Lawsuit claims Planet Financial 'funneled money' to loan officers
A whistleblower lawsuit filed against Planet Financial LLC claims the Maitland mortgage lender paid loan officers twice through Home Team Equity, LLC or HTE, a marketing company owned by an executive in Planet Financial's Maitland office.
Christopher Castoro, a former vice president with Planet who filed the legal action against Planet Financial, told News 6 there is a paper trail that will raise questions about fees, overtime and accounting, some of which will prove the company inflated FHA interest rates.
“This fee was on every single solitary loan that they closed,” Castoro said. “I can’t count how many people didn’t qualify for the home of their dreams because they had that additional margin built in.”
The lawsuit, filed Sept. 5, does not include the FHA loan allegations but does present the alleged payment, scheme, which according to the lawsuit, was built on the “practice of paying additional commissions to loan officers.”
According to the lawsuit, the extra payments “were not reported, revealed, or otherwise made available or discernable (sic) to the Consumer Financial Protection Bureau (“CFPB”) which, in turn, violated laws, rules, and regulations dealing with loan originator compensation.”
Castoro said he believes the alleged scheme was part of the company’s regular practice and estimates at least $120 million in FHA loans may be effected.
“I believe when the forensics accountants get in, there’s going to be a whole bunch of explaining to do,” Castoro said.
Planet Financial has been operating for about seven years in Florida, with offices in Maitland, Orlando, Jacksonville, Gainesville and Tampa.
Castoro, who was based in the company’s Maitland office for a about a year, was fired in March.
According to the lawsuit, he was dismissed after he refused to “go along” with the financial arrangement.
His attorney, Travis R. Hollifield of Hollifield Legal Centre in Winter Park, said he has never “seen another case like it" in more than 28 years of practicing law.
“Many of these practices probably have been going on as long as the company has been in existence,” Hollifield said.
Castor said he discovered the payment system by accident.
According to the lawsuit, Planet “funneled money through Home Team Equity, LLC ('HTE') which in turn," “improperly kicked back monies as additional prohibited compensation (based in part on loan production) to loan officers” employed by Planet.
The company’s attorney, Paul Ranis, denies the loan allegations.
In a statement to News 6, Ranis said: “Planet Financial believes the allegations to be false and completely without merit”
Hollifield said it will take months for the case to go to court.
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