Archive: 24 February 2012

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Treasury Offers Triple Investor Incentives for Principal Reductions
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Freeman v. Quicken Loans to Decide Whether Undivided Unearned Fees Violate RESPA

Treasury Offers Triple Investor Incentives for Principal Reductions

By: Eric J. Edwardson, Kerri M. Smith

In January, Treasury announced significantly enhanced payments to encourage investors to consider or expand principal reduction modifications under HAMP. To effectuate this change, Treasury issued Supplemental Directive 12-01 on February 16, 2012, tripling the investor incentives that can be earned for permanent modifications under HAMP’s Principal Reduction Alternative Program, known as PRA, for loans with trial period plan effective dates on or after March 1, 2012. Few of the existing HAMP incentives have enjoyed the market success desired, and only time will tell whether this initiative is more fully embraced. Read More

Freeman v. Quicken Loans to Decide Whether Undivided Unearned Fees Violate RESPA

By: Phillip L. Schulman

To split an unearned fee or not to split an unearned fee in order to violate the Real Estate Settlement Procedures Act (RESPA) – that is the question. Rather, that was the question on February 21, 2012 when the Supreme Court heard oral argument in the case of Freeman v. Quicken Loans, Inc. The case is intended to settle a dispute among the federal circuit courts regarding the statutory interpretation of Section 8(b) of RESPA which prohibits giving or accepting “any portion, split, or percentage” of any charge for settlement services “other than for services actually performed.” Read More

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