02.12.08
Another Class Action Lawsuit against Title Underwriters
A recent lawsuit out of NY alleges that the four dominant title underwriters illegally fixed prices and paid illegal kickbacks to individuals or firms to recommend their services to consumers in specific violation of Federal Law under RESPA. It states that examinations of title insurers’ financial statements have revealed millions of dollars spent on gifts, auto expenses, and travel and entertainment expenses paid to real estate agents and mortgage brokers in return for referrals. and that the rates submitted by the title insurance companies also overcharged consumers because they concealed the illegal referrals and kickback payments that make up much of the cost of a title policy.
In addition, a District Judge has certified a class action lawsuit from Pennsylvania against Commonwealth Land Title. The suit is the second one approved in just days in federal courts on behalf of homeowners who claim they were overcharged for title insurance policies after they refinanced their home loans. In this specific case, homeowners claim they were never told they should have qualified for discounted re-issue pricing on refinance policies.
Does your underwriter have a filed rate for either a substitution loan or a re-issue rate that you should be using?
According to The Wall Street Journal, a report by the Government Accountability Office found that at least six states, including California, Colorado, Florida and New York, have targeted alleged kickbacks and payments by title insurers to agents and others. Since 2003, title insurers, their agents or affiliates have paid more than $100 million in fines, penalties and settlement money in cases brought by state and federal regulators.