03.20.08
Six More MN Title Agencies Closed by Commerce in February
Last month the Minnesota Department of Commerce announced it had taken action against another kickback scheme in which a title insurance agent set up sham affiliated businesses with real estate agents, mortgage originators and developers in order to get around state and federal laws prohibiting direct payments for referrals. The Department shut down six more sham affiliated business by revoking their title insurance licenses. Licenses revoked included: 1st Title, St Louis Park, MN; Timberland Title, Arden Hills, MN; Royal Title, Minneapolis, MN; St. Cloud Title & Abstract, St Cloud, MN and Foundation Title, Brooklyn Center, MN. The final company, Desert Sun Title, did not even have an address or any referral partners. It also fined Premier Title Insurance Agency $175,000 for the kickback scheme.
According to the MN Dept of Commerce enforcement web site, Premier Title Insurance “created and controlled sham Affiliated Business Arrangements (ABAs), employed or contracted with parties not licensed to sell insurance, ABAs sold Fidelity National Title’s policies, unlicensed people were paid commissions, and failed as a supervising agent to ensure that ABA relationships were disclosed..” They also “paid kickbacks or other things of value to its referral partners for the referral of title insurance business and real estate closings.”
Last year, the MN Department of Commerce fined First American Title Insurance Company of Santa Ana, California, $500,000 and shut down 35 of their sham affiliated businesses.