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Required Use - "Sham" Affiliated Business Arrangements |
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Written by CyberspaceLawyer.Net
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To ensure a free, competitive market in residential real estate, statutes (primarily the Real Estate Settlement Procedures Act ("RESPA"), 12 U.S.C. § 2607 et seq.) and regulations (such as 24 C.F.R. § 3500.15, concerning Affiliated Business Arrangements) seek to prevent tying arrangements, kickbacks, fee splitting, hidden fees, etc. Required use (as defined in 24 C.F.R. 3500.2(b)) means a situation in which a person must use a particular provider of a settlement service and pay their fee in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service. |
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Carter, et al. v. Welles-Bowen Realty, et al. |
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Written by CyberspaceLawyer
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This appeal involves the issue of whether an allegation that section 8 of the Real Estate Settlement Procedures Act of 1974 (“RESPA”), 12 U.S.C. § 2607, has been violated confers standing even if the consumer does not allege an above-market rate charge for services, i.e. an “overcharge.” The district court, in an opinion and order granting the Defendants-Appellees’ Motion to Dismiss, held Plaintiffs-Appellants lacked standing to bring a claim under § 2607 because they did not allege any overcharge or other concrete injury. See Carter v. Welles-Bowen Realty, Inc., 493 F. Supp. 2d 921, 927 (N.D. Ohio 2007) (“Carter I”). Appellants now appeal, arguing that this court should reject the district court’s “overcharge approach” to standing. For the reasons stated below, the court reverses the decision of the district court and remands the matter to the district court for further proceedings consistent with this opinion. |
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Florida Reissue Rate Class Actions |
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In November 2003, attorneys for Edward and Annette Hawley ("Plaintiffs") filed a lawsuit against American Pioneer Title Insurance Company ("American Pioneer") in Broward County, Florida, alleging that they were overcharged by a American Pioneer agent for a loan policy issued in connection with a refinance transaction. The lawsuit was titled Edward and Annette Hawly, individually and on behalf of all others similarly situated v. American Pioneer Title Insurance Company, Case Number 03-016234 (11). Plaintiffs sought certification of their lawsuit as a statewide class action. Lawsuits making similar allegations have been filed against every major title insurance underwriter in Florida. |
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Criticism strikes down “Flat Fee MLS” |
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Written by CyberspaceLawyer
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There appears to be a growing movement within the flat-fee MLS marketplace that businesses selling "flat fee MLS online services" do not need to obtain the requisite licenses in order to comply with applicable state brokerage licensing laws. For a listing broker, flat-fee MLS has become a giveaway business that, at best, should only be used to capture additional revenue from alternative sources. So, why can’t this popular segment within the real estate industry generate enough in profit margins to sustain itself? The answer is quite clear: unfair methods of competition, resulting from unlicensed activity. This inappropriate intrusion into a regulated industry operates to the detriment of legitimate licensees, many of whom have become insolvent due to unlicensed activity. The extent of the damages to the industry is unknown. One could easily argue, however, that this behavior makes entry into the market place more difficult and has had a profound effect on sustainability. |
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HUD’s final rule withdraws the new proposed definition of "required use" |
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SUMMARY: This final rule withdraws the revisions to the definition of ‘‘required use’’ as provided in HUD’s November 17, 2008, final rule amending its Real Estate Settlement Procedures Act (RESPA) regulations. The November 17, 2008, final rule, in part, revised the existing definition of ‘‘required use,’’ for the purpose of enhancing protections for consumers from deceptive mortgage practices that result from certain affiliated business transactions. The revised definition of ‘‘required use’’ had been scheduled to become effective on January 16, 2009. On January 15, 2009, and March 10, 2009, HUD published final rules delaying the effective date of the definition of ‘‘required use.’’ The March 10, 2009, final rule provides for an effective date of July 16, 2009. The March 10, 2009, rule also solicited comment on whether HUD should withdraw the revised definition of ‘‘required use’’ and, if so, whether HUD should initiate new rulemaking on the subject. |
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