The infamous marketing arrangement run by Genuine Title, LLC, a now-defunct title company from Maryland, has ended up where we all expected: in a certified class action. All the lender defendants except one settled the lawsuits against them. The lone holdout, West Town Bank & Trust, ignored a few critical defenses and learned its lesson the hard way.
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The impact of a long-awaited court ruling involving PHH Corporation is still reverberating throughout the real estate industry. The decision could radically change the way the Consumer Financial Protection Bureau (CFPB) enforces the Real Estate Settlement Procedures Act (RESPA). Because the opinion is so potentially far reaching, we will discuss it in two separate posts. In this first one, we will consider what it means for the CFPB to be unconstitutional.
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No real estate business wants to get sued in a class action or pay the associated legal costs, which can be hefty. The question often arises then: Will my company’s errors-and-omissions insurance protect me if we are hit with a class action? The answer is “maybe,” and, in any event, your insurer will almost certainly fight you over the matter. So prepare yourself for a protracted legal fight against a determined adversary. The good news is that, sometimes, insureds can and do win these battles.
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Class actions involving the Telephone Consumer Protection Act of 1991 (TCPA) are nothing new. What is new is that they recently hit the real estate industry. Worse yet, insurance companies have grown increasingly savvy in excluding coverage for those types of lawsuits. Nonetheless, a smart company might be able to bargain away its questionable insurance rights in exchange for settling a TCPA class action.
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The most critical part of any class-action defense is often the narrative. That is because a judge who believes that consumers have been cheated will often permit a class action to go forward, even if the case is otherwise questionable. Nowhere is that tendency more evident than in the wave of lender-placed insurance (“LPI”) lawsuits currently sweeping the country.
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