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A. Cases

  • Commonwealth Land Title Ins. Co. 20 Commonwealth Land Title was an enforcement action by the Indiana insurance commissioner against a title insurer. The commissioner concluded that the insurer violated state insurance statutes by charging excessive rates and unfairly discriminated in setting premiums, because premium rates were determined by individual insurance agents and were not specifically tied to risk involved. The
    commissioner also concluded that the insurer failed to comply with RESPA disclosure requirements for the HUD-1 statement. The appellate court affirmed the commissioner’s finding of liability and its order to take curative action.
  • Henson. 21 A federal district court in California permitted a RESPA § 8 claim to go forward. Section 8 prohibits kickbacks and fee-splitting. The plaintiffs alleged that certain “marketing fees” from overnight express delivery services to a subsidiary of the title defendant were in fact an illegal fee split. The payments varied based on the volume of business referred. The defendants argued that the express services were not in the real-estate business and thus RESPA and Regulation X did not apply. After ruling that one of the plaintiffs’ claims was not barred by the statute of limitations, the district court concluded that the term “settlement service” as used in Regulation X included overnight delivery service. It noted that Congress had not provided an exemption in RESPA for overnight delivery services, and asserted that courts should not add one on their own. The defendants also argued that the fees were not “unearned” because a service was in fact provided. The district court granted the defendants’ summary judgment on plaintiffs’ allegations relating to unearned fees, but denied summary judgment on the fee split.
  • Menichino. 22 In Menichino, the plaintiffs filed Kickback claims after the one-year filing deadline. The complaint alleged that the mortgage insurer reinsured the risk through a subsidiary of the lender; that is, the risk the mortgage insurer was taking from the lender was insured by the lender’s own insurance subsidiary, such that the risk of loss was passed back to the lender through its subsidiary. The plaintiffs contended that the reinsurance premiums from the mortgage insurer to the lender’s subsidiary were actually kickbacks for a steady stream of referrals. Because the plaintiffs’ complaint set forth facts explaining why they failed to file on time, the court allowed the case to go forward under the doctrine of equitable tolling.
  • Baehr. 23 Equitable tolling of the statute of limitations was also addressed in Baehr. The plaintiffs sued several defendants, including a national real-estate broker and one of its local agencies, alleging a kickback scheme for title-insurance referrals amounting to $500,000 over a thirteen-year period. The claim against the national broker was dismissed because it did not participate in the scheme and could not be held vicariously liable for the local agency’s conduct. The local agency also sought dismissal of the case, but the district court denied the motion, concluding that the plaintiffs had set forth sufficient facts in their complaint to excuse the failure to file within one year of the settlement.
  • Prudential Locations. 24 After people complained to the Department of Housing and Urban Development about Prudential Location’s real-estate settlement practices, Prudential Location made a Freedom of Information Act (FOIA) request to compel HUD to produce information about the people who made complaints, including their names. HUD contended it could redact identifying information from documents being produced  pursuant to a privacy exemption in FOIA. The federal district court agreed, but a three- judge panel the United States Court of Appeals for the Ninth Circuit reversed. HUD sought a rehearing before the entire panel of appellate judges. The panel concluded that requiring disclosure of the identifying information was an “unwarranted invasion of privacy” under the FOIA exemption and reinstated the district court’s summary judgment for HUD.

B. Statues and Regualtions

  • No statutes or regulations addressing RESPA issues were retrieved.

C. Volume of Materials Retreived

  • RESPA issues were identified eleven times in nine cases. (See Table 1.) (Some cases addressed more than one RESPA issue.) The research focused on claims arising as a result of the settlement process, not claims that arise in the context of foreclosure. Most cases addressed Kickback issues. (See  Table 2.) No statutes or regulations addressing RESPA issues were retrieved.25

20 Commonwealth Land Title Ins. Co. v. Robertson, 5 N.E.3d 394 (Ind. Ct. App. 2014).

21 Henson v. Fidelity Nat’l Fin. Inc., No. 2:14-cv-01240-ODW(RZx), 2014 WL 1246222 (C.D. Cal. Mar. 21, 2014).

22 Menichino v. Citibank, No. 2:12-cv-00058, 2014 WL 462622 (W.D. Pa. Feb. 5, 2014). See also Manners v. Fifth Third Bank, No. 2:12-cv-00442, 2014 WL 465701 (W.D. Pa. Feb. 5, 2014) (similar case); Cunningham v. M&T Bank Corp., No. 1:12-cv-1238, 2014 WL 131652 (M.D. Pa. Jan. 14, 2014) (case alleged reinsurance scheme in exchange for referrals and plaintiffs asserted their claims should proceed even if they were filed late; court denied defendants’ request for stay while case raising same issue was on appeal).

23 Baehr v. Creig Northrop Team, P.C., No. WDQ-13-0933, 2014 WL 346635 (D. Md. Jan. 29, 2014).

24 Prudential Locations LLC v. U.S. Dep’t of Hous. & Urb. Dev., 739 F.3d 424 (9th Cir. 2013).

25 See note 10, above, for information regarding the coverage of this update.