The Department of Housing and Urban Development (HUD) has reported that First Magnus Financial Corp, an Arizona mortgage lender, broke the anti-kickback regulations of the Real Estate Settlement Procedures Act (RESPA). They made payments through marketing agreements with brokers and builders that were linked to loans that had been generated for the company. The company paid a mix of $856,000 in marketing fees, bonuses, and supposed non competition fees to other brokers, builders (TJ Bednar Homes, Santa Anna Homes), and brokerages (Long Realty Co., Realty Executives) that earmarked almost $1 billion in business for First Magnus.

Realty Executives Southern Arizona responded to the allegations, saying that they review all agreements made to ensure they are in accordance with the law. They also said that agents and consumers are knowledgeable "of all of our corporate relationships through our affiliated business disclosure,". They also stated that they did not know about HUD´s report until reading it in the paper, and that their agents work with many lenders and the borrower always gets to make the final decision when picking a lender.

HUD remarked on the alleged undying agreements between First Magnus and the above companies, saying that "As a result of theses competition-limiting agreements, uninformed borrowers were directed to First Magnus when better FHA mortgage terms may have been available from other lenders,...This practice is a violation of RESPA's prohibition of referral fees in exchange for FHA mortgage business."

First Magnus had closed last year, following bankruptcy and the suspension of their license by the Arizona Dept. of Financial Institutions.