Editor’s note: The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
Hardy defendants submit additional evidence to support dismissal
Following the recent dismissal of the Texas broker lawsuit filed against the National Association of Realtors® (NAR) over membership requirements—Eytalis v. NAR—defendants in Hardy v. NAR have filed the dismissal as supplemental evidence to support their motion to dismiss the case.
Hardy was filed against defendants NAR, Michigan Association of REALTORS®, Grosse Pointe Board of REALTORS®, Greater Metropolitan Association of REALTORS®, North Oakland County Board of REALTORS® and Realcomp II Ltd. over NAR’s requirement for agents to be members of the organization in order to have MLS access.
This is the same claim made against NAR in the Eytalis case, which was dismissed by Judge Reed O’Connor recently, stating that the plaintiffs “failed to plausibly argue NAR policies constituted an antitrust violation, and denying her the opportunity to amend her claims.”
Hardy defendants say that this dismissal in the Eytalis case demonstrates their case should be dismissed as well, due to the nearly identical complaints.
Similar lawsuits remained pending in Georgia, California and Louisiana.
Compass continues to push against NWMLS
In its lawsuit filed against Northwest Multiple Listing Service (NWMLS) for its use of Clear Cooperation Policy (CCP), Compass recently filed further arguments against the MLS that could present interesting implications for other MLSs.
In the 29-page filing, Compass alleged that NWMLS and the brokers in charge are boycotting any brokers who offer home sellers the option to market a property off the platform.
Compass explained that brokers compete by offering home sellers different marketing plans in all other states and in every other MLS.
“The importance of premarketing is enshrined in federal antitrust agency statements criticizing mandatory submission policies, like NWMLS’s, and the antitrust policy of the real estate broker trade association, which protects office exclusives,” the filing stated.
Early on in the lawsuit, the parties are sparring over a temporary pause in discovery, as a judge decides whether to let Compass’ claims go forward. NWMLS’ response to Compass mostly focused on the technical and procedural aspects of the case, arguing that Compass has misrepresented and misinterpreted federal rules, and urging the judge to allow a “temporary” pause in discovery until the case either moves forward, or is potentially dismissed.
Compass, on the other hand, seems to be looking at the big picture, as it cited the Federal Trade Commission’s (FTC) 1983 Butter’s Report, which explains that “the ability for a homeseller to choose to market a property off the MLS was the only protection of consumers and competition from the anticompetitive mandatory submission rules.”
The report also cites the NAR antitrust policy that “requires that an MLS not prohibit or discourage a member from accepting a listing from a seller preferring to give an ‘office exclusive.’”
loanDepot faces new lawsuit
loanDepot faces a new federal class-action lawsuit accusing the mortgage lender of steering and loan officer compensation violations.
Nathan Johnson v. loanDepot.com, filed in the U.S. District Court for the District of Maryland, alleges that loanDepot operated a “sophisticated, years-long scheme to systemically circumvent and conceal its willful violations of the loan officer compensation laws set forth in the Truth in Lending Act.”
The lender is also alleged to have violated Dodd-Frank regulations by tying loan officer compensation directly to loan terms, which was made illegal following the 2008 financial crisis.
According to the lawsuit, loanDepot “linked the commission paid to loan officers to the rates and fees consumers paid” and concealed this through an elaborate system.
Criminal violations of wire fraud, securities fraud and false statements are also mentioned in the suit.
Fannie Mae faces lawsuit from fired employees
GSE Fannie Mae is now facing a lawsuit from 65 of 100 recently fired ex-employees, requesting reinstatement of their positions, back pay for the time lost at work and other financial relief.
The employees who filed the lawsuit were previously dismissed by the mortgage company for alleged unethical conduct. The employees state in the lawsuit that they attended a Microsoft Teams call with Human Resources where they were all informed at once they were fired for fraud.
The alleged fraud was a misuse of Fannie Mae’s matching gifts program, in which Fannie Mae alleged that the employees colluded with Telugu Association of North America (TANA) and other similar organizations to misuse the funds for personal gain.
The employees claim in their lawsuit that Fannie Mae has not produced evidence of the alleged fraud, and that all charities involved in the company-match program simply supported Indian national, ethnic and cultural programs and were approved by Fannie Mae.
The crux of the employees’ argument is that Fannie Mae violated federal anti-discrimination laws—specifically the Title VII of the Civil Rights Act of 1964 and the Age Discrimination in Employment Act of 1967—as well as breach of employment contract for denying severance and other accrued benefits.
