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Recent Court Decisions Shed Light on RESPA Section 8

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July/August 1998 - Volume 77, Number 4

By Sheldon E. Hochberg, Esquire

The author is a partner in firm of Steptoe & Johnson, Washington, DC, and is a recognized expert on RESPA matters. He has counseled and represented ALTA®, state associations, and individual title insurers and agencies on RESPA, and has been a speaker at numerous bar and title industry seminars. In addition, he represented the title insurance industry in connection with consideration by Congress of the original RESPA legislation.

The last three years have seen a significant increase in the number of court decisions that have addressed the kickback and fee-splitting provisions of Section 8 of the Real Estate Settlement Procedures Act, as amended, 12 U.S.C. Section 2607 (1995). These decisions, many of which have been issued in suits challenging the payment of "yield spread premiums" by lenders to mortgage brokers, provide valuable insights to all settlement service providers on how the courts are interpreting Section 8 and HUD’s RESPA regulations. This article discusses these recent RESPA decisions and the lessons they may provide for the title insurance industry.

In the last three years, a number of suits, mostly in the form of class actions, have been brought claiming that the payment of a YSP violates Section 8(a) and/or 8(b) of RESPA. Plaintiffs claim that the YSP violates Section 8(a) because it is a referral fee paid by the lender to the mortgage broker for the referral of the loan business, and violates Section 8(b) because it constitutes the payment of a portion or split of the fee for the loan that is not for services actually rendered by the mortgage broker or is in excess of the reasonable value of those services.

No court has yet reached a final decision on the merits after a trial. Rather, the decisions to date (other than those addressing class action issues) have been rendered on motions to dismiss and motions for summary judgment filed by the defendants. Motions to dismiss have been denied in a number of these cases./1

I. The Yield Spread Premium Decisions

The term, "yield spread premium," refers to payments mortgage lenders may give to mortgage brokers for certain "above-par" loans generated by the mortgage broker. This "price" a lender is willing to pay for a loan is expressed as a percentage of the loan amount and is influenced by factors such as the type of loan, the interest rate, and the "lock-in" period. For a loan of par value, the lender pays nothing to the mortgage broker. For a "below par" loan, the broker must pay discount points (which are charged to the borrower at closing). For "above par" loans, the lender pays the broker a "yield spread premium" (YSP).

In the last three years, a number of suits, mostly in the form of class actions, have been brought claiming that the payment of a YSP violates Section 8(a) and/or 8(b) of RESPA. Plaintiffs claim that the YSP violates Section 8(a) because it is a referral fee paid by the lender to the mortgage broker for the referral of the loan business, and violates Section 8(b) because it constitutes the payment of a portion or split of the fee for the loan that is not for services actually rendered by the mortgage broker or is in excess of the reasonable value of those services.

No court has yet reached a final decision on the merits after a trial. Rather, the decisions to date (other than those addressing class action issues) have been rendered on motions to dismiss and motions for summary judgment filed by the defendants. Motions to dismiss have been denied in a number of these cases.  Similarly, while defendants were able to obtain summary judgment in two district court cases, not all defendants have been so fortunate./2 

The two decisions granting summary judgment for the defendants merit brief discussion. In Culpepper I, the district court concluded that the YSP was not a referral fee, but a market-driven payment for the purchase of an asset - the loan. This decision, however, was reversed by the U.S. Court of Appeals for the Eleventh Circuit. Culpepper v. Inland Mortgage Corp. 132 F.3d 692 (11th Cir. 1998) ("Culpepper II"). The Eleventh Circuit concluded that the mortgage broker could not be viewed as the "seller" of the loan because the transaction was table funded from the outset by the ultimate lender.

The court then concluded that the YSP was not a payment for services rendered for two reasons. First, the borrowers had paid a separate 1% origination fee to the mortgage broker for the services rendered to them. Second, in its response to interrogatories, the lender had admitted that the YSP was keyed to the interest rate on the loan, which, in the court’s view, contradicted the theory that the YSP compensated the broker for services to the borrowers.

In Barbosa, the court considered a summary judgment motion filed by the ultimate lender in the transaction. After describing plaintiffs’ "troubling tale" about how they had been told by the mortgage broker that he would obtain a loan for them at the lowest interest rate on the market, how they had paid over $1,100 in origination, discount and processing fees to the mortgage broker, and how they discovered at closing that the broker had also received a $2,500 yield spread payment from the lender after obtaining an above-par loan, the court nevertheless granted summary judgment for the defendant, observing that:

[h]owever compelling this story, if true, the Court does not hold a general license to ferret out alleged frauds and breaches of trust, and to punish the offenders. The instant motion presents a set of narrow questions arising under a discrete federal statute./3

Part II will now discuss the significant observations made in these and other recent decisions on RESPA issues of interest to ALTA® members.

II. SIGNIFICANT RESPA ISSUES

IN RECENT DECISIONS

A. Decisions Interpreting Section 8(a).

1. Can the payment of market-determined fees violate Section 8(a)?

An issue that arises in Section 8(a) analysis is whether a payment can constitute a prohibited referral fee if the amount of the payment is determined by market forces and is consistent with comparable payments made by others.

Two district court decisions have concluded that, if all lenders are paying market-determined prices for above-par loans, "the offering of yield spread premiums will not influence a broker’s choice of one lender rather than another . . . . A borrower can only claim that a yield spread premium influenced his broker’s choice of lender if he or she can show that the premiums offered by that lender were substantially different from the prevailing market rate."/4

This analysis, however, was rejected by the Eleventh Circuit in Culpepper II. In responding to the argument that market forces determined the size of YSPs, the court responded in unambiguous terms that "[t]his fact does not affect our analysis because the size of kickbacks and referral fees often is shaped by the value of the referred business. A market driven referral fee is still a referral fee prohibited by RESPA."/5

The differing conclusions may be explained by the differing perceptions of the judges as to whether the YSP represented a payment (or "overpayment") for goods or services, or was simply a payment for the referral of the loan. The Eleventh Circuit panel in Culpepper II believed that the market value test was inapplicable because the YSP was payment "only for the referral of the loan." In other words, if a payment is simply for the referral of business, the fact that everybody is paying the "market rate" would not render the payment lawful under Section 8.

On the other hand, the district courts in Hastings and Barbosa believed that the YSP reflected payment for goods or services provided and, in that context, concluded that when a settlement service provider pays a market-determined price for goods or services, there can be no violation of Section 8.

2. 2. Does the payment of a higher fee for a service when the provider refers business violateSection 8(a)?

A recent Seventh Circuit decision has made clear that title companies should avoid basing the level of the payments for goods or services on whether the party providing the good or service is also referring business.

In Lawyers Title Ins. Corp. v. Dearborn Title Corp.,/6 the court considered an arrangement between a title company and a mortgage lender whereby the lender allowed the title company to use its premises to close transactions for a fee of $100 if anyone else provided the mortgage financing, or a fee of $300 if the financing in the transaction was provided by the lender. In affirming a district court decision that the $200 rental "premium" constituted a violation of Section 8(a), the Eleventh Circuit concluded that:

[t]he cost of renting office space to Dearborn for conducting mortgage closings was no greater when United was the lender than when some other financial institution was. The only plausible explanation for the $200 premium is that it was compensation to United for steering its borrowers to Dearborn to handle the closing./7

While the court recognized the possibility that the differential "conceivably’ might be justified by other factors, it found that the only possible inference based on the record in the case was that the $200 was a referral fee in violation of Section 8(a).

B. The Scope and Meaning of Section 8(b).

There has been far more controversy regarding the scope and meaning of Section 8(b) of RESPA than Section 8(a). The full text of Section 8(b) is as follows:

No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually rendered.

Everyone agrees that Section 8(b) addresses payments other than for services actually rendered. Where there is disagreement, particularly between HUD and most of the courts that have looked at the issue, is whether Section 8(b) only applies where a settlement service provider pays a portion of its fee to another person (e.g., to another settlement service provider) who has not rendered any real services in return, or whether Section 8(b) also applies where a settlement service provider charges the consumer for services not rendered but does not split its fee with another party.

1. HUD’s expansive view of the scope of Section 8(b)

While HUD has not squarely addressed this issue through a duly promulgated regulation, it has, with increasing clarity, suggested that Section 8(b) applies to settlement charges paid by consumers where little or no services are provided even when the charge has not been divided between two parties./8 For example, Section 3500.14(c) of HUD’s RESPA regulations, as amended in 1992, provides:

A charge by a person for which no or nominal services are performed or for which duplicative fees are charged is an unearned fee and violates this section. The source of the payment does not determine whether or not a service is compensable. Nor may the prohibitions of this part be avoided by creating an arrangement where the purchaser of services splits the fee.

Section 3500.14(g)(3) of the regulations (also adopted in 1992) goes on to state:

Multiple services. When a person in a position to refer settlement service business . . . receives a payment for providing additional settlement services as part of a real estate transaction, such payment must be for services that are actual, necessary and distinct from the primary services provided by such person.

While it is not clear that these regulations are addressing charges to consumers (as will be discussed below, the only court to consider the issue has concluded that these provisions apply only in the context where a fee is split between two parties), there is less ambiguity in two other statements on this issue published by HUD.

In discussing the prohibition against referral fees in the information booklet required by RESPA Section 5, HUD states "[i]t is also illegal for anyone to accept a fee or part of a fee for services if that person has not actually performed settlement services for the fee."/9 The clear implication is that accepting a fee from the consumer where services are not actually performed is a violation of Section 8(b).

HUD’s clearest statement of its views on Section 8(b) were presented in the explanatory comments accompanying the release of its Statement of Policy 1996-1 on Computer Loan Origination Systems (CLOs)./10 In responding to the argument that Section 8(b) did not provide a legal basis for HUD’s original proposed rule regulating the conditions under which borrowers could be asked to pay for CLO services, HUD made clear that:

it disagreed with those court decisions that had concluded that Section 8(b) only applies where two parties split a settlement service fee;

the interpretation of Section 8(b) as permitting a single settlement service provider to charge "unearned or excessive fees" so long as it does not share the fees with another party is "an unnecessarily restrictive interpretation of a statute designed to reduce unnecessary costs to consumers;" and

Section 8(b) could apply in a number of contexts: (1) where one settlement service provider receives an unearned fee from another provider; (2) where a provider charges the consumer for third-party services and retains an unearned fee from the payment received; or (3) where a provider accepts a portion of a charge - "including 100% of the charge" " for other than services actually performed./11

The first context in which HUD says that Section 8(b) could apply is clearly contemplated by the language of the statute. As will be discussed next, although several recent court decisions have agreed that Section 8(b) can be applied in the second context " where one party "marks up" another provider’s charges " reaching that result under the language of Section 8(b) is problematical.

Finally, HUD’s position on the application of Section 8(b) in the third context " that Section 8(b) prohibits unearned or "excessive" fees charged by settlement service to consumers " has far-reaching, and potentially disturbing, consequences. If correct, it could provide a basis for a challenge to any fee or charge that HUD or a consumer believes is not justified by the services rendered or is "excessive." However, as will be discussed shortly, virtually all of the courts that have considered the issue have concluded that the language of Section 8(b) will not support HUD’s interpretation.

2. Does Section 8(b) apply to the "mark-up" of a third party’s charge?

Two recent district court decisions have agreed with HUD that Section 8(b) is violated when a party, without providing any real services, "marks up" the charge of another settlement service provider and retains the difference.

In Martinez v. Weyerhauser Mortgage Co., the court concluded that a lender who charged a borrower $65 for courier fees, but was only able to produce receipts from couriers that totaled $56.25, may have violated RESPA with regard to the "unaccounted for courier fee of $8.75."/`12 In McCulloch v. Great Western Bank, the court denied the bank’s motion to dismiss a complaint alleging that the bank had violated Section 8(b) by charging the plaintiff borrower $50 for a credit report when the credit reporting agency had invoiced the bank only $13.50 for the report. In support of its decision, the court cited a HUD Web site of answers to frequently asked RESPA questions in which HUD stated that it would be a violation of Section 8(b) for a lender to collect an appraisal fee of $200, pay $175 to the appraiser, and collect the $25 difference where services are not performed by the lender./`13

On the other hand, the Seventh Circuit appears to have reached a contrary conclusion in Durr v. Intercounty Title Co. of Illinois,/144 where the court affirmed the dismissal of a complaint alleging that a title company had violated Section 8(b) by adding approximately $8 to fees charged by the Cook County Recorder of Deeds for the recording of the deed and mortgage. Although the court’s decision to deny the claim may have been influenced by its perception of the somewhat frivolous behavior of the plaintiff, /15 it nevertheless concluded that, while "’RESPA is a broad statute, directed against many things that increase the cost of real estate transactions’ . . . under RESPA’s express terms, this broad protection extends only over transactions where the defendant gave or received "any portion, split, or percentage of any charge’ to a third party."/16 In the court’s view, the $8 overcharge was not shared with anyone and, at most, was simply a windfall that the title company kept for itself.

While the Seventh Circuit’s view that the amount of the mark-up itself has to be shared with a third party is questionable,/17 the court’s conclusion that the "express terms" of Section 8(b) do not apply where the defendant has given a portion of the fee to another person who has rendered services has merit. This can be seen in the following two examples.

Example 1: Consumer pays $100 to X for a settlement service and X pays $25 of this fee to Y other than for services rendered.

Example 2: Consumer pays $100 to X for a settlement service, X pays $75 of this fee to Y for services actually rendered by Y, and retains the $25 difference even though it provides no extra services for that amount.

Example 1 presents the case contemplated by the language of Section 8(b): a person has given, and another person has accepted, a portion, split or percentage of a settlement charge other than for services actually rendered.

In the "mark-up" case presented in Example 2, however, the person receiving the portion, split or percentage (Y) has rendered services. It is X, the person who is paying the portion, split or percentage, who did not render any services. How, then, can a decision holding X liable be squared with the language of Section 8(b)? There are two alternative "theories," neither of which provides a compelling or comfortable approach.

First, one could take the view that it is Y that received the $100 fee and that Y was actually splitting its $100 fee with X where X was not rendering any services. The difficulty with this approach is that Y may never have even known that X had marked up its charge, much less "paid" X anything out of its charge. Moreover, it seems awkward to conclude that only one party to an illegal fee-splitting arrangement (X and not the innocent Y) should be held liable.

The second approach would be to take the view that the person who is giving the illegal "portion, split or percentage" is the consumer. However, this would require a reading of Section 8(b) that would suggest that the consumer could be in violation of Section 8(b).

In short, while the practice of marking-up another provider’s charge may be the kind of practice that Section 8(b) should condemn, it is not clear how one squares such an interpretation with the actual language of Section 8(b). In any event, the fact that HUD and several courts have concluded that the mark up of another party’s fees can violate Section 8(b) suggests that such practices should be avoided. Even if the company believes the mark-up to be justified by additional services it has rendered, it may not be able to convince a court of that justification.

3. Does Section 8(b) apply when there has been no split of a settlement service charge between two parties?

As noted above, HUD has taken the position that a charge to a consumer for which no or nominal services are performed, or which is "excessive," is an "unearned fee" and violates Section 8(b) even if the charge is not split between two parties.

This view, however, has been repeatedly rejected by the courts, which have generally held that Section 8(b) only applies to situations where two parties split the fee for a settlement service and does not apply to purported "overcharges" by a provider to a consumer./18 It also appears to be in conflict with relevant legislative history /19 One recent decision, Willis v. Quality Mortgage USA, Inc., /20 is particularly noteworthy.

In Willis the court granted the defendant lender’s motion to dismiss a complaint alleging that its charges to the plaintiff borrowers of a $250 review appraisal fee, a $200 document preparation fee, and an $87 tax service contract, violated Section 8(b) in light of the fact that the plaintiffs had also paid a fee to their mortgage broker that they alleged covered the costs for such services. The plaintiffs position was that these charges violated Section 8(b) " even though they were not split with some third party " because (1) they were for unnecessary services or services not actually rendered, and (2) they were for services that were not "actual, necessary and distinct" from the primary services provided by Quality Mortgage.

In support of their first contention, plaintiffs claimed that the language in ?3500.14(c) of the RESPA regulations " "[a] charge by a person for which no or nominal services are performed or for which duplicative fees are charged is an unearned fee and violates this section" " expanded the scope of Section 8(b) so as to prohibit charges to the consumer for which no services are provided even if the charge is not split between two parties. The court rejected that interpretation, finding that "[t]he statute prohibits the splitting of fees unless a service is actually performed," and, when read in context, the above-quoted sentence does not "create an entirely new zone of proscribed conduct."/21 In short, the court concluded that "payments which are not split, and which are not in exchange for business referrals, do not violate Section [8]."

In support of their second contention, plaintiffs contended that the language of Section 3500.14(g) of the regulations imposed a direct obligation on a settlement service provider not to charge the consumer for a service unless the service is "actual, necessary and distinct from the primary services provided by such person." Again, the court rejected this reading of the regulation:

As discussed above, HUD is empowered to interpret the statute, not to create new laws. It appears that the payment to which the regulation refers is a payment from a mortgage lender to a mortgage broker, or vice versa. It does not refer to a payment from the borrower to the broker./22

In short, by finding that these sentences in the regulations were intended by HUD to apply only to payments between a settlement service provider and a third person " not to payments by the consumer to the settlement service provider making the charge "the court was able to avoid a clear conflict between the regulations and the language of the statute.

Accordingly, while HUD may continue to take the position that Section 8(b) prohibits an "unearned" or "excessive" fee charged to a consumer, if current judicial precedent continues to be followed this interpretation will not be sustained by the courts.

4. How a Section 8(b) analysis of reasonable compensation should be undertaken

The combined effect of ?? 8(b) and 8(c) of RESPA is that reasonable payments for goods or services made by one settlement service provider to another provider who is in a position to refer business are not unlawful under Section 8(b). How to determine whether a payment for goods or services is "reasonable" is a key question in such an analysis.

In Barbosa, the plaintiff argued that to determine whether the YSP constituted a reasonable payment for services rendered, the court should look to national averages as a "baseline" of reasonableness. The court rejected this approach, asserting that this would be tantamount to the court’s setting legal maxima for the charges for settlement services " something that Congress did not intend in RESPA. "If Congress rejected a ratemaking role for itself and for HUD, it is inconceivable that it intended such a role for the federal judiciary."/23 According to the court, whether a particular payment is reasonable "should not be determined by looking for some platonic form of reasonableness inherent in national averages," but by looking to the processes that resulted in the payment of the particular fee. If arms-length bargaining in the mortgage marketplace set the payment for the broker’s services, the payment is reasonable enough within the meaning of RESPA, whether or not plaintiffs can produce twenty omniscient experts who will swear that brokers in California and Maine charge thirty times less for similar services. RESPA sets processes, not prices/ /24.

While the court is correct that what constitutes a "reasonable" payment should not be determined by national averages or other forms of surrogate "rate regulation," the validity of an "arm’s-length" bargaining test is dependent on the "arm’s length" nature of the relationship between the parties. In situations involving the payment for goods or services by a settlement service provider to a party who also refers business, the negotiation on the price to be paid for the good or service may not always be viewed by a court as being at "arm’s length." Accordingly, it may be prudent to base the price to be paid in such transactions on the market price that would prevail where the supplier of the good or service is not also a referrer of business.

C. Other Section 8 Issues.

1. Disclosure does not cure a Section 8 violation.

In several of the cases, defendants have argued that the YSP cannot be a violation of Section 8 because HUD regulations recognize the existence of such payments and require them to be disclosed to borrowers in the Good Faith Estimates and in the HUD-1 Settlement Statement. The courts have uniformly rejected this argument./25 Unless HUD has affirmatively determined that a payment is not a violation of Section 8, the fact that HUD’s regulations may require the disclosure of the payment does not insulate it from Section 8 challenge.

2. Does the borrower have to have paid the fee at issue in order to have standing to bring a Section 8 suit?

In at least two YSP cases, defendants have also tried to argue that the borrower lacks standing to bring a claim under RESPA because the ultimate lender, not the borrower, was the party paying the YSP. (Section 8(d) provides a cause of action only to "persons charged for the settlement service involved in the violation.") The courts have rejected this argument on the ground that it "ignores the underlying economic reality, recognized by HUD, that all fees and charges, whether directly or indirectly, are ultimately borne by the borrower."/26

In years past, anyone seeking official guidance on the proper interpretation of Section 8 would inevitably turn to the HUD regulations and informal staff interpretative letters for guidance. In the past three years, however, and with increasing frequency, such guidance is being provided by the courts. As the cases construing Section 8(b) demonstrate, not all HUD interpretations will be deferred to by the courts. A HUD interpretation " even one intended to protect consumers " will not be sustained if it cannot be squared with the plain language of the statute.


Mr. Hochberg is a recognized expert on RESPA matters. He has counseled and represented ALTA®, state associations, and individual title insurers and agencies on RESPA matters, and has spoken at numerous bar and title industry seminars. Mr. Hochberg represented the title insurance industry in connection with Congress’ consideration of the original RESPA legislation.


1/ See, e.g., Hastings v. Fidelity Mortgage Decisions Corp., 984 F. Supp. 600 (N.D. Ill. 1997); Moses v. Citicorp Mortgage, Inc., 982 F. Supp. 897 (E.D.N.Y. 1997); Mentecki v. Saxon Mortgage, Inc., 1997 U.S. Dist. LEXIS 1197 (E.D. Va. Jan. 10, 1997); and Martinez v. Weyerhauser Mortgage Co., 959 F. Supp. 1511 (S.D. Fla. 1996).

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2/ Summary judgment for defendants was granted in Barbosa v. Target Mortgage Corp., 968 F. Supp. 1548 (S.D. Fla. 1997) ("Barbosa") and Culpepper v. Inland Mortgage Corp., 953 F. Supp. 367 (N.D. Ala. 1997) ("Culpepper I"), but denied in DuBose v. First Security Savings Bank, 974 F. Supp. 1426 (M.D. Ala. 1997). In addition, several decisions have denied class action status primarily on the ground that class action treatment would be inappropriate because the case-by-case analysis of the services rendered by the mortgage broker in each of the transactions involved in the class, and the appropriateness of the YSP as compensation for such services, would predominate over the common questions of law and fact. See, e.g., Conomos v. Chase Manhattan Corp., 1998 WL 118154 (S.D.N.Y. March 17, 1998); Hinton v. First American Mortgage, 1998 WL 111668 (N.D. Ill. March 4, 1998).

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3/ 968 F. Supp. at 1553.

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4/ Hastings v. Fidelity Mortgage Decisions Corp., 984 F. Supp. 600, 612 (N.D. Ill. 1997). See also Barbosa, 968 F. Supp. at 1557-58.

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5/ Culpepper II, 132 F.3d at 697.

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6/ 118 F. 3d 1157 (7th Cir. 1997).

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7/ Id. at 1162.

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8/ In a related context, "HUD’s game of winking, nodding, and frowning" has been criticized as leaving the courts "with no clear administrative direction." Barbosa, 968 F. Supp. at 1555.

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9/ U.S. Department of Housing and Urban Development, Office of Housing - Federal Housing Administration, "Buying Your Home: Settlement Costs and Helpful Information" (June 1997) at 13.

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10/ 61 Fed. Reg. 29248-50 (June 7, 1996).

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11/ 61 Fed. Reg. at 29249.

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12/ 959 F. Supp. 1511, 1522 (S.D. Fla. 1996).

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13/ 1998 U.S. Dist. LEXIS 8226 (W.D. Wash. Feb. 10, 1998) at *6. The page of the Web site cited by the court is <http://www.hud.gov/fha/res/resindus.cfml>. The main page for HUD's RESPA Web site is <http://www.hud.gov/fha/res/ respa_hm.cfml>.

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14/ 14 F.3d 1183 (7th Cir.), cert. denied, 513 U.S. 811 (1994).

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15/ The plaintiff, after discovering the overcharge, made no effort to clear up the discrepancy with the title company, but immediately filed a class action suit seeking recovery in an amount equal to three times all fees paid to the title company for recording, closing and title insurance.

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16/ 14 F.3d at 1187, quoting Mercado v. Calumet Fed. Sav. & Loan Assn, 763 F.2d 269, 271 (7th Cir. 1985).

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17/ The district court in McCulloch rejected the Seventh Circuit?s reading of ? 8(b) as unjustified because it appeared to require the existence of a fourth party (i.e., a person with whom the party marking up a third party?s charge would split the overcharge). McCulloch, 1998 U.S. Dist. LEXIS 8226 at *7.

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18/ See, e.g., Durr v. Intercounty Title Co. of Ill., 14 F.3d 1183 (7th Cir.), cert. denied, 513 U.S. 811 (1994); Mercado v. Calumet Federal Sav. & Loan Ass?n, 763 F.2d 269, 270 (7th Cir. 1985); Barbosa v. Target Mortgage Corp., 968 F. Supp. 1548 (S.D. Fla. 1997); Duggan v. Independent Mortgage Co., 670 F. Supp. 652 (E.D. Va. 1987).

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19/ See Statement of Rep. Ben B. Blackburn, 120 Cong. Rec. 29,442 (1974) ("The House Banking Committee report makes clear that this prohibition was intended to deal only with fee-splitting arrangements among participants in the settlement process"). Rep. Blackburn was one of the two main sponsors of RESPA in the House of Representatives.

The House Banking Committee report described ? 8(b) as prohibiting "a person or company that renders a settlement service from giving or rebating any portion of the charge to any person except in return for services actually performed." H. R. Rep. 93-1177 at 7 (1974).

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20/ 1998 U.S. Dist. LEXIS 7581 (M.D. Ala. May 12, 1998).

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21/ Id. at 9-10.

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22/ Id. at 14.

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23/ Barbosa, 968 F. Supp. at 1562.

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24/ Id. See also Hastings v. Fidelity Mortgage Decisions Corp., 984 F. Supp. 600 (N.D. Ill. 1997) (applying Barbosa’s approach).

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25/ See Martinez, 959 F. Supp. at 1522; Mentecki v. Saxon Mortgage, Inc., 1997 U.S. Dist. LEXIS 1197 at **10-12 (E.D. Va. 1997); Moses v. Citicorp Mortgage, Inc., 982 F. Supp. 897, 901-02 (E.D. N.Y. 1997).

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26/ Mentecki v. Saxon Mortgage, Inc., 1997 U.S. Dist. LEXIS 1374 at *5 (E.D. Va. 1997). See also Barbosa, 968 F. Supp. at 1556 ("Princeton [the lender] was charged in the short run, and plaintiffs in the long run").

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