The U.S. Supreme Court today unanimously rejected the U.S. Department of Housing and Urban Development’s interpretation of Section 8(b) of the Real Estate Settlement Procedures Act.
HUD, in its Statement of Policy 2001-1, said Section 8(b) is violated when one settlement service provider marks up the cost of services performed or goods provided by another settlement service provider without providing additional actual, necessary, and distinct services, goods, or facilities to justify the additional charge.
In Freeman v. Quicken Loans Inc., Justice Antonin Scalia stated: “In our view [RESPA section 8(b)] unambiguously covers only a settlement-service provider’s splitting of a fee with one or more other persons; it cannot be understood to reach a single provider’s retention of an unearned fee.” Stay tuned for more from Ballard Spahr on the important decision, including analyses of the opinion and the likely reaction of regulators and plaintiffs’ attorneys.
