A federal trial court has dismissed a lawsuit brought by the Consumer Financial Protection Bureau against a Kentucky law firm accused of violating the Real Estate Settlement Procedures Act’s anti-kickback provision. The court said the title agencies set up by the Louisville firm were permitted under RESPA’s "safe harbor" provision.

Borders & Borders, a law firm that does residential real estate closings, set up joint ventures with nine real estate service providers in Louisville in 2006, according to the court’s opinion. The Title LLCs served as title insurance agencies in real estate closings where the lender did not maintain an internal, lender-owned title agency, the court said.

The Title LLCs issued more than 1,000 title insurance policies from October 2009 to February 2011.

Source: Mortgage Daily