebridge Title Services Inc., with violating the Real Estate Settlement Procedures Act (RESPA) by offering kickbacks for business referrals. In a consent order, the CFPB ordered Stonebridge to pay a civil penalty of $30,000. "Kickbacks drive up the costs of getting a mortgage and put law-abiding companies at a disadvantage," said CFPB director Richard Cordray with the release of the consent order. After being tipped off by the Department of Housing and Urban Development, the CFPB investigated Stonebridge's business practices and found it violated RESPA by paying commissions to third parties in exchange for title business referrals. RESPA permits commissions for business referrals only if the referrer is an employee of the company. However, the CFPB deter- mined Stonebridge was offering commis- sions to independent contractors who were "not bona fide employees," according to the CFPB. According to the consent order, "Begin- ning in at least 2008 and continuing until at least 2013, Stonebridge paid referral commis- sions of up to 40 percent of the title insurance premiums they received from consumers to independent salespeople for the referral of title insurance work to Stonebridge." e independent salespeople did receive W-2 tax forms for their income through Stonebridge, but the CFPB determined Stonebridge's actions were still illegal because the individuals were not company employees. "e Consumer Bureau will continue to take action against companies that seek to attract consumers through illegal schemes," Cordray said. IS UNEMPLOYMENT STIFLING THE HOUSING MARKET? e unemployment rate was unchanged in May, staying put at 6.3 percent with 9.8 million Americans unemployed—the lowest number since September 2008. However, RealtyTrac's Octavio Nuiry makes the case that there is more to unemployment than percentage and that a hidden actor is depressing housing market growth and could cause more problems in the future. Nuiry cites figures from the Bureau of Labor Statistics (BLS) that reported 92 million Ameri- cans remain out of the labor force. "A whopping 920,090 people dropped out of the labor force in May, according to the data. What's alarming about these numbers is that each month, nearly 1 million Americans had given up on even looking for a job, wiping out January and February gains and a bit of March's job growth too," Nuiry wrote. e Bureau of Labor Statistics measures unemployment in a very specific way, with necessary conditions that must be met before a person is considered "unemployed." e BLS definition of "unemployed" is as follows: "People are classified as unemployed if they do not have a job, have actively looked for work in the prior four weeks, and are currently available for work." e functional word from the BLS is "active." Passive activities, such as cruising the internet job boards or attending job training, don't count, leaving many who that the average person would consider unemployed as not "unemployed enough" to count toward BLS statistics. ese workers—those out of the job market and not looking for work—are the ones who concern Nuiry. He notes that declining unem- ployment figures don't point to a rebounding economy; rather, they point to workers who have given up looking, further shrinking the labor force and thus unemployment numbers. "When President Obama took office in Janu- ary 2009, the labor force participation rate—the share of the population that is working or looking for work—was 66 percent. In May 2014, that number hit a record-low 62.8 percent—the lowest since 1978," Nuiry wrote. With fewer people working, economic rami- fications ripple across the economy, especially in the housing market. e U.S. currently has 92 million men and women over the age of 16 who are not working—an all-time high. is is a siz- able population who won't be purchasing a home any time soon. Nuiry warned, "is is an employment crisis we have not seen in 30 years. With total employ- ment at 145.8 million, for every three Americans over age 16 earning a paycheck, there are two who aren't even looking for a job … And adding 200,000 jobs a month while 1 million workers leave the job market is not a formula for healthy housing market." The 2014 budget of the Federal Reserve. Source: FederalReserve.gov STAT INSIGHT $3.8 Billion

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