13:28, July 17 77 0 abajournal.com

2017-07-17 13:28:04
Judge tosses CFPB suit claiming Kentucky law firm paid kickbacks through joint-venture title firms

A federal judge has sided with a Kentucky law firm sued by the Consumer Financial Protection Bureau for alleged kickbacks for real-estate work referrals.

U.S. District Judge Charles Simpson III found no violation of the Real Estate Settlement Procedures Act and tossed the suit against the law firm, Borders & Borders of Louisville. The National Law Journal (sub. req.) covered the July 13 decision.

The CFPB had claimed Borders & Borders paid kickbacks through nine title insurance companies it operated as joint ventures with local real-estate agents and mortgage brokers. The bureau claimed the split-profits arrangement violated the RESPA, which prohibits kickbacks for business referrals in connection with federally related mortgage loans.

Simpson said the law firm qualified for safe harbor under RESPA because it had disclosed the affiliated business arrangement to borrowers and buyers, and its customers were not required to use the title insurance agency.