Freeman oral arguments provide potential clarity to major RESPA dispute

Freeman oral arguments provide potential clarity to major RESPA dispute
March 12, 2012
The Legal Description

Francis X. "Trip" Riley, III, a partner and chair of the Consumer Financial Services Practice, is quoted in this article about the U.S. Supreme Court hearing oral arguments in Tammy Foret Freeman, et vir. v. Quicken Loans Inc. on February 21, 2012. The nation’s highest court is being asked to rule on 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.

Trip said he felt the analysis of whether or not Section B is superfluous, depending on the way Section A is interpreted, court cut against Quicken’s position.

“It could be simply academic and may not matter which way they come out,” Trip said of the Court’s eventual decision. “Because if the Court determines that RESPA requires a split, that will not prevent a plaintiff from saying, “You charged me for something you didn’t earn; you didn’t provide any services and you told me you did, and, consequently, I’m going to bring an unfair commercial practices act claim against you. And I can wait five years in some instances to do so. Consequently, in terms of risk management, everyone would still have to make sure they are charging fees only for services actually rendered and not using any of the money for kickbacks.”