Florida probes alleged kickbacks at 50 companies
Friday, February 25, 2005
Florida regulators are investigating more than 50 title insurance companies for alleged illegal referral fees and other improper practices in a growing national scandal over title insurance kickbacks.
Florida's Department of Financial Services is investigating 50 title insurance companies for alleged referral incentives that violate both Florida statutes and the federal Real Estate Settlement Procedures Act, said Dean Andrews, a senior attorney with the department.
Illegal incentives paid to real estate agents to steer insurance their way have become an "epidemic," Andrews said.
The Florida news comes on the heels of similar developments in California and Colorado. California's Insurance Commissioner, John Garamendi, Wednesday announced an investigation into alleged title insurance kickback schemes in that state.
Last week, First American Title Insurance Co. agreed to refund about $24 million to consumers nationwide while under investigation by the Colorado Department of Insurance. Fidelity National Financial, under investigation in California, has discontinued the reinsurance agreements that came under scrutiny.
Kickbacks are so common in Florida's title insurance and real estate industries they are considered everyday business practice, Andrews said.
The practices under investigation include:
Paying advertising costs to advertise and promote the listings of Realtors and/or real estate salespersons; sponsoring and hosting or paying for the sponsoring and hosting of open houses for Realtors and/or real estate salespersons; and entering into affiliated business arrangements in an attempt to provide kickbacks to builders, Realtors and/or real estate salespersons or mortgage brokers.
Andrews said he couldn't name the agencies his agency is investigating.
"We're investigating title insurance agencies that are licensed by the state of Florida. We are not permitted by law to reveal matters under active investigation," Andrews said.
Wally Senter, formerly Florida's top title insurance regulator until his 2002 retirement, told the Tampa Tribune that until the state starts disciplining real estate agents and brokers for demanding and accepting incentives, the practice will continue.
While in office, Senter told the Tribune, he warned title insurance company executives not to engage in compensating real estate agents and brokers for sending business that way. "I told them, 'you better not get in bed with the Realtors. It will be never-ending.'"
***
Send tips or a Letter to the Editor to janis@inman.com or call (510) 658-9252, ext. 140.
No comments:
Post a Comment