Fidelity Pays Fine and Refunds to Customers in Florida
More tips on RESPA law, guidelines and violations for real estate agents and loan originators from former HUD investigator and RESPA expert, Dr. Gary Lacefield.
This week’s video covers the refund of $2.2 million by Fidelity National Title Insurance Company to 10,000 customers in Florida. The refund program was the result of the Department of Financial Services’ investigation of illegal referrals to title agencies for business. Fidelity will also pay a fine of $1 million.
View the RESPANewsUpdate.com video here. This educational video and the RESPANewsUpdate.com website were created by WebCasting.com, based in Dallas, Texas. This video is provided for free, compliments of Premier Mortgage Funding, Inc.
For more about Dr. Lacefield, visit RiskMitigation.net or GoGetRealEstate.com/Get/GLacefield.
No Phones + No Employees = Sham Operation
Tom Gallagher, Florida’s chief financial officer, announced that approximately 10,000 Central Florida residents will soon benefit under a $2.2 million refund program agreed to by Fidelity National Title Insurance Co. The refund program was the result of the Department of Financial Services’ investigation of illegal referrals to title agencies for business.
Under the refund program, Fidelity National Title customers who paid for title insurance provided by one of 60 title agencies in Central Florida will receive 30 percent of the title insurance premium paid at the time of closing within the next 120 days. A list of the 60 title agencies is attached. Gallagher said that Fidelity National Title Insurance Co. cooperated with the department to establish the refund program.
The company also paid a $1 million fine and agreed to terminate its relationships with title insurance agencies that received illegal payments for referrals of title insurance business. Bogus affiliated business arrangements were set up to funnel the improper payments.
In addition, Gallagher is taking action to revoke the licenses of the 60 title agencies involved in these illegal arrangements. Investigators with the department’s Division of Agent and Agency Services said the sham entities did not have separate telephone lines or offices, did not have full-time employees, and business operations were in name only.
Title insurance companies and agents are barred under state and federal laws from entering into illegal affiliated business arrangements in an attempt to funnel improper payments to builders, real estate agents or mortgage brokers. They are also barred from providing payments and providing other things of value to real estate agents, mortgage lenders and builders in exchange for business referrals. Illegal inducements include direct payments, free advertising, paying for office equipment, and gift certificates.
Last year, Gallagher issued a warning to the industry against engaging in illegal kickback arrangements. Gallagher said that his office is currently investigating all title agencies for similar practices. Fidelity National Insurance Co. is the first to reach a settlement with the department.
For a list of the other 59 Agencies involved in the investigation and for a copy of the settlement agreement, email