Connecticut is located in the federal Second Circuit, and as such is governed by the rulings of the U S Court of Appeals for the Second Circuit. The most recent case I have seen within this circuit that deals with RESPA and mark ups is Kruse V. Wells Fargo Home Mortgage, Inc., (No. 03-7665, 2nd Circuit, Sept. 10, 2004). It was a the subject of an excellent article on the ALTA web site dated September 14, 2004. I invite all interested parties to read it. It seems to address many of the concerns voiced here, and breaks the "legal jargon" down into English.

There appears to be a split of authority as to whether RESPA Section 8(b) applies to mark ups by settlement services for their own services. The Second Circuit seems to take the view that it does not. The Eleventh Circuit in the case of Sosa V. Chase Manhattan Corp., 348 F3rd. 979 (11 th Circuit 2003) appears to take a similar position. The courts of the Fourth, Seventh and Eighth Circuits appear to take an opposing view. There is a lack of uniformity in the interpretation and application of RESPA which makes the various appellate court rulings a prime target for review by the U S Supreme Court in order to gain uniformity throughout the Circuits. I have also been told that RESPA is undergoing reform which may deal with the problem before the courts do.

It would appear that whether RESPA Section 8(b) prohibits settlement service mark ups depends on the circuit in which these settlement companies are located and the definition of "their own services." Do their services involve a finder's fee for their efforts to link the borrower to an abstractor or signing agent for which they are entitled to payment in addition to the abstractor's or signing agent's fees? Good question. Who knows at this point? It needs further interpretation by the court or clarification in a redraft of Section 8(b). Part of the problem appears to be with the definition of "unreasonable overcharges". The Second Circuit has taken the position that the language of RESPA in vague in this respect.