WASHINGTON — The U.S. Supreme Court limited the ability of homebuyers to sue mortgage lenders for overcharges at settlement in a victory for the real-estate and banking industries.
The justices unanimously threw out a suit by a group of Louisiana consumers against Quicken Loans Inc. over fees they paid at their mortgage settlements.
The homebuyers said Quicken charged as much as $1,100 in “loan discount fees” without providing the interest-rate reduction those fees typically bring. Quicken said the borrowers received lower rates in exchange forthe fees.
The fight centered on a provision in the 1974 Real Estate Settlement Procedures Act that bars lenders in at least some cases from collecting money for settlement services they didn’t perform.
The high court said Thursday that provision applies only when the settlementservice provider splits the fee with another entity.
President Barack Obama’s administration sided with the Louisiana consumers at the high court, while the banking and real estate industries backed Quicken. Lower courts had been divided on the reach of the 1974 law.
The case is Freeman v. Quicken, 10-1042.
Front Section, Pages 3 on 05/25/2012