Industry News

Property I.D. sues to get HUD off its back

Says hazard disclosure reports not covered by RESPA

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Property I.D., a company that shared the profits it made providing natural hazard disclosure reports to home buyers with real estate brokers, says it's filed suit to end a nearly two-year-long investigation of the company's business practices by federal regulators. The investigation of Property I.D. dates to August 2005 when officials at the Department of Housing and Urban Development and the Federal Trade Commission notified the company's partners in a joint venture -- Cendant and Coldwell Banker Residential Brokerage Corp. -- that they were looking into whether the arrangement violated the Real Estate Settlement Provisions Act, or RESPA. In its suit against HUD, Property I.D. maintains that natural hazard disclosure reports are not subject to RESPA requirements because they are not settlement services. California and some other states require that sellers provide natural hazard disclosures for properties located in areas known to be prone to flooding, fire, earthquake or landslides. ...