A class action lawsuit has been certified by a Maryland federal court against Home Point for alleged Real Estate Settlement Procedures Act violations stemming from a decade ago.
The suit claims Home Point acquired a company in 2015 that was already involved in a kickback arrangement with a title company, but these practices continued a few years after the company was purchased.
RESPA violations at first occurred between Maverick Funding Corporation and All Star Title, a now-defunct title and settlement services company, the suit says. Maverick purportedly referred residential mortgage loans to the title company in exchange for payments that were then laundered through third-party marketing companies, per the suit.
The arrangement, which went on from 2014 to 2016, resulted in Home Point receiving "thousands of dollars in kickbacks from All Star Title in exchange for assigning and referring 444 loans," the suit claims. The certification was first reported on by Law360.
To fund the kickbacks, plaintiffs allege that the now defunct lender and All Star Title "charged Home Point borrowers fraudulent and unnecessarily increased charges for title and settlement services."
Mr.Cooper, which acquired Home Point earlier this year, declined to comment.
The class action is represented by plaintiffs Sandra Moyer, Richard Martin, Terry Patterson, Jr., and Yvonne Matthews on behalf of similarly situated individuals.
The defendant in turn filed a motion questioning evidence the plaintiffs presented to the judge to be granted class certification.
The motion points out that the class action relies on certain email chains that "do not involve Home Point at all, but instead involve the relationships between All Star Title, Inc. ("All Star") and two entirely different lenders." This, in Home Point's opinion, provides no foundation for class certification, nor does this amount to any kind of confession.
The lender also argues that the class relied on a previous RESPA case involving a bank and All Star Title – Brasko v. Howard Bank – for the certification, which " involved different facts, different evidence, and a different lender" making it moot and not relevant in this case.
Specifically, the defendant argues the plaintiffs failed to show evidence of communication between Home Point and All Star, wherein in Brasko V. Howard Bank, there was proof.
RESPA violations and kickback schemes are under the watchful purview of the Consumer Financial Protection Bureau, which seems to have ratcheted up its enforcement efforts.
Most recently, Freedom Mortgage was accused of such practices and fined $1.75 million for allegedly providing illegal incentives to real estate brokers and agents, such as cash payments, paid subscription services, and catered parties, with the understanding purchase business would be sent its way in return.
