RESPA Anti-Kickback Section Inapplicable To Fees That Aren’t Split Between Parties

The Real Estate Settlement Procedures Act provision that prohibits lenders from charging borrowers “unearned, undivided” fees at their mortgage closings does not apply to fees that are not split with another party, the U.S. Court of Appeals for the Fifth Circuit held Nov. 17 (Freeman v. Quicken Loans Inc.).

The loan discount, origination, and processing fees that Quicken Loans Inc. charged mortgage customers therefore did not violate Section 8(b) of RESPA, Chief Judge Edith H. Jones explained for the court. The holding opened up a split with the Second Circuit.

The plaintiffs were three couples who obtained mortgages ...