After it was investigated by the U.S. Department of Housing and Urban Development (HUD) twice for alleged RESPA violations, Prudential Locations LLC filed a Freedom of Information Act (FOIA) request for HUD’s records concerning the investigations including the identification of the people who submitted complaints against the company. HUD refused to provide identifying information, and Prudential sued. The federal district and appeals courts agreed that HUD was not required to furnish the information because it was protected under a FOIA exemption.
HUD initiated two investigations of Prudential after receiving complaints that Prudential violated RESPA Section 8. The first complaint, received in 2003, alleged that Prudential salespeople were receiving monetary kickbacks for referring business to Wells Fargo Home Mortgage of Hawaii, a joint venture formed by Prudential and Wells Fargo Bank. An article published in the Honolulu Star-Bulletin was enclosed with the complaint. The article stated that agents throughout Hawaii were eligible to win a Mercedes by referring at least $1 million in loans to Wells Fargo, which the author of the complaint argued was a violation of RESPA.
During its investigation, HUD determined that Prudential’s policies were in violation of RESPA, and, in 2005, Prudential entered into a settlement agreement with the agency, agreeing to pay a penalty of $48,000 and stop illegal practices.
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