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QuickenLoans’ Mortgage-Fees Dispute Reaches Supreme Court

A case over unearned mortgage fees reached the desk of the nation's highest judicial authority Tuesday, as the ""Supreme Court"":http://www.supremecourt.gov/ accepted to hear a suit over unearned fees that mortgage lenders allegedly charged their borrowers.

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The defendant: Detroit-based ""QuickenLoans"":https://www.quickenloans.com/, which an ""amicus curae brief"":http://sblog.s3.amazonaws.com/wp-content/uploads/2011/09/10-1042-Freeman-v.-Quicken-Loans_mtd.pdf, filed by borrowers in Louisiana, accuses the lender of failing to abide by the Real Estate Settlement Procedures Act (RESPA), the 1974 law responsible for banning financial benefits for lenders and servicers involved in federal loans.

The brief names Tammy Foret Freeman and other petitioners as the plaintiffs.

""_The Wall Street Journal_"":http://blogs.wsj.com/developments/2011/10/11/supreme-court-to-consider-mortgage-fees-lawsuit/ reported that Freeman and her fellow plaintiffs present the case as one in which the mortgage fees charged by QuickenLoans were unallowable ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô a position the Obama administration endorses by arguing a consistency of approach to the law from ""HUD"":http://portal.hud.gov/portal/page/portal/HUD.

According to the brief, their attorneys allege that ""HUD consistently interpreted [RESPA] to prohibit

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all unearned fees, regardless of whether those fees are divided between two or more people.""

It cites a 1976 consumer information booklet that supplemented RESPA's ban on settlement kickbacks with information calling it ""also illegal to charge or accept a fee or part of a fee where no service has actually been performed.""

The brief says that HUD adopted a later regulation that reaffirmed the prohibition for unearned mortgage fees.

Brian Sullivan, a spokesperson for HUD, declined to comment for the story.

Spokespeople for neither QuickenLoans nor the ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/, under the auspices for which RESPA now falls, could be immediately reached for comment.

The case climbed to the highest court following a number of disputes among lower courts, according to the _Journal_, which reported QuickenLoans winning a case on a 2-1 vote at the ""Fifth U.S. Circuit Court of Appeals"":http://www.ca5.uscourts.gov/ last year.

This is not the first time QuickenLoans faces a suit over questionable fees and practices. Following several years of litigation, the embattled mortgage lender celebrated a big win following the unanimous decision by a jury to reject claims over unfair compensation charges for employees.

Said the company in a March ""statement"":http://www.quickenloans.com/about/press-room/us.-federal-court-jury-rules-quicken-loans: ""Our hope is that today's victory inspires other job-creating companies to defend against meritless lawsuits which drain wealth and productivity from our society.""

The _Journal_ said that oral arguments will roll forward for the Supreme Court case in early 2012. A decision by the high court is expected that summer.

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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