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FREEMAN v. QUICKEN LOANS, INC.

Docket No.: 10-1042
Certiorari Granted: 10/11/11
Argued: February 21, 2012
Decided: 05/24/12

Topics:

Consumer Protection, Natural Resources, Truth in Lending, disparate impact, preemption

PartyNames: Tammy Foret Freeman, et al. v. Quicken Loans, Inc.
Petitioner: Tammy Foret Freeman, et al.
Respondent: Quicken Loans, Inc.

Court Below: United States Court of Appeals for the Fifth Circuit
Citation: 626 F.3d 799

Tammy Foret Freeman, et al.
v.
Quicken Loans, Inc.
Background:

Section 8(b) of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2607(b), provides: No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed. In this case, the Fifth Circuit joined the Fourth, Seventh, and Eighth Circuits in ruling that this provision prohibits the acceptance of unearned fees only when those fees are divided with a culpable third party, as in a kickback arrangement. It acknowledged, however, that the Third, Second, and Eleventh Circuits, as well as the Department of Housing and Urban Development, have taken the contrary view that the provision also applies to unearned fees retained by a single defendant.

Question Presented:

Whether Section 8(b) of RESPA prohibits a real estate settlement services provider from charging an unearned fee only if the fee is divided between two or more parties.

Question:

Does Section 8(b) of the Real Estate Settlement Procedures Act prohibit a real estate settlement services provider from charging an unearned fee only if the fee is divided between two or more parties?

Note:

Section 8(b) of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2607(b), provides: No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed. In this case, the Fifth Circuit joined the Fourth, Seventh, and Eighth Circuits in ruling that this provision prohibits the acceptance of unearned fees only when those fees are divided with a culpable third party, as in a kickback arrangement. It acknowledged, however, that the Third, Second, and Eleventh Circuits, as well as the Department of Housing and Urban Development, have taken the contrary view that the provision also applies to unearned fees retained by a single defendant.

FREEMAN v. QUICKEN LOANS, INC.
ORAL ARGUMENT

02/21/12

Listen to Oral Argument in FREEMAN v. QUICKEN LOANS, INC.
Holding: AFFIRMED
Opinion By:
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