The U.S. Supreme Court agreed to clarify the scope of a federal law aimed at protecting mortgage customers from being overcharged by companies that provide real estate settlement services.
On Tuesday the court accepted an appeal from a group of Louisiana mortgagors seeking to sue Quicken Loans over fees they paid at their mortgage closings, according to a report by Bloomberg.
The homebuyers say Quicken, a top ten ranked lender, charged as much as $1,100 in "loan discount fees" without providing the interest rate reduction those fees typically bring.
The fight at the high court centers on a provision in the 1974 Real Estate Settlement Procedures Act that bars settlement providers in at least some cases from collecting money for services they did not perform.
The question for the justices is whether that provision applies only when two companies split the disputed fee, as in the case of a kickback.
A New Orleans federal appeals court adopted that reading of the statute in throwing out the suit against Quicken, putting it at odds with other courts around the country.
The White House urged the Supreme Court to accept the homebuyers' appeal and overturn the lower court ruling.
