The justice department filed a lawsuit Thursday against two of the industry's biggest and other California companies alleging they took illegal kickbacks for steering home sellers to a provider of information on hazards such as earth quake and flood risks that are needed for disclosure statements"?

"?The lawsuit was filed in federal court for the central district of California and seeks to recover what it calls "illegitimate profits" generated by "sham" joint ventures(now defunct)."? The lawsuit alleges the real estate companies and Property I.D. set up joint ventures designed to funnel payments of $25 per report- a quarter of the fee paid by home sellers- to the real estate companies in exchange for referrals.

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This is suit is reported to be the first ever by The Department of Housing and Urban Development (HUD) for a RESPA violation. As reported in The Wall Street Journal and Real Law Central, the companies deny wrong doings. Realogy says the hazard reports aren't covered by RESPA, and they believe they acted lawfully in the joint venture. HUD has been investigating this case since 2005.

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I do not think it is our imagination- there has been an extremely aggressive stance taken by the federal government in the recent years in different divisions to challenge the traditional brokerage industry. The DOJ, HUD, SEC, have all enacted suits recently to; (depending on your perspective), better protect the consumer, protect new entrants into the industry, make the industry more competitive, or bring down the traditional power structure of NAR and the MLS's."?

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What is really happening here? Political pressure, are we easy targets, is our industry just too big?"? Of course we endorse any unlawful conduct to end and be punished. However, the recent suits could be construed as nuisance suits, or fishing expeditions, but with huge implications if precedent is set. Could the future be- we are not allowed to offer any advice for a fee or as a part of our service."? Anything we say does have the potential to "hurt" the consumer in the current government thinking. It is not only CBC and 60 Minutes that are looking unfavorably at our industry."? What do you think?

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