HUD's View of Mark-ups

Answered by:

Question:

I noticed comment in Memorandum for update pages in a Mortgage Lending publication the following:"Several U.S. Circuit Courts of Appeal have disagreed with the Department of Housing and Urban Development (HUD) on whether mark-ups of third-party charges are violations of RESPA. For example, may a lender pay $15 to a credit reporting agency for a report and then charge the customer $30 for the report at closing and keep the $15 difference? HUD has said this would be a violation of the Real Estate Settlement Procedures Act (RESPA) and several courts have disagreed." Do you have any information concerning these court findings? Can this be done with this 3rd party charge or any others? Example; Could we charge for "payment coupon books" related to a mortgage loan payment?

Answer:

This is a complex area of the law and there have been several court cases on point. You can find the latest court cases on this subject, along with articles we've written about some of them, under the RESPA section in BOL's Court Watch.

First published on BankersOnline.com 9/15/03