The U.S. Supreme Court has unanimously upheld an appeals court decision in favor of Detroit-based Quicken Loans in a case regarding settlement service fees.
The case of Freeman v. Quicken Loans centered a group of Louisiana borrowers that accused the Detroit-based lender with violating the Real Estate Settlement Procedures Act (RESPA), which prevents financial services providers from charging an unearned fee unless the fee is divided between two or more parties. The plaintiffs stated that the lender charged as much as $1,100 in ‘loan discount fees’ but failed to offer interest-rate reductions usually associated with such fees.
Justice Antonin Scalia, writing the court's decision, stated that the plaintiffs did not prove that Quicken Loans violated RESPA in regard to this case.
‘In our view, [RESPA Section 8(b)] unambiguously covers only a settlement-service provider's splitting of a fee with one or more other persons,’ Scalia wrote. ‘It cannot be understood to reach a single provider's retention of an unearned fee.’
Quicken Loans, in a press statement, welcomed the court's decision.
‘Quicken Loans has won this case at every step and in every court – the U.S. District Court in New Orleans and the U.S. Court of Appeals for the Fifth Circuit – and now before the U.S. Supreme Court,’ the company said. ‘Although we always believed that we were on the right side of the law, it is especially gratifying to have the affirmation of the highest court in the country.’