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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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FREEMAN v. QUICKEN LOANS, INC.
Case Documents

1FREEMAN v. QUICKEN LOANS, INC. Oral Argument Audio (February 21, 2012)
2FREEMAN v. QUICKEN LOANS, INC. Oral Argument Transcript (HTML)
3Opinion in FREEMAN v. QUICKEN LOANS, INC.
4FREEMAN v. QUICKEN LOANS, INC. Oral Argument Transcript (PDF)
5FREEMAN v. QUICKEN LOANS, INC. Oral Argument Audio
6BRIEF FOR PETITIONER
7BRIEF FOR THE STATES OF CALIFORNIA, ALASKA, ARIZONA, CONNECTICUT, GEORGIA, HAWAII, IDAHO, ILLINOIS, IOWA, MAINE, MONTANA, NEVADA, NEW HAMPSHIRE, NEW MEXICO, OHIO, RHODE ISLAND, TENNESSEE, WASHINGTON, WEST VIRGINIA, AND WYOMING AND THE DISTRICT OF COLUMBIA AS AMICI CURIAE IN SUPPORT OF PETITIONERS
8BRIEF FOR THE UNITED STATES AS AMICUS CURIAE
9REPLY BRIEF FOR PETITIONERS
10BRIEF FOR RESPONDENT
11BRIEF OF AMERICAN ESCROW ASSOCIATION, AMERICAN LAND TITLE ASSOCIATION, LEADING REAL ESTATE COMPANIES OF THE WORLD, THE REALTY ALLIANCE AND REAL ESTATE SERVICES PROVIDERS COUNCIL, INC. (RESPRO) AS AMICI CURIAE IN SUPPORT OF RESPONDENTS
12BRIEF OF NATIONAL ASSOCIATION OF REALTORS AS AMICUS CURIAE IN SUPPORT OF RESPONDENT
13BRIEF FOR AMERICAN BANKERS ASSOCIATION, AMERICAN FINANCIAL SERVICES ASSOCIATION, CONSUMER BANKERS ASSOCIATION, CONSUMER MORTGAGE COALITION, THE HOUSING POLICY COUNCIL OF THE FINANCIAL SERVICES ROUNDTABLE, INDEPENDENT COMMUNITY BANKERS OF AMERICA, AND MORTGAGE BANKERS ASSOCIATION AS AMICI CURIAE IN SUPPORT OF RESPONDENT