TITLE INSURANCE

We are currently investigating Title Insurance companies and their use of “affiliated businesses” to grant illegal kickbacks to lenders and other entities involved in the loan transaction.  If your HUD-1 shows that title fees are being paid to more than one entity you have probably been victimized by your Title Insurance company.  Under federal law (RESPA - the Real Estate Settlement Procedures Act), those involved in the lending business are prevented from giving or accepting anything of value in exchange for business referrals in relation to mortgage loans.  In attempting to “get around” this law some Title Insurance companies have entered into joint ventures with lenders, builders, real estate agencies and others to create small, individual “title companies” to assist in the real estate transaction.  In such circumstances, the Title Insurance company allows for 50% or more of its fees to go to the “affiliated business title company”.  In this way, the Title Insurance company shares its fee with the lender, builder or real estate agent and in return gets their new business.  It is our firms belief that such an arrangement violates RESPA and should result in these fees being returned to the borrower.  If you have been exposed to an “affiliated business” scheme contact attorney Patrick Carreon, carreon@mocalaw.com or call 949.474.3004.