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First American Financial Corp. v. Edwards — this US Supreme Court Decision, Due Next Week, Could Change How We Do Residential Real Estate.

Posted By Cliff Tuttle | June 15, 2012

No. 851

Everybody is waiting for the Supreme Court’s decision on Obamacare.  But there are other important cases before the United States Supreme Court. Among them is First American Financial Corp. v. Edwards, Docket No. 10-708.

Scotusblog states the plain English issue of this case as follows:

Whether lawsuits under the Real Estate Settlement Procedures Act, which allows homebuyers to sue banks and title companies when they pay kickbacks for the closing of a mortgage loan, are constitutional if the kickback does not affect the price or quality of the services provided?

Referrals are the lifeblood of residential real estate.  By the nature of the business, settlement services and title insurance companies could not exist without a continuous flow of referrals. How to establish thiswithout violating RESPA is the dilemma. If Edwards prevails, RESPA plaintiffs will not have to prove economic harm from a kickback in order to get into court.

A decision for Edwards by the Supreme Court at this stage would only establish the right to sue.  It would not determine the result on the merits.   That would come after a trial.



CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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