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RESPA LogoOn November 27, 2013, the day before Thanksgiving, many real estate, mortgage and title insurance people were giving thanks for the decision handed down by The U.S. Appeals Court for the Sixth Circuit.

In a nutshell, there was an earlier federal court case (Carter v. Welles-Bowen Realty) that declared HUD’s long-standing “10-Point Standard” unconstitutionally vague and that it did not constitute agency regulations, and therefore did not merit deference by the courts. 

That decision was appealed, and even with strong support from HUD, the appellate court upheld the lower court’s decision.  In my opinion, this is HUD logoHUGE!  This court precedent will have a far-reaching effect within the real estate industry, and will change the landscape of Affiliated Business Arrangements in the future.

Granted, the CFPB has taken over RESPA enforcement from HUD, and that new entity is being aggressive, but this changes the playing field quite a bit.  ABAs must still meet the three baseline statutory requirements, but the Feds can no longer use the 10-point Standard with any real authority.

Here is a link to Ken Harney’s Inman News article about this ruling.

What are your thoughts?