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Article: Is Your Joint Venture a Sham in the Eyes of HUD? - As Seen Through the Real Estate Settlement Procedures Act.
- Article from:
- Mondaq Business Briefing
- Article date:
- December 1, 2004
CopyrightCOPYRIGHT 2004 Mondaq Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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By Tara K. Gorman (Washington, D.C.)
Originally published November 22, 2004
Does creating a joint venture between a mortgage company and a title company (Joint Venture) violate the Real Estate Settlement Procedures Act of 1974 (RESPA)? In order to avoid violating RESPA there are several elements that must be considered when creating and operating a joint venture. To determine whether an entity is a bona fide provider or a "sham controlled business arrangement," HUD has indicated, through various regulations and advisory opinions, that HUD considers 10 elements and weighs them in light of the specific facts. This article will address these elements and ...