Unearned closing fees
Tammy Foret Freeman v. Quicken Loans
In brief
The Supreme Court upheld the ruling: a borrower must show that a settlement-service charge was split between at least two people to prove a Section 8(b) violation.
- Where it stands
- Decided
Decided 9-0 · May 24, 2012 · Opinion by Justice Scalia
- What it’s about
- Tammy Foret Freeman and other borrowers said Quicken Loans charged them fees for settlement services that were not performed.
- Who it affects
- Borrowers bringing Section 8(b) claims must show that the settlement-service charge was divided between at least two people.
Summary: written with AI from the case record.
What it's about
The Court agreed with the Fifth Circuit that a provider violates Section 8(b) of the Real Estate Settlement Procedures Act only if the charge is divided between two or more people; an undivided fee is not covered.
Freeman and other borrowers alleged that Quicken Loans charged them fees for settlement services it did not perform.
Section 8(b) is part of the federal law governing charges for real estate settlement services.
Question presented
Does Section 8(b) of the Real Estate Settlement Procedures Act prohibit a real estate settlement services provider from charging an unearned fee only if the fee is divided between two or more parties?
What the Court decided
Holding
In order to establish a violation of §2607(b), a plaintiff must demonstrate that a charge for settlement services was divided between two or more persons. 626 F. 3d 799, affirmed.
- Result
- Affirmed
The Court's reasoning
The Court said a borrower must show that a settlement-service charge was divided between at least two people to prove a violation of Section 8(b).
The vote
What's next
Lower courts will apply this rule in Section 8(b) cases; borrowers bringing such claims must show the charge was divided between at least two people.
Documents
Opinions
Audio
Docket activity
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AI analysis generated: Case Briefing
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Opinion added: Freeman
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.