| HUD Settles Four RESPA Claims
Anti-kickback and unearned fees provisions cited July 29, 2003 By MortgageDaily.com staff |
| Four industry-related businesses have agreed to settle claims alleging violations of the Real Estate Settlement and Procedures Act (RESPA), according to the The Department of Housing and Urban Development (HUD).
In a news release, HUD said that the companies allegedly violated Section 8 of RESPA, which “prohibits a person from giving or accepting anything of value in exchange for the referral of settlement service business. It also prohibits a person from giving or accepting any part of a charge for services that are not performed.” Coldwell Banker United and Coldwell Banker Richard Smith Realtors agreed to make a combined payment of $19,200 to the U.S. Treasury for accepting free online virtual tours from title companies in exchange for referral of business, HUD said. The two companies also agreed, according to HUD, to stop the practice and to notify agents to stop the practice, in that it violates RESPA. A Kingsport, Tennessee, based title insurance company, TitleVentures.com, agreed to shut down 36 affiliated title companies alleged to be shams, HUD said. The principal owner will pay $7,500 and will only conduct future business through title agencies that meet certain requirements, including earning at least 40 percent of revenues from other sources. A fourth company, World Savings Bank, was alleged to have paid real-estate agents up to $100 to fill out and submit online loan applications for borrowers, HUD said. The California-based lender will discontinue the program and pay about $7,500 to the Treasury. “The message we hope to send today is clear,” said John C. Weicher, HUD Assistant Secretary for Housing – Federal Housing Commissioner, in the statement. “Business practices that are intended to skirt the anti-kickback provisions of RESPA will not be tolerated.” |
