For the past several years, Prospect Mortgage, LLC, has weathered a blast furnace of regulatory heat due to its aggressive marketing efforts, which some have called kickbacks. Last week, the company entered into a consent order with the Consumer Financial Protection Bureau that serves as a useful guide for other real estate businesses.
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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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Several clients of a prominent Ohio real estate brokerage, who claimed they were cheated by having to pay both a percentage-based commission and a $225 administrative fee, recently lost their effort to certify a class action. The ruling offers other real estate businesses valuable guidance about avoiding potential class liability.
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Last week, in a much anticipated decision, the U.S. Supreme Court addressed whether a consumer can sue over violations of statutory rights without herself having suffered an actual, concrete harm. The Supreme Court said “no,” but gave little detail about which injuries are concrete enough to pass constitutional muster. That lingering uncertainty is likely to help at least some companies defeat class certification.
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