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Date: 8/18/2008
Authors: Brian Sullivan
 
     

News Bite

HUD Settles Lawsuit with California Hazard Reporting Company and Real Estate Brokerage

The U.S. Department of Housing and Urban Development has settled its federal lawsuit under the Real Estate Settlement Procedures Act (RESPA) against a natural hazard reporting company and a real estate brokerage in California. The settlement includes a landmark ruling by the judge in the case that HUD has the authority to seek permanent injunctions and disgorgement of illegal profits from companies that collect referral fees-or "kickbacks"-in violation of RESPA.

In the lawsuit, HUD alleged that the natural hazard reporting company, Property I.D. Corporation, had paid illegal kickbacks to real estate brokers for referral of customers to Property I.D. As part of the settlement, the parties agreed that payment of a combined $35 million award, much of it to California consumers who purchased hazard disclosure reports as far back as 1996, will satisfy HUD's demand that the companies disgorge illegal profits.
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