Many real estate businesses accused of violating the Real Estate Settlement Procedures Act have invoked the statute’s exemptions for “services actually performed.” But the Consumer Financial Protection Bureau has long rejected those efforts, reading the exemptions as narrowly as possible. The bureau’s hardballing continued last week, when it penalized an Indiana title company for its shared ownership interests with an affiliated title insurer. Continue Reading CFPB Continues Its War Against RESPA Safe-Harbors
The real estate industry, being rooted in practices developed over generations, is slow to change. In today’s business climate, inflexibility can prove disastrous. But, last month, the South Carolina Supreme Court moved its real estate industry toward modernity by endorsing a national lender’s internet-refinancing process, which the court found satisfies the state’s existing requirements for attorney involvement. Continue Reading Internet Refinancings Take Critical Step Forward
Last week, the Colorado Insurance Commissioner did directly what the Consumer Financial Protection Bureau (CFPB) has been doing indirectly for over two years: he outlawed marketing services agreements (MSAs). Very narrow opportunities for collaborative marketing remain; other states may follow suit. Continue Reading Colorado Slams Door on MSAs
Rank-and-file employees in the real estate industry are normally—and understandably—loathe to add yet another form to the flood of documents parties already face at closing. But, once in a while, a lawyer’s insistence on using a new disclosure will pay off and a previously unwelcome paper will successfully ward off a massive legal attack. As the result of a recent court ruling, M&T Bank Corp. finds itself in that very position, thanking its forward-thinking attorneys. Continue Reading Disclosure Form Thwarts Lawsuit Over Alleged RESPA Violation
The results of a recent poll, commissioned by the National Association of Realtors (NAR), show that not only have real estate consumers grown comfortable with affiliated business arrangements but also that lots of clients prefer them. That might encourage doubting real estate companies to rethink their current stances about those sorts of arrangements. Continue Reading Interest in One-Stop Shopping Grows
Prospect Mortgage LLC, a nonbank lender headquartered in Sherman Oaks, California, and the Multi-State Mortgage Committee (MMC), a representative body of state mortgage regulators representing the examination interests of combined states relating to lenders operating in multiple states, announced a $10.1 million settlement between Prospect and 50 state mortgage regulators. Continue Reading Prospect Mortgage Forfeits $10.1 Million to Resolve Dispute Over Undisclosed Fees
Last month, RealtySouth, an Alabama brokerage and subsidiary of HomeServices of America, Inc., defeated claims that it violated the Real Estate Settlement Procedures Act (RESPA). RealtySouth supposedly pays incentive fees to its brokers who steer business to its affiliated title company, TitleSouth. Whether this represents a lawful means of encouraging referrals among related entities remains to be seen. At the very least, affiliated real estate companies should be aware of the decision.