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Sixth Circuit declares AfBA test unconstitutional
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Court Report
Tuesday, December 3, 2013
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The 6th U.S. Circuit Court of Appeals issued a long-awaited decision in the case of Carter v. Welles-Bowen, in which plaintiff homeowners allege they received title insurance services from sham affiliated businesses who provided few substantive services during the transaction, in violation of RESPA. The homeowners’ argument hinged on the U.S. Department of Housing and Urban Development’s 10-factor sham affiliated business test, which was previously held unconstitutionally vague by the U.S. District Court for the Northern District of Ohio.
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