RESPA Cases Are Rising as States Fill CFPB Void

Why It Matters

The surge in RESPA litigation threatens significant financial exposure for mortgage lenders and could reshape compliance priorities across the industry, especially amid high rates and affordability pressures.

Key Takeaways

• State AGs increase RESPA enforcement as CFPB recedes.
• Title company settled $1M Maryland RESPA claim.
• Statute of limitations ambiguity extends potential liability.
• Class certification remains challenging due to transaction variability.
• Lenders urged to tighten referral compliance and seek counsel.

Pulse Analysis

The departure of the Consumer Financial Protection Bureau from active RESPA oversight has created a regulatory vacuum that state attorneys general are eager to fill. In states like Maryland, aggressive enforcement has already produced a $1 million settlement, and similar actions are emerging across the Mid‑Atlantic and beyond. This shift reflects a broader trend of state‑level agencies leveraging their authority to protect consumers, especially as mortgage costs rise in a high‑interest environment.

Legal practitioners highlight two critical nuances that could amplify lenders’ exposure. First, the three‑year statute of limitations for RESPA violations is contested; some courts argue the clock starts at discovery rather than closing, potentially reopening cases from the 2020‑2021 refinance boom. Second, the highly individualized nature of steering and referral arrangements hampers class‑action certification, forcing plaintiffs to pursue separate claims that can cumulatively strain compliance resources. These dynamics compel lenders to reassess historical transactions and fortify documentation practices.

For mortgage institutions, the prudent path forward is a proactive compliance strategy. Companies should audit referral and kickback protocols, ensure any value exchanges meet statutory exceptions, and engage seasoned legal counsel to interpret evolving state guidance. Simultaneously, monitoring related regulatory agendas—such as HUD examinations and pending CFPB rulemakings on data privacy and servicing—will help firms anticipate future enforcement waves. By tightening internal controls now, lenders can mitigate the risk of costly settlements and preserve market credibility amid an increasingly litigious landscape.