ALTA® Response to Ken Harney RE: Echevarria v. Chicago Title & Trust Co

August 24, 2001

August 24, 2001

[The following is a response prepared by ALTA to Ken Harney, syndicated real estate columnist from the Washington Post, regarding an article he wrote on the Echevarria v. Chicago Title & Trust Co decision discussed elsewhere on ALTA?s website. To access his original column, go to ]

Dear Ken:

I read your article on Saturday regarding the above decision. You may want to read ALTA's summary of the decision and advice to its members (written by Sheldon Hochberg and posted very shortly after the decision was handed down) which appears on our website, We do not condone markups of third party charges where additional services are not provided. Moreover, we support full disclosure on the HUD-1 form (where such disclosure is meaningful to the consumer) and believe that is the position of the great majority of our members.

However, we also believe that HUD has (not infrequently) engaged in interpretation and management of the statue which has undermined what effectiveness it might have had in protecting consumers from abuses it was originally aimed at. The subject matter of this case is one example. However laudatory it may be to "stretch" a statute to cover clear consumer abuses, if that interpretation isn't supported by the language of the statute and hasn't been adequately promulgated by the agency, more harm than good will result. We believe the court was correct in its interpretation and in refusing to "defer" to HUD's inadequately stated and promulgated interpretation.

But just because a poorly drafted (and possibly poorly thought-out) statute like RESPA's Section 8 can't reach these abuses hardly means a consumer is without remedy. In addition to the "risks" we stated in our member advice, consumers may also register their concerns and complaints to appropriate state regulatory authorities. In most cases, such action is far more effective than launching class action litigation if your objective is to immediately remedy the aggrieved consumer's problem. Mortgage bankers and title/settlement agents are almost always licensed individuals or entities. If they have acted in an inappropriate manner, their regulating authority gets their attention most quickly and a more tailored remedy can be provided. In my experience, most class action litigation only enriches plaintiffs' bar, not aggrieved consumers. And a licensee that has stepped out of line, usually only needs to be confronted once by its regulatory authority to change its practices.

James R. Maher
Executive Vice President
American Land Title Association
1828 L St., N.W. Suite 705
Washington, D.C. 20036-5104

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