CAPTIVE REINSURANCE LITIGATION STAYED PENDING SUPREME COURT DECISION
A putative class action against HSBC and its affiliates asserting violations of the Real Estate Settlement Procedures Act of 1974 was stayed in part pending the outcome of First American Financial Corp. v. Edwards, a case expected to be resolved this term by the U.S. Supreme Court. The named plaintiff seeks to represent, among others, consumers whose residential mortgage loans were included within HSBC’s captive mortgage reinsurance arrangements. Among other things, plaintiff seeks classwide resolution of whether the captive reinsurance arrangements constituted unlawful kickbacks from the private mortgage insurer defendants. The district court issued a partial stay of the action pending the decision in First American, where the Supreme Court is expected to rule whether a private purchaser of real estate settlement services has standing under Article III of the Constitution to assert a RESPA claim absent a showing that the alleged violation affected the price, quality, or other characteristics of the settlement services provided. McCarn v. HSBC USA, Inc., Case No. 12-375 (USDC E.D. Cal. Apr. 12, 2012).
This post written by John Black.
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