Galloway and Collens, PLLC
248-397-5507
248-397-5507

Supreme Court decision limits recovery for home buyers

Mortgage agreements are complex and difficult for many consumers to understand. Prospective buyers often rely on the expertise of their realtor and the advice of their mortgage company representative or banker to help them parse the language and terms of the agreement. Some homebuyers choose to be represented by an attorney in the negotiation and execution of a home purchase so that they have an expert that will advocate for their interests alone.

One area of confusing is often the different fees that are assessed in a mortgage agreement. Some line items will be taxes or other regulatory fees, and some will be administrative fees from the various parties to the agreement. This week, a Supreme Court decision clarified and restricted a law that governs those fees, which says that no person can accept a fee for a service that they did not actually perform.

The recent decision clarified that this rule only applies to a situation where a service provider is splitting a fee with another entity or person.

The case before the court was brought by several families who were charged an interest rate discount fee, but who said that they did not benefit from a lower interest rate. The mortgage company says that they did receive a lower interest rate and that the claim for damages was unfounded, since the service was performed.

This ruling is been seen as a setback for some consumer advocates, but is being cheered by the mortgage industry. The decision was unanimous and upholds an earlier Court of Appeals decision.

Source: Washington Post, "Supreme Court says families cannot sue mortgage company over loan discount fee," May 24, 2012.

No Comments

Leave a comment
Comment Information
  • dbusiness - 2016 Top Lawyers
  • dbusiness - Top Lawyers
  • Lead Counsel Rated Attorney
  • Senior & Caregiver
  • American Appartment Owners Association - Member since 2015
  • Same Address
  • ICLE Contributor
Email Us For A Response

Contact Our Metro Detroit Attorneys

Our law firm is ready to help. Contact the real estate and estate planning attorneys at Galloway and Collens, PLLC, by calling 248-397-5507.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

26075 Woodward Avenue Suite 200 Huntington Woods, MI 48070-1341 Toll Free: 888-349-0309 Phone: 248-397-5507 Fax: 248-545-2520 Huntington Woods Law Office Map