Ever since the Consumer Financial Protection Bureau (CFPB) took over the Department of Housing and Urban Development (HUD) in 2011, the CFPB has turned out to be progressively dynamic in bringing implementation activities claiming infringement of section 8 of the Real Estate Settlement Procedures Act (RESPA). The highlight of today’s article is two such enforcement actions, which also exhibit a troubling diversion from the earlier HUD precedents in this field.
According to Section 8(a) of the RESPA, it is forbidden to give or accept “any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person.” At the same time, Section 8(c)(2) provides “[n]othing in this section  shall be construed as prohibiting the payment of bona fide salary or compensation or other payment for goods or facilities actually furnished or for services actually performed.”
Until recently, because of past HUD actions, the settlement administrations industry by and large comprehended Section 8(c)(2) as giving an exemption from liability under Section 8(a). The following two cases in question challenge this.