Secretary Martinez has announced that as part of the Department's initiative on enforcement of the Real Estate Settlement Procedures Act (RESPA), HUD has entered into settlement agreements resulting in more than $2 million in payments for violations involving illegal kickbacks and referrals.
"These cases demonstrate HUD's determination to enforce RESPA and to stop illegal referral fees and unearned fees that may ultimately raise the price that unsuspecting families pay for their homes," Martinez said.
The $2.25 million in settlements will go to consumer housing counseling and education, refunds to homebuyers, and payments to the government. The settlements include agreements with The First American Corp. and Transamerica Corp., providers of flood determination and tax settlement services to hundreds of lenders throughout the country; Conseco Finance Corp., one of the nation's largest lenders; ARVIDA/JMB Partners, a large Florida builder; and Central Pacific Mortgage Corp., a national home lender. The companies cooperated in HUD's investigations and entered into the settlements to resolve the findings of HUD's investigations.
RESPA requires disclosures to homebuyers of settlement costs and provides protections to homebuyers during the process of settlement of a mortgage loan. Section 8(a) prohibits kickbacks and referral fees among settlement service providers and section 8(b) prohibits the charging of unearned fees for settlement services. Section 9 prohibits requiring the use of a particular title company.
"Settlement service providers have a right to be reasonably compensated for their services. They don't have a right to collect illegal kickbacks and unearned fees," said Martinez. "American families shouldn't be overcharged for mortgage services and HUD will continue enforcement action against these abuses."Read full details of the settlements.
The 2001 Combined Federal Campaign has been extended in HUD Headquarters, the Washington DC field office, and in many HUD offices across the nation. The theme for the 2001 campaign is "Caring is Sharing," but HUD has far to go to meet our goal. More than 3,000 charitable organizations will benefit from the 2001 CFC, and Secretary Martinez urges every HUD employee to find an issue that touches them, and make a difference by supporting the charity - or charities - of their choice.
President Bush, speaking last week at SOME (So Others Might Eat), where he and Secretary Martinez announced $1 billion for homeless programs, reminded us that:
"...A neighbor in need needs to be helped. We need to constantly figure out ways to reach out and help somebody who may not be as fortunate as we are.… We must always remember there are people who hurt in our society. And we will always remember, with blessings come the responsibility to help those in need. …
"I have been disturbed by reports that charitable giving has dropped off. I hope Americans will not substitute the gifts they've given in the aftermath of September 11th for neighborhood groups such as SOME, or mentoring programs, or programs that understand that when you change a person's heart, you can change their life for the better, that faith is such an integral part of our society, and faith is such an integral part of helping people help themselves. …
"The generosity of this country will say to the world that we're a nation that will not be affected by terror and evil. That, in fact, we encourage good to overcome evil through our actions and deeds; not just our bravado, not just our waving of flag, but true actions and true compassionate acts of giving in order to make sure this nation remains whole and strong and complete…."
Secretary Martinez, also speaking at SOME, said:
"Time and time again we've experienced our country's great generosity when fellow Americans are in need - and this is a perfect time to show our support for local charities and community caretakers who serve the homeless."
Please give to the 2001 Combined Federal Campaign - in Headquarters and field offices across America. Your country needs YOUR help!