Oral argument: Feb. 21, 2012
Appealed from: United States Court of Appeals for the Fifth Circuit (Nov. 17, 2010)
REAL ESTATE SETTLEMENT PROCEDURES ACT, SETTLEMENT SERVICES, KICKBACKS, REFERRAL
Quicken Loans charged three couples with mortgage discount fees that were allegedly unearned. One couple, the Freemans, initiated a civil action under Section 2607(b) of the Real Estate Procedures Act of 1974 (“RESPA”), claiming that RESPA prohibits a settlement services provider from charging any unearned fees. The district court dismissed the suit, holding that Section 2607(b) only applies to fees split with another culpable party. The Fifth Circuit affirmed. Now, after consolidating their case with the other couples’ claims, the Freemans argue that the Fifth Circuit’s decision should be overturned because the intent of RESPA was to proscribe all unearned fees, including fees charged by settlement service providers acting unilaterally. Quicken Loans counters that Congress intended to restrict only split fees, protecting consumers such as the Freemans through extensive disclosure requirements. The Supreme Court’s decision will clarify the judicial interpretation of Section 2607(b) and determine which fees RESPA forbids.