HUD settles cases involving illegal mortgage fees

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Lenders will pay more than $2 million in settlements with the U.S. Department of Housing and Urban Development in cases involving illegal kickbacks and referrals.|ret||ret||tab|

According to a HUD news release, Secretary Mel Martinez announced that the settlements came as part of the Department's initiative on enforcement of the Real Estate Settlement Procedures Act.|ret||ret||tab|

"These cases demonstrate HUD's de-termination to enforce RESPA and to stop illegal referral fees and unearned fees that may ultimately raise the price that unsuspecting families pay for their homes," Martinez said. |ret||ret||tab|

The settlements total more than $2,250,000 for consumer housing counseling and education, refunds to homebuyers and payments to the government. The settlements include agreements with The First American Corp. and Trans-america Corp., providers of flood determination and tax settlement services to hundreds of lenders throughout the country; Conseco Finance Corp., one of the nation's largest lenders; ARVIDA/JMB Partners, a large Florida builder; and Central Pacific Mortgage Corp., a na-tional home lender. |ret||ret||tab|

The companies cooperated in HUD's investigations and entered into the settlements to resolve the findings of HUD's investigations.|ret||ret||tab|

RESPA requires disclosures to homebuyers of settlement costs and provides protections to home buyers during the process of settlement of a mortgage loan. |ret||ret||tab|

RESPA Section 8(a) prohibits kickbacks and referral fees among settlement service providers and section 8(b) prohibits the charging of unearned fees for settlement services. Section 9 prohibits requiring the use of a particular title company. |ret||ret||tab|

So far this year, HUD has entered into 38 settlements with lenders for violations of the anti-kickback provisions of Section 8 of RESPA. [[In-content Ad]]