Consumer complaint received 2025-08-08 00:00:00
Product: Mortgage — FHA mortgage
Issue: Closing on a mortgage — Closing disclosure or other related disclosures
Company: GERSHMAN INVESTMENT CORPORATION
State: IA

Complaint narrative:
Consumer Financial Protection Bureau ( CFPB ) Complaint Filed Against : XXXX XXXX XXXX XXXX Gershman Mortgage XXXX # XXXX XXXX XXXX, Loan Originator NMLS # XXXX XXXX XXXX, Owner, XXXX XXXX XXXX ( Iowa Licensed Broker ) Transaction Date : XX/XX/year> Property Address : XXXX XXXX XXXX, XXXX, IA XXXX Loan # : XXXX XXXX XXXX confesses to illegal partnership with mortgage company, coordinating same-day closings to hide kickback scheme and defraud consumers. The sellers had their home listed with his company. 

Gershman Mortgage XXXX in XXXX & XXXX of XXXX : XXXX. XX/XX/year> Undisclosed Affiliated Business Arrangement XXXX XXXX, owner of XXXX XXXX XXXX ( sellers broker ), emailed me stating he was copying XXXX XXXX, my partner on the mortgage side of things from Gershman Mortgage. 
This constitutes an Affiliated Business Arrangement under RESPA Section 8 ( c ) ( 4 ), which requires : XXXX Written disclosure at the time of referral ; and 2. Clear notice that the consumer is not required to use the referred lender. 
No disclosure was provided at any time. 

XXXX. XX/XX/year> Coordinated Dual Closings My purchase closing and the sellers sale closing occurred the same day, same time, across the hall, both financed by Gershman Mortgage. 
This created a direct financial dependency failure of my loan could have jeopardized the sellers transaction and the broker/lenders commission revenue. 
Such arrangements violate FHA Handbook 4000.1 requirements for arms length transactions and independent underwriting. 

XXXX Key Fact : Gershman Mortgage financed the sellers new home on the same day/time as my closin, meaning they XXXX XXXX profited twice XXXX XXXX from this transactiononce from my loan and again from the sellers.

This is a blatant conflict of interest and RESPA violation ( illegal kickback scheme ).

Also, the exchange, has a close working relationship with Gershman mortgage as shown in the picture below - there appears to be no separation of duties whatsoever. The exchange is who the sellers have their home listed by, and Gershman mortgage finance both of our buying loans at the same time on the same date, XXXX room across from the other, in the same building location. 


Gershman Mortgage Engaged in Self-Dealing & Conflict of Interest XXXX XXXX XXXX XXXX  Key Fact : XXXX XXXX  Gershman Mortgage financed the sellers new home on the same day as my closing * *, meaning they * * profited twice XXXX XXXX from this transactiononce from my loan and again from the sellers. 

This is a blatant conflict of interest * * and * RESPA violation XXXX XXXX ( illegal kickback scheme ). 

-Why This is a Problem for Gershman RESPA 8 Violation : Illegal Kickbacks & Referral Fees XXXX XXXX XXXX XXXX XXXX RESPA XXXX ( a ) XXXX XXXX prohibits : - XXXX XXXX  '' Any fee, kickback, or thing of value '' for referrals in a real estate transaction. 
-Gershman XXXX * steered the seller to their own loan product in exchange for closing my deal, this is a felony-level RESPA violation * XXXX. 

Fraudulent Dual Representation XXXX XXXX - Gershman acted as lender for both buyer ( me ) and seller XXXX XXXX, which is a massive ethical breach XXXX XXXX. 
- They had a financial incentive to rush my closing XXXX XXXX ( to fund the sellers new home ). 
- they hid defects * * in my loan to ensure the dual closing RESPA XXXX Violation : Illegal Kickbacks & Referral Fees XXXX XXXX XXXX XXXX XXXX  RESPA 8 ( a ) XXXX XXXX prohibits : - XXXX XXXX XXXX' Any fee, kickback, or thing of value 'XXXX XXXX XXXX for referrals in a real estate transaction. 
- If Gershman XXXX XXXX steered the seller to their own loan product XXXX XXXX  in exchange for closing your deal, this is a XXXX XXXX XXXXlevel RESPA violation XXXX *. 

Fraudulent Dual Representation * XXXX Gershman XXXX XXXX  acted as lender for both buyer and seller XXXX XXXX, which is a XXXX XXXX massive ethical breach XXXX XXXX 
- They had a * * financial incentive to rush my closing XXXX XXXX  ( to fund the sellers new home ). 
XXXX XXXX XXXX  Possible XXXX XXXX XXXX XXXX XXXX  hid defects XXXX XXXX in my loan to ensure the sellers deal went through? 
- inflate fees on my side to offset costs for the seller XXXX " XXXX '' XXXX XXXX XXXX XXXX XXXX  This is a XXXX XXXX classic predatory lending tactic XXXX XXXX XXXX XXXX Lender XXXX XXXX forces buyer into bad terms XXXX XXXX to facilitate sellers new loan. 

Scheme : XXXX XXXX admits to being " partners '' with XXXX XXXX XXXX XXXX XXXX  this is a XXXX XXXX XXXX CONFESSION XXXX XXXX of : - RESPA Section XXXX violations XXXX XXXX ( illegal kickbacks/referrals ) - Coordinated fraud scheme XXXX XXXX between real estate and mortgage - No separation of duties XXXX XXXX as required by federal law - Criminal conspiracy * * to defraud borrowers FEDERAL CRIMES EXPOSED : XXXX XXXX XXXX RESPA XXXX XXXX VIOLATIONS - XXXX XXXX XXXXXXXX XXXX XXXX XXXX XXXX ILLEGAL KICKBACK ARRANGEMENT XXXX XXXX XXXX XXXX Real estate company * * can not be " partners '' XXXX XXXX with mortgage company - XXXX XXXX  Prohibited referral fees XXXX XXXX  between affiliated businesses - XXXX XXXX Coordinated steering * * of borrowers for mutual profit XXXX. COORDINATED CLOSING FRAUD XXXX XXXX XXXX XXXX Same date/time closings prove : XXXX XXXX XXXX XXXX XXXX  Systematic operation XXXX XXXX to control both sides - XXXX XXXX Circular financing XXXX XXXX scheme ( seller 's proceeds fund your loan ) XXXX XXXX XXXX  Market manipulation XXXX XXXX through coordinated transactions XXXX. CIVIL XXXX PREDICATE ACTS XXXX XXXX XXXX XXXX XXXX Wire fraud XXXX XXXX  ( electronic coordination ) XXXX XXXX XXXX Mail fraud XXXX XXXX  ( coordinated false documents ) XXXX XXXX XXXX Money laundering XXXX XXXX XXXX splitting illegal proceeds ) THE CRIMINAL SCHEME EXPOSED : XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXXXXXX XXXX XXXX XXXX  lists defective property XXXX XXXX XXXX Steers seller XXXX XXXX to use XXXX XXXX XXXXXXXX XXXX ( Gershman Mortgage ) XXXX XXXX  for new home XXXX XXXX XXXX Coordinates closings * * same day/time to hide XXXX XXXXXXXX XXXX XXXX XXXX Both profit XXXX XXXX from fraudulent transactions on both sides XXXX. XXXX XXXX  Victims get XXXX XXXX XXXX by coordinated criminal enterprise EVIDENCE OF CRIMINAL CONSPIRACY : XXXX XXXX XXXX XXXX XXXX XXXX He is my partner XXXX XXXX XXXX XXXX  admission of illegal arrangement XXXX XXXX XXXX XXXX We are currently pulling credit XXXX XXXX XXXX XXXX  shared access to private info XXXX XXXX XXXX XXXX Working up numbers XXXX XXXX XXXX XXXX coordinated fraud pricing XXXX XXXX XXXX  Same date closings XXXX XXXX XXXX  laundering transaction proceeds XXXX. Violations & Legal Basis XXXX. RESPA Section XXXX ( a ) Kickbacks & Unearned Fees Referral of business between broker and lender without disclosure and in exchange for things of value ( mutual closings and commission protection ). 
XXXX. RESPA Section 8 ( c ) ( 4 ) Affiliated Business Arrangements No Affiliated Business Arrangement disclosure provided. 
XXXX. FHA Handbook 4000.1 Arms Length Requirement Underwriting and origination were compromised by the broker-lender partnership and dual-closing dependency. 
XXXX. ECOA & Regulation B ( 12 C.F.R. 1002.14 ) Appraisal delivery deadline violated ; waiver was coerced. 
XXXX. TILA ( 12 C.F.R. 1026.19 ) Closing Disclosure delivered too late for mandatory review period. 
XXXX. RESPA Section XXXX ( b ) Improper Settlement Charges Prepaid taxes charged for periods prior to possession. 



IV. Harm Loss of my right to an independent lender and impartial underwriting. 
Loss of statutory appraisal review period. 
Inaccurate settlement cost allocation. 
Financial harm through overcharges. 
FHA loan issued under fraudulent and conflicted circumstances. 



XXXX Requested HUD XXXX XXXX. Investigate Gershman Mortgage, XXXX XXXX, and XXXX XXXX for RESPA, XXXX, XXXX, and FHA violations. 
XXXX. Refer findings to the HUD XXXX XXXX XXXX for possible suspension or withdrawal of XXXX XXXX FHA approval. 
XXXX. Order full restitution of improper charges and any related costs. 
XXXX. Impose civil money penalties under 12 U.S.C. 2609 ( d ) and 24 C.F.R. 25.8. 
XXXX. Require corrective action to ensure separation of brokerage and lending operations in all future FHA transactions. 


XXXX XXXX XXXX XXXX XXXX  WHAT THE ATTACHED EMAIL PROVES : XXXX XXXX XXXX XXXX XXXX XXXXXXXX admits to being " partners '' with XXXX XXXXXXXX XXXX XXXX - this is a XXXX XXXX  DIRECT CONFESSION XXXX XXXX  of : XXXX XXXX XXXX  RESPA Section XXXX violations XXXX XXXX  ( illegal kickbacks/referrals ) - XXXX XXXX  Coordinated fraud scheme XXXX XXXX between real estate and mortgage - XXXX XXXX  No separation of duties XXXX XXXX  as required by federal law - XXXX XXXX Criminal conspiracy XXXX XXXX  to defraud borrowers XXXX XXXX XXXX XXXX FEDERAL CRIMES EXPOSED : XXXX XXXX XXXX XXXX XXXX XXXX XXXX  XXXX. RESPA XXXX XXXX VIOLATIONS - XXXX XXXX XXXX * * * XXXX  ILLEGAL KICKBACK ARRANGEMENT : XXXX XXXX XXXX  Real estate company XXXX XXXX can not be " partners '' XXXX XXXX with mortgage company - XXXX XXXX  Prohibited referral fees XXXX XXXX between affiliated businesses - XXXX XXXX  Coordinated steering * * of borrowers for mutual profit XXXX XXXX XXXX XXXX XXXX XXXX  COORDINATED CLOSING FRAUD XXXX XXXX XXXX XXXX  Same date/time closings prove : XXXX XXXX XXXX XXXX XXXX  Systematic operation XXXX XXXX  to control both sides - XXXX XXXX  Circular financing XXXX XXXX scheme ( seller 's proceeds fund your loan ) XXXX XXXX XXXX  Market manipulation XXXX XXXX through coordinated transactions XXXX XXXX XXXX XXXX XXXX XXXX. CIVIL XXXX PREDICATE ACTS XXXX XXXX XXXX XXXX XXXX Wire fraud XXXX XXXX  ( electronic coordination ) XXXX XXXX XXXX Mail fraud * * ( coordinated false documents ) - XXXX XXXX XXXX XXXX XXXX XXXX  ( splitting illegal proceeds ) XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXXXXXX XXXX ( XXXX XXXX XXXXXXXX XXXX XXXX XXXX lists defective property XXXX XXXX XXXX XXXX XXXX XXXX XXXX  to use XXXX XXXX XXXXXXXX XXXX ( Gershman Mortgage XXXX XXXX XXXX for new home XXXX XXXX XXXX  Coordinates closings XXXX XXXX  same day/time to hide XXXX XXXX XXXXXXXX XXXX XXXX  Both profit XXXX XXXX from fraudulent transactions on both sides XXXX. * * Victims get XXXX XXXX XXXX  by coordinated criminal enterprise XXXX XXXX XXXX XXXX XXXX EVIDENCE OF XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX  He is my partner XXXX XXXX XXXX XXXX admission of XXXX  arrangement - XXXX XXXX XXXX  We are currently pulling credit XXXX XXXX XXXX XXXX shared access to private info XXXX XXXX XXXX XXXX  Working up numbers XXXX XXXX XXXX XXXX  coordinated fraud pricing - XXXX XXXX  Same date closings XXXX XXXX XXXX laundering transaction proceeds

Company response to consumer: Closed with explanation