The U.S. Department of Housing and Urban Development (HUD) recently suffered another setback in court with respect to its administration of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 et seq. RESPA broadly governs the residential real estate settlement services industry and, in particular, § 8 of RESPA prohibits the payment of incentives for the referral of settlement service business.
A HUD interpretation of § 8 was recently discounted by the U.S. Supreme Court in Freeman v. Quicken Loans, 132 S.Ct. 2034 (2012). There, the court refused to give Chevron deference to HUD’s position, expressed in a 2001 statement of policy, that a fee need not be split or shared between two parties for § 8(b) of RESPA to be violated. (See Chevron U.S.A. v. Natural Resources Defense Council, 467 U.S. 837 (1984), articulating the doctrine of administrative deference, requiring courts to defer to reasonable government agency interpretations of ambiguous statutes.)
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