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Hi Fools!

Some of you may remember a while back when I brought the news to the boards that the 7th Circuit Court of Appeals (Illinois, Indiana and Wisconsin) decided that it was OK for LENDERS (as opposed to brokers) to "mark up" service fees for profit...

Later we got a new Secretary of HUD... Mel Martinez... who said "Whoa baby!!! We at HUD have ALWAYS said marking up service fees on loans was illegal in all cases, and we're not about to let it creep in for the LENDERS now!"

Well... guess those who deem they know better have decided that borrowers in the 7th Circuit (IL, IN, and WI,) are just gonna have to suck it up & suffer the courts decision versus HUD.

Here's the newest poop;
(As reported by Flagstar, a national discount wholesale lender,)
Feds Tell Examiners to Ignore HUD Ban
Federal banking regulators are telling examiners to ignore the Department of Housing and Urban Development's prohibition on markups of settlement fees in the three states bound by a 7th Circuit Court of Appeals ruling in Echevarria v. Chicago Title and Trust Co. "Within the Seventh Circuit, the Echevarria decision must now be applied," according to "Inter-Agency Guidance on Settlement Service Mark-Ups under the Real Estate Settlement Procedures Act." Therefore, examiners "should not cite violations" of HUD's prohibition on markups involving real estate transactions in the states of Illinois, Indiana, and Wisconsin, the guidance says. Under HUD's interpretation, a financial institution that marks up the cost of an appraisal, credit report, or other third-party settlement fee without providing any additional service is in violation of RESPA's prohibition on fee-splitting. But the appeals court in Chicago has ruled twice that fee-splitting involves two parties, and markups by one settlement provider do not violate RESPA. "The guidance is essentially telling examiners to ignore HUD's interpretation in the Seventh Circuit," according to Steven Kaplan of Washington law firm Kirkpatrick & Lockhart.

Now, aren't you glad these folks are paid with our money?

I say force EVERYONE to fully disclose, or require NOBODY to, and let the public compare in an open and equal environment! Get OUT of the way of commerce, and stop spending OUR money double and triple crowwing back & forth!

Dave Donhoff
Free-Market Mortgage Fool
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