The real estate website giant Zillow is in hot water with the federal government over alleged violations of anti-kickback and deceptive practice rules.

The consumer financial protection Bureau recently concluded a two-year investigation into Zillow's comarketing arrangements. This allows mortgage lenders to pay for portions of agents monthly advertising costs on the website. In exchange for the money, lenders are presented in agents adds to save visitors as sources of financing or finding a home loan. This could ultimately generate leads and new mortgage business. Most consumers don't understand the lender's financial relationship with the agent unless they truly understand the connection.

The consumer financial protection Bureau says the allegations involve the real estate settlement procedures act, which prohibits kickbacks in exchange for business referrals. This could be seen as unfair or deceptive practices.

However, Zillow stands behind their program stating that it is lawful and allowed.
Thousands of agents across the country pay Zillow for leads and premier agents Pay for Local Contact Information. These fees can sometimes add up to be well over $1000 per agent. This has led to nearly $190 million during the second 1:45 thousand 17 alone. It's more than 70% of those total revenue during this quarter.

The real question here is whether the lenders are loan officers are paying for referrals of business, which is banned by RESPA, or whether they are simply jointly advertising alongside another agent, paying their fair share for exposure.

Many agents think this antikickback case against Zillow is confusing because individual loan officers and agents appear to be the direct participants in the payment arrangements. Many people say it might be the perfect way to pay for referrals but some still feel uncomfortable about the situation. Right now, only the lawyers at Zillow and the protection agency know whether this case is destined for litigation or settlement. [Source]