Freeman v. Quicken Loans, Inc.
October 11, 2011
Case #: 10-1042
626 F.3d 799 (5th Cir. 2010)
Full Text Opinion: http://www.ca5.uscourts.gov/opinions/pub/09/09-30902-CV0.wpd.pdf
Civil Law: Whether § 8(b) of the Real Estate Settlement Procedures Act (RESPA) prohibits a real estate settlement services provider from charging an unearned fee only if the fee is divided between two or more parties.The Freemans, Bennets, and Smiths (collectively Petitioners) each obtained mortgages for the purchase of residential property from Quicken Loans. Quicken charged the Petitioners a loan discount fee at closing, however no loan discount was actually given. Petitioners filed suit alleging that Quicken violated RESPA by imposing an unearned fee.
The district court acknowledged the split in decisions on cases such as this and found that RESPA § 8(b) only applied to divided fees in accord with decisions made by the Fourth, Seventh, and Eight Circuits. The Fifth Circuit Court of Appeals affirmed reiterating the holding that §8(b) requires two culpable parties, a giver and receiver of the unlawful fee, rendering mark-ups by a sole services provider not actionable. The Supreme Court granted certiorari to settle the question.