Overcharging For Settlement Services Gives Plaintiff Standing To Bring A RESPA Claim

There was a single question presented to the court Carter v. Welles-Bowen Realty, Inc., 07-3965 (6th Cir. Ohio, Jan. 23, 2009) and that was whether a plaintiff must allege a concrete injury, such as an overcharge, to have standing to bring a RESPA violation. The plaintiffs in Carter alleged that the defendants violated RESPA because the defendant title agency is allegedly a sham entity. It does not perform any settlement work but still receives unearned revenues while the real settlement work is actually performed by Chicago Title. The district court dismissed the complaint finding that the plaintiff’s lacked standing to sue under §8 of RESPA because they do not allege any overcharge or other concrete injury. The Sixth Circuit reversed. The Court started by reviewing the statute which it found prohibits in no uncertain terms the payment of any fee, kickback, or thing of value from business referrals. Where a violation of these blanket prohibitions occurs, RESPA provides that defendants are liable to the person or persons charged for an amount equal to three times the amount of _any charge paid_ for such settlement service. Parsing the plain meaning of the term any showed that charges are neither restricted to a particular type of charge (such as an overcharge) nor limited to a specific part. Thus, a defendant is liable for the charges assessed the home buyer for settlement services as a whole, and not just for overcharges. This conclusion, it found, was supported by the legislative history (where, for example, Congress amended RESPA’s damages provision, replacing the thing of value language with the phrase any charge paid for such settlement services agency regulations (where HUD opined that whether an overcharge occurs is irrelevant in determining whether the act is prohibited by RESPA. 24 C.F.R. §3500.14(g)(2) and RESPA’s statutory purpose (to-wit; that RESPA allows individuals to police the marketplace in order _to ensure impartiality of referrals and competition_ between settlement service providers, thereby creating a market-wide deterrent against unnecessarily high settlement costs).