PHH Corp. and Realogy Holdings have agreed to pay $17 million to settle claims stemming from a 2015 class action lawsuit over alleged kickbacks involving a joint mortgage venture between the two firms.
A lawsuit accused the companies through their PHH Home Loans of violating the Real Estate Settlement Procedures Act (RESPA) by “improperly paying and receiving kickbacks, referral fees, or other things of value in connection with the referral of title insurance and other settlement services.” The lawsuit claims PHH Home Loans acted “exclusively” as the mortgage lender for Realogy’s real estate brands, which includes Coldwell Banker, Sotheby’s International Realty, ZipRealty and more. The lawsuit also alleged that PHH had an agreement to refer all title and settlement services to Realogy’s subsidiary, Title Resource Group.
PHH and Realogy shuttered their joint mortgage company last year.
PHH and Realogy denied any wrongdoing, but agreed to settle the lawsuit to “avoid the distraction and expense of continued litigation,” PHH said in a statement. The settlement recently received final approval from the court.
Payouts to any affected PHH Home Loan customers will be issued soon. Those PHH customers who may be eligible for payments from the class action lawsuit must have paid title, escrow or closing-related charges in connection with a mortgage loan to Title Resource Group or its affiliates between Nov. 25, 2014, and Nov. 25, 2015.
About 32,217 customers may be eligible for payments of more than $360 each from the settlement, says Evan Borges of Greenberg Gross.
Realogy has not commented publicly on the settlement. PHH asserts they complied with RESPA rules.
“We firmly believe we complied with the Real Estate Settlement Procedures Act and other laws applicable to our former joint venture with Realogy,” PHH said in a statement. “Adhering to high legal, regulatory and ethical standards is at the core of how we conduct business, and we remain committed to serving our customers and all of our stakeholders consistent with that principle.”
Source: “PHH, Realogy Agree to Pay $17 Million to Settle Lawsuit Over Alleged Kickbacks,” HousingWire (Sept. 4, 2018)
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