The Supreme Court issued its opinion in Freeman v. Quicken Loans, which presented the question whether a consumer can sue under the Real Estate Settlement Procedures Act (RESPA) for unearned fees linked with real-estate settlement services, or whether the consumer may only sue if the fee is divided between two or more persons. The case involved a “loan discount” fee for a discount that was never provided, and the crux of the case was whether RESPA reached such unearned fees or whether it is limited to fees that are split like kickbacks.
A unanimous Supreme Court held that when RESPA states that â€ś[n]o 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 . . . other than for serÂvices actually performedâ€ť, 12 U. S. C. Â§2607(b), it did not cover the facts in Freeman because the allegedly unearned fees were not split with another party.
This decision comes as many are still eagerly awaiting the Supreme Courtâ€™s ruling in First American Financial v. Edwards.Â Edwards focuses on statutory standing under RESPA, i.e. whether under RESPA, which allows homebuyers to sue banks and title companies when they pay kickbacks for the closing of a mortgage loan, lawsuits are constitutional if the kickback does not affect the price or quality of the services provided.Â While limited in scope to RESPA, the language the Supreme Court uses could significantly impact how state courts analyze all statutory standing issues.