Court Opinion

ID: 9495882
Source: CourtListenerOpinion
Date Created: 2023-08-05 16:12:45.602939+00
Date Added: 2024-06-11T17:57:15.187908
License: Public Domain

BERZON, Circuit Judge,
concurring.
In my view, Judge Kleinfeld’s dissent in Schuetz v. Banc One Mortgage Corp., 292 F.3d 1004 (9th Cir.2002), has it exactly right. Yield spread premiums and similar devices violate the anti-kickback provisions of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. § 2601 et seq., because they are payments from the lender to the broker and base the amount of the payment solely on the value of the loan to the lender. “The measure [of the payment] has nothing to do with how much work the broker does.” 292 F.3d at 1015(Kleinfeld, J., dissenting).
There is one reason in addition to those discussed by Judge Kleinfeld for rejecting HUD’s latest view of the meaning of the anti-kickback provision, as applied to FHA loans. As the majority opinion explains, there is a 1% limit on direct origination fees for such loans. It therefore makes no sense to explain the YSP and SRP as spreading out fees that the borrower would otherwise pay up front, because it is not legal to charge those fees up front to the borrower. While I agree with Part III of the opinion that the FHA’s 1% cap does not forbid indirect payments by the lender, it is precisely because they are indirect payments by the lender that they cannot constitute relief to the borrower from higher out-of-pocket costs.
I nonetheless concur in the opinion in its entirety, because Schuetz and Lane v. Residential Funding Corp., 323 F.3d 739 (9th Cir.2003), reaffirming Schuetz, are binding precedent, and I agree that “the facts of Schuetz are virtually indistinguishable from the facts in the present case.”