What is the Real Estate Settlement Procedures Act (RESPA)? – Marshall Wallace

What is the Real Estate Settlement Procedures Act (RESPA)? – Marshall Wallace

– [Narrator] RESPA is a
federal statute that stands for the Real Estate Settlement Procedures Act. Under Section 8, the statute gets blurry where RESPA deals with class
actions and complex litigation. – Basically, Section 8 of RESPA tries to police arrangements such as
kickbacks and fee-splittings in settlement services and
real estate transactions. – [Narrator] The most common
real estate transaction is the sale of a home. The buyer or seller of
that home most likely doesn’t buy or sell houses for a living. So they need help that usually comes in the form of a real estate agent, someone at the center representing them and recruiting services such as escrow, inspections, and title insurance. – [Marshall] The realtor certainly knows who those people are. And the providers of
those settlement services that you need to get your house purchased, they viewed their real estate agents as an important source
of referral business. – [Narrator] A few decades ago, these settlement service providers came under fire by the federal government by giving kickbacks or splitting fees to real estate agents for
referring them business. – The concern was that, because there were these costs of kickbacks or fee splits built into the referral fees, then the consumer, the home buyer or the home seller, was actually having to pay more for those services, and that’s the genesis of RESPA. – [Narrator] Here is where it gets blurry, because some of these settlement services are regulated. Take, for instance, a
title insurance company. Its rates are set by insurance regulators in certain jurisdictions. – [Marshall] In those
states, a plaintiff is never going to be able to show that he or she paid any
more for title insurance, for example, than somebody else did because of a challenged alleged kickback or fee split arrangement. And so, quite justifiably, defendants have been saying in such cases, and they are numerous, “This plaintiff has no standing. “They can’t show that
they’re any worse off “because of the arrangement which “they challenge in this case.” – [Narrator] Normally, to
show standing in a case, the plaintiff has to show actual injuries suffered under Article 3
of the U.S. Constitution. However, plaintiffs have managed to get around that standing problem and have their cases
heard in federal court.

2 thoughts on “What is the Real Estate Settlement Procedures Act (RESPA)? – Marshall Wallace

  1. You were great!!!!!!!

  2. clear compared to other videos

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