Quicken Loans Mortgage Fees

Last weekend, in an important victory for the mortgage credit sector, the United States Supreme Court decided by unanimous vote that the ban on the Real Estate Settlement Procedures Act ("RESPA") to allocate fees required at least two or more individuals to meet the legal requirements of Section 8(b), 12 U.S.C. § 2607(b).

Quicken Loans, Inc. No. 10-1042, May 24, 2012, the court found that the legal terminology was clear and unequivocal and dismissed the attempts of HUD and the United States to develop a more comprehensive concept of accountability. HUD has for some period been arguing, as stated in its statement on Directive 2001-1, that a sole billing operator can breach this RESPA ban on charging split fees by merely inflating a debtor for billing even if there is no other third parties with whom that operator divides or buys part of the fees.

The HUD policy statement provided that Section 2607(b) could be infringed by a sole supplier under one of the following scenarios: 1. when it records the costs of providing a service or goods provided by another individual without providing separate extra service to warrant the extra payment, or 2. when it bills a customer for no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, no work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, work, for work, dup work, work, work, work, work, work, work, work, work, from rendered, work, from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from from.

Jurisdictions had agreed on the first of the two scenario, with some jurisdictions accepting HUD's opinion while others had not. But even HUD's approaches, where "fee sharing" could affect only one of the parties, were not consistent with HUD's attempt to use Section 2607(b) for overcharging or overload.

Using HUD's statement of principle to substantiate their point of view, the applicants took the opinion that it was not necessary to allocate the charge between individuals in order to find an infringement. Plaintiffs claimed that the HUD's design should be taken into account in its Statement of Principles, as it was the national authority entrusted with the design of RESPA and the adoption and implementation of its rules - a task which now comes within the competence of the CFPB.

However, the Court found that respect for HUD's view was inappropriate in its policy statement, as HUD's interpretations went beyond the legal scope of RESPA to govern the mortgage sector in a way that went beyond what Congress had decided. Overall, the Court's ruling confirmed that, notwithstanding the wide range of regulators that the HUD (or CFPB) has been given, this regulator may not overstep (or alter) the legal authorities and languages of the laws to be governed.

As well as benefiting creditors in RESPA cases, this ruling also benefits other disputes relating to FSAP in which regulatory authorities have extended their demands or obligations "beyond the scope that the Act can carry", and in all disputes in which FSAPs attempt to enforce and implement the simple legal terminology as it stands, rather than as a regulatory authority would otherwise have liked or formulated.

Against this background, and in particular in the light of the unanimity of the decision, one can only wonder whether this court, in the context of Fair Lending, held a similarly gloomy conception of "disparate - impact" discriminatory treatment in the Magner case, which had been informed and reasoned, but was eventually rejected by the City of St Paul before a reasoned ruling.

Considering the court's readiness to restrict appeals and implement the Act, as documented in writing in Quicken Loans, Inc.