The COURT REPORT is RISMedia’s weekly look at current and upcoming lawsuits, investigations and other legal developments around real estate.
Fairway Independent Mortgage fined $10 million for alleged redlining
Wisconsin-based Fairway Independent Mortgage Corporation has been under investigation since 2021 due to accusations of redlining (or not lending to residents in communities of color) throughout Birmingham, Alabama.
The Department of Justice (DOJ) and Consumer Financial Protection Bureau (CFPB) announced on October 15 that Fairway has agreed to pay $8 million in fines and $1.9 million in civil penalty money. “Fairway’s unlawful redlining discouraged families from seeking loans for homes in Birmingham’s Black neighborhoods,” said CFPB Director Rohit Chopra.
In the DOJ’s press release, Attorney General Merrick Garland said: “This case is a reminder that redlining is not a relic of the past, and the Justice Department will continue to work urgently to combat lending discrimination wherever it arises and to secure relief for the communities harmed by it.”
In its own press release, Fairway criticized the DOJ and CFPB’s statements as mischaracterizing, continuing to deny allegations of redlining and maintaining their agreement to settle was done “to resolve the matter and curb the further expenditure of resources.”
“The complaint significantly mischaracterizes the matter at issue and appears to be intentionally inflammatory in nature,” said the Fairway press release. “Fairway is disappointed by these statements in the complaint, which suggest bad faith by the part of the government agencies.”
Keller Williams settles class-action suits over scrapped profit-sharing agreement
Keller Williams had previously floated changes to its profit-sharing structure, arguing the current set-up meant it was paying out to alumni who were now directly competing against the brokerage. The plan prompted class-action lawsuits from said agents, alleging it violated contracts.
In May 2024, Keller Williams announced it was abandoning its planned profit-sharing changes, and as of Oct. 2, 2024, an agreement has been reached in the class-action lawsuits.
In a joint filing in the U.S. District Court of Nevada on Oct. 11, 2024, Keller Williams and plaintiffs Eric Mendoza and Jack LeVine (“on behalf of all others similarly situated”) notified the court that they had reached a settlement, though did not elaborate on terms. “The parties expect to file a joint stipulation of dismissal by Nov. 5, 2024,” the filing said.
Mark Spain Real Estate reaches settlement in Phillips lawsuit
Phillips v. The National Association of REALTORS® was one of the many “copycat” lawsuits filed in the wake of Sitzer/Burnett. This one, specific to Georgia homesellers, named smaller companies as well as national brands.
One of Phillips’ defendants, Higher Tech Realty (dba Mark Spain Real Estate), filed a notice of settlement in court of the Northern District of Atlanta on October 16. Terms of the settlement reached by the plaintiffs and defendants have not been disclosed.
Invitation Homes fined by FTC
Invitation Homes is one of the country’s largest firms specializing in buying and then renting out single-family units—a trend that’s prompted proposals for legislative intervention.
On Sept. 24, 2024, the company agreed to a $48 million fine by the Federal Trade Commission (FTC) over documented anti-consumer practices including deceptive pricing, junk fees and failure to ensure properties were up to quality standards.
FTC Chair Lina Khan had harsh words for Invitation Homes in a press release: “No American should pay more for rent or be kicked out of their home because of illegal tactics by corporate landlords. The FTC will continue to use all our tools to protect renters from unlawful business practices.”
North Carolina residents push for eviction and foreclosure moratorium
Following Hurricane Helene, residents of western North Carolina have been left with damaged or outright destroyed homes. On Oct. 14, 2024, Asheville residents gathered outside the Buncombe County Courthouse to demand Governor Roy Cooper and North Carolina Supreme Court Chief Justice Paul Cooper enact an eviction and foreclosure moratorium while the community recovers from the disaster.
Local media reported that 40 eviction filings were on the docket in Buncombe County before Helene hit, and that cases were scheduled to be heard in the wake of the storm. North Carolina Governor Roy Cooper’s office did not commit to a moratorium when asked by the Charlotte Observer.
