The real estate market in the United States is teetering on the edge of uncertainty as homebuyers and sellers await a verdict in the billion-dollar class-action lawsuit against major banks. The lawsuit claims that the banks violated the Real Estate Settlement Procedures Act (RESPA) by illegally charging fees and costs to homebuyers and sellers.
At stake is possibly up to $20 billion in overcharges that the banks allegedly charged to their clients. This is the largest potential verdict in a consumer class-action lawsuit. If the court rules against the banks, it will open the door for millions of homebuyers and sellers to receive compensation for the extra fees they were charged.
The lawsuit was filed in 2016, and since then, it has grown to include more than 450,000 plaintiffs who are represented by lawyers from several different states. The defendants represent some of the largest names in retail-banking: Wells Fargo, Bank of America, CitiGroup, and JPMorgan Chase.
The focus of the lawsuit is the practice of “kickbacks” which the banks would allegedly give to real estate brokers and title companies in exchange for referring business. This is an illegal practice under federal law. The alleged kickbacks are fees and other costs that the banks charged to customers for services that they did not receive any benefit from. The lawsuit claims that these kickbacks drove up fees and costs paid by homebuyers and sellers by as much as $20 billion.
The case is now entering its fifth year, and attorneys on both sides are working hard to convince the court that their version of the facts is correct. The stakes could not be higher, and homebuyers and sellers must wait to see what the outcome of this case will be.
If the court rules in favor of the plaintiffs, it could open up a massive amount of financial relief for those who have been overcharged. It would also send a message to banks and other financial institutions that illegal practices of this nature will not be tolerated. On the other hand, if the court rules in favor of the defendants, it could mean billions of dollars in losses for those involved in the lawsuit and bring even more uncertainty to a real estate market already suffering from annual declines.
Only time and the court’s decision will tell what impact this case will have on the real estate market and the wallets of homebuyers and sellers. Until then, the uncertainty continues to linger over the housing market.