First American vs Snap NHD

It seems that SnapNHD may have put itself, the brokers, and agents who sell their product in potential hot water with the Court and, in turn, with the clients who received “their” report.

We received a Complaint entitled First American Professional Real Estate Services v. SnapNHD, et al.

First American is suing SnapNHD (First American Professional Real Estate Services v. SnapNHD, et al.) over multiple FRAUD allegations that include duping consumers and the real estate community as a whole.  First American alleges that SnapNHD impersonated real estate agents online, ordered First American NHD reports, copied the reports, and then misrepresented and sold them as official SnapNHD Reports.

Along those same lines, and of even greater concern, is that First American alleges these tainted reports were also wholesaled to brokerages that put their own name on the reports containing the allegedly stolen data.  As a side note, the practice of buying wholesale NHD reports that are then sold as the work product of the broker is called “White Labeling”.  Brokers put their label on the purchased reports and sell them for a higher price to their clients. Is this lawsuit inviting the CFPB to look into this practice for a possible RESPA violation?

The list of frauds that SnapNHD allegedly committed against First American, the Real Estate Community, and the public, in general, is long and includes copyright infringement, conversion (stealing), and lost business revenue.  First American has asked that all SnapNHD reports that were sold with misappropriated information be “recalled and destroyed”.  That could be very embarrassing for an agent and even worse for all of the brokers who put their good names on the allegedly misappropriated reports.

So what are the possible ramifications to consumers and real estate agents if these actions prove to be true? Here are some questions we have:

-Is an NHD report that contains misappropriated or stolen information valid?

-If the report is found to be invalid, could it have been relied upon or is a new report necessary?

-If the NHD report must be recalled and destroyed, is the information relied upon to make the real estate purchase still valid?

– If the report is recalled and destroyed and new report issues, can a buyer get out of the deal?

– Does a real estate agent need to go to their clients and pick up the report to prove destruction?

– How would SnapNHD go about proving that a report did not use stolen information?

– Is an agent liable for breach of fiduciary duty by using a tainted SnapNHD report?

– Is an agent liable for negligent referral when her broker had her use the tainted White Label report?

– Is a broker liable to their agents for forcing them to use their “White Label” NHD report containing stolen information?

– Can a broker be held liable for misrepresentation if they did not disclose that their “White Label” NHD report was really a SnapNHD report, or in this case, a First American report?

What do YOU think? Let us know.

First American Professional Real Estate Services, Inc. v. SnapNHD, LLC et al