HUD Archives: News Releases

HUD No. 05-151
Brian Sullivan
(202) 708-0685
For Release
October 31, 2005

Agreements follow earlier settlement against Metropolitan Title Company

WASHINGTON - The Department of Housing and Urban Development today announced separate settlement agreements totaling $80,000 with four Detroit area real estate brokers for violations of the Real Estate Settlement Procedures Act (RESPA). The settlements announced today follow a related agreement this summer with Metropolitan Title Company which HUD determined paid these real estate brokers for the use of conference rooms at rates substantially higher than their fair market value.

HUD reached agreements with the following real estate brokers in the Detroit area: RE/MAX Masters; RE/MAX in the Hills; Hometown One Associates (doing business as Remerica Hometown One); and, Schweitzer Real Estate, Inc. (doing business as Coldwell Banker Schweitzer Real Estate). In each case, HUD determined that these brokers received conference room rental fees from Metropolitan in excess of the general market rate for comparable room rentals.

While charging or paying room rental fees does not necessarily violate RESPA, the excessive charges and payments made in these circumstances were designed to disguise referral fees that violate the anti-kickback provisions of law. Section 8 of RESPA prohibits a person from giving or accepting anything of value in exchange for the referral of settlement service business.

"Whether you give or whether you receive a thing of value in exchange for the referral of business, it's against the law," said Brian Montgomery, Assistant Secretary for Housing-Federal Housing Commissioner. "RESPA speaks to both sides of this equation and HUD, for its part, will vigorously enforce the law when it comes to controlling kickbacks, whether you pay or whether you're paid."

Last July, HUD reached a settlement with Metropolitan Title Company for paying excessive hourly rates to lease conference rooms from real estate brokers. HUD investigators researched the general market value of conference facilities in the Detroit area and found the average hourly rental of comparable rental space was much lower than what Metropolitan paid to these brokers. Following the investigation of Metropolitan, HUD then pursued real estate brokers who benefited from these payments.

The four real estate brokers agreed to make the following payments to the U.S. Treasury as a result of the settlements announced today:

RE/MAX Masters
$ 8,000
RE/MAX in the Hills
Remerica Hometown One
Coldwell Banker Schweitzer

To read the settlement agreements announced today, visit HUD's website.

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development as well as enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and


Content Archived: May 04, 2010