Opinion ID: 3015370
Heading Depth: 3
Heading Rank: 1

Heading: Overcharges

Text: Santiago’s first contention is that there is a cause of action under RESPA Section 8(b) for overcharges because the statutory text so provides and because the HUD Statement of Policy 2001-1 so concludes, and should receive deference.2 GMAC argues that the statutory text prohibits such a cause of action and that deference is not warranted here. The United States, as Amicus Curiae, urges us to defer to HUD’s interpretation, i.e., that, although overcharging is not per se a violation of Section 8(b), it is contrary to the requirement that the cost of a service bear a reasonable relationship to its market value and thus “may be used as evidence of a violation of Section 8 and may serve as a basis for a RESPA investigation.” 24 C.F.R. § 3500.14(g)(2). We conclude, however, that the analysis of the statutory text demonstrates that Section 8 does not provide a cause of action for overcharges. Thus, we need not reach the question of deference. Santiago’s argument is based on his contention that 2 The District Court did not address the overcharge and markup causes of actions separately but instead referred to them collectively. However, because Santiago has alleged two distinct causes of action and because there is both a factual difference in the allegations and a logical difference in the analysis of each cause of action under Section 8(b), it is appropriate to address them separately here. 6 Section 8(b) provides that an overcharge occurs when the settlement service provider charges the consumer a fee, of which only one portion is a fee for the reasonable value of “services rendered.” The other portion of the fee, the amount in excess of the reasonable value, is essentially a fee for “no services rendered” that is added to the fee for “services rendered.” Thus, according to Santiago’s reading, Section 8 applies to overcharges because it prohibits the acceptance of “any portion, split, or percentage of any charge” for the rendering of services “other than for services actually performed.” This parsing of the statute is one that is intelligible only if the parts of Section 8(b) are read separately; if the section is read as a whole, such a meaning becomes absurd. As a whole, Section 8(b) states that no person can accept a fraction of a charge for services provided, unless they have actually provided services. To accept Santiago’s reading would require dividing charges for services provided into “reasonable” and “unreasonable” portions – that is, the portion for “services rendered” and the portion for “no services rendered.” Not only does Section 8(b) not make this distinction, but there is no other language in the body of the statute that instructs how to define the reasonable and unreasonable portions of a charge. Further, Section 8(d)(2) provides for treble damages for violations of Section 8(b). It would be unusual for Congress to provide for treble damages for “unreasonable” charges without any definition of “unreasonable.” Thus, because the plain language of Section 8(b) does not provide for a cause of action for overcharges, it is not necessary for us to reach the question whether HUD’s 7 interpretation warrants deference.3 It is worth noting, however, that the position advanced by the United States as Amicus Curiae is not the same as that advanced by Santiago. Rather, the United States urges only the interpretation set forth by HUD that overcharging may be evidence of a RESPA violation. Whether that interpretation is correct is not at issue in this case, as Santiago is looking to establish that Section 8 3 It is not clear whether it is appropriate for us to consider legislative history to determine whether a statute is unambiguous at this point in Chevron analysis. Compare FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133, 137, 120 S. Ct. 1291, 146 L. Ed. 2d 121 (2000) (considering legislative history at step one of Chevron analysis), with K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 293 n. 4, 108 S. Ct. 1811, 100 L. Ed. 2d 313 (1988)(stating that “any reference to legislative history . . . is in the first instance irrelevant” in step one of Chevron analysis) and Nat'l R.R. Passenger Corp. v. Boston & Me. Corp., 503 U.S. 407, 417, 112 S. Ct. 1394, 118 L. Ed. 2d 52 (1992) (finding only statutory text is relevant for step one of Chevron analysis). However, it is worth noting that the legislative history of RESPA supports the conclusion, above. In 1973, the year before RESPA was enacted, Congress rejected a bill setting maximum amounts on settlement charges, suggesting that the passage of RESPA the following year did not intend that the statute serve as a price control mechanism. See Haug v. Bank of America, 317 F.3d 832, 836 (8th Cir. 2003) (discussing rejection of 1973 bill), Kruse et al. v. Wells Fargo Home Mortgage, Inc., et al., 2004 WL 2008943,  (2d Cir. Sept. 10, 2004) (same). 8 incorporates an actual violation for overcharges. A rejection of Santiago’s reading of RESPA does not necessarily mean that HUD’s interpretation is incorrect. Accordingly, we affirm the District Court’s holding that Section 8(b) does not include a cause of action for overcharges.