Hello! Welcome to Todd Miller TV. The subject today is “Are Real Estate Brokerage Administrative Fees RESPA compliant?” And you’re probably saying is, “I don’t know what RESPA is and not really sure what this is all about.” But in a Real Estate transaction there’s an act called “The Real Estate settlement Procedures Act.” And what it says is all the rules for what can and can’t occur is part of a Real Estate settlement. So one of the things that is not allowed is for there to be charges on the HUD, they’re not actually part of the Real Estate Transaction in some way. And they have very specific procedures. So there was this very famous case, it was called Freeman vs. Quicken Loans, and what he the person who filed the suite said was “Hey I was charged by Quicken Loans some Admin fees, and it didn’t go to pay down my rate, it didn’t go to get me better rate or interest fee, it was just a fee they charge and they stuck it on the HUD and I’m saying it’s a violation of RESPA.” So actually this case went all the way to the supreme court ’cause RESPA is a Federal Act. And the supreme court decided that the fee/they could charge the fee. So what specifically they said in here and I’ll read this, “The supreme court has made it clear that these fees do not constitute a RESPA violation so long the as fees are not split with a 3rd party who provides no services in exchange for the fee.” This is what that means, Let’s say you got an appraisal, and the lender orders the appraisal, and the lender calls an appraiser and goes “Hey, we need appraisal on the property, lender says it’s a $350 charge to the buyer.” Well then, what the lender does is the lender calls you and goes “Hey, there’s an appraisal, there’s a $450 Appraisal fee” Then they put $450 on the HUD, they take $100, and then the $350 goes to the appraiser. Well they can’t do that because it splits the fee. They have to only charge you the fee. So the question is, can a Real Estate Brokerage charge the Admin fee? And with this case the Supreme Court determined Yes, they can charge an Admin Fee. You can actually be charged for anything in the HUD as long as it does not split to a 3rd party who doesn’t do anything for the Service. The suit is called “Freeman vs. Quicken Loans” it was class action suit. I read about it in Realtor Magazine. It was in the August issue of the Realtor magazine. And it even says in here, it says that nothing in the ruling says that brokers cannot charge administration fee. So you’re probably wondering ‘Well, why is this important?” Well you probably notice that it’s now very common. Maybe not so much in the past. Especially here in Las Vegas. We charge Admin fees. Why do we do this? Well that average sale price is really low. The average commission is really low. It’s very difficult to split a commission with an agent and for Real Estate company to make any money. So we have to pay for all our expenses and we charge admin fees on every transaction. Almost every company here in Las Vegas charges the Admin Fee. Our company charges the admin fee. The amount depends on the price of the house, you know, if it’s/and everything. So, I just thought I’d share that with you. It’s a supreme court ruling, said that Real Estate Brokers, Loan Brokers, etc. could charge admin and fees like that on the HUD. Thought I would share that with you, I guess you could call that the legislative update. Anyway, so that’s my update for today and hope to see you on another video. Thanks!