Minnesota has fined First American Title Insurance Company Five Hundred Thousand dollars for paying illegal commissions to real estate agents for steering prospective clients to their title insurance products. The act of paying agent for referrals is illegal in the state and First American is having to pay a severe financial penalty and also close 35 joint venture offices.
While the harm to consumers is hard to quantify, the cost of title insurance these days has these commissions being a major part. Title Insurance has become a hot topic in the real estate world as the ability for consumers to get online and see what pricing is available has changed the dynamic of this opaque industry and made consumers aware of pricing issues that arise.
Commerce Department officials released information on recent actions it’s taken against title companies and said several more cases remain under investigation. In the largest action, the agency ordered Santa Ana, Calif.-based First American Title Insurance Co. to shut down 35 joint venture title companies in Minnesota and pay the state a $500,000 civil penalty.
First American’s joint ventures were shams that violated state law and the federal Real Estate Settlement Procedures Act, or RESPA, Commerce officials said.
The action is the result of a yearlong investigation the Commerce Department has been conducting into title schemes, assisted by a U.S. Housing and Urban Development investigator. Several more actions will be taken in coming months, said Paul Hanson, chief examiner for Commerce. via the St. Paul Pioneer Press
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Wow! This is the first I heard of this. I have been following the Coldwell Banker case, but this beats that. Read my blog about it.
What about all the agents that took the bribes. Any fines for them?
So shady!
Frank
Blog.Franklyrealty.com