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March 09, 2009

RESPA: “It’s my closing and I’ll close how I want to.”

Hopkins v. Horizon Management (4th Cir. December 3, 2008). In the five states subsumed by the U.S. Fourth Circuit--Maryland, Virginia, West Virginia and the Carolinas--a bank can exercise control over the sale of its properties by having the same title company perform all of the bank's real estate closings without violating Section 9 of federal Real Estate Settlement Procedures Act, 12 U.S.C. 2608, 2601-2617. A contract for sale that forces a buyer to use a particular title company is enforceable so long as the bank foots the bill for the owner’s title insurance. Although Hopkins is an unpublished opinion, this interpretation of RESPA's Section 9 will likely stick for these five states; it can also be expected to be followed in other states and circuits.

Note: Arlington, Virginia-based Robert E. Bodine recently became of counsel to Hull McGuire.

Posted by Rob Bodine at March 9, 2009 11:13 PM


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