The United States Supreme Court has ruled unanimously in favor of Goodwin Procter client Quicken Loans, Inc. in a lawsuit involving interpretation of the Real Estate Settlement Procedures Act (“RESPA”) in a dispute over lending fees.
The plaintiffs had argued that RESPA prohibited mortgage providers from charging “unearned fees.” In a unanimous opinion, the Court disagreed: “Vague notions of statutory purpose provide no warrant for expanding §2607(b)’s prohibition beyond the field to which it is unambiguously limited: the splitting of fees paid for settlement services.”
The Court’s decision in Freeman v. Quicken Loans was a substantial victory for Quicken Loans that also has significant implications for the mortgage industry, nullifying multiple suits mortgage settlement service providers have faced over the last decade.
In a statement released following the May 24 ruling, Quicken Loans said it was pleased with the verdict. “Quicken Loans has won this case at every step and in every court – the U.S. District Court in New Orleans and the U.S. Court of Appeals for the Fifth Circuit – and now before the U.S. Supreme Court. Although we always believed that we were on the right side of the law, it is especially gratifying to have the affirmation of the highest court in the country.”
The Goodwin team that represented Quicken Loans before the U.S. Supreme Court was led by Tom Hefferon, chair of the firm’s Consumer Financial Services Litigation practice and co-leader of the firm’s Litigation Department in Washington, D.C., Bishop Sheehan, head of the firm’s Appellate Litigation Practice, and Kevin Martin, who served as law clerk to Justice Scalia, also helped spearhead the effort. Goodwin was hired as Quicken Loan’s U.S. Supreme Court lead counsel after the U.S. Court of Appeals for Fifth Circuit affirmed lower court rulings. Goodwin briefed the case, which Hefferon argued, in his first appearance before the Supreme Court, on Feb. 21, 2012.
Founded in 1985, Quicken Loans is the nation’s largest online home lender and the fourth-largest retail lender. Employing more than 4,000 people, Quicken closed a company-record $30 billion in home loans in 2011.