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The Kickback Accusation Against CrossCountry Mortgage
CrossCountry Mortgage is currently under scrutiny in a lawsuit alleging illegal kickbacks with Raleigh Realty. The allegations surface as CrossCountry seeks to have the case dismissed, asserting that it falls outside statutory limitations and lacks sufficient evidence of any wrongdoing.
The lawsuit was initiated by homebuyer Jeremiah VonBlohn, who claims his Realtor directed him to CrossCountry under a comarketing agreement that embedded the lender's details prominently on Raleigh Realty's website. This allegation captures attention because, if true, it raises serious questions about how clients are steered toward higher mortgage rates.
Understanding the Legal Framework
Central to the plaintiffs' claims is the Real Estate Settlement Procedures Act (RESPA), designed to ensure transparency and fair competition in real estate transactions. Under RESPA, it is illegal for lenders to engage in practices that steer borrowers towards higher fees or rates. However, CrossCountry argues that their co-marketing arrangement falls within the law’s parameters, as they compensated Raleigh Realty for legitimate digital marketing services rather than for referrals alone.
The Positions of Both Parties
The lender’s defense team argues that there is no evidence showing that VonBlohn was overcharged or harmed by the arrangements. They further claim the case is time-barred since VonBlohn’s mortgage closed more than a year before the lawsuit was initiated. This strikes at the heart of the plaintiffs' case as they seek compensatory damages.
Recent filings indicate that CrossCountry has not yet responded to the other active lawsuits from additional borrowers who share similar claims. This leads to questions of whether a systematic issue may exist across their lending practices.
The Wider Implications for Real Estate Agents
For real estate agents, the outcome of this case could have significant implications. If CrossCountry’s practices are deemed illegal, it may lead to tighter regulations on marketing agreements between lenders and real estate firms, thereby altering how agents promote mortgage services. Agents must remain vigilant and ensure compliance with RESPA guidelines to avoid potential legal exposure.
Current Status and Anticipated Outcomes
The case is still pending in the U.S. District Court for the Eastern District of North Carolina, with motions and responses scheduled over the next few months. As the situation develops, it will be critical for stakeholders in the real estate industry to monitor its progress and outcomes closely.
Take Action to Stay Informed
Real estate agents should prioritize compliance with RESPA and stay informed about the evolving landscape surrounding mortgage practices. Join your local real estate association to access resources, education, and updates on industry regulations.
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