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In this case, the amounts paid to the title company by the title insurance underwriter were beyond the commission structure outlined in the agent contract, were not reasonable compensation for services actually performed, and were not a return on an ownership interest. The title company also failed to properly notify consumers of their financial interest in the underwriter and illegally benefited from the referrals made to the underwriter. Affiliated business arrangements like this are legal under RESPA, so long as there is a written disclosure provided to the consumer explaining the financial or ownership relationship, the charges or range of charges of the affiliated entity, and notification that the consumer is not required to use the affiliated business. This disclosure was not provided.
As a result of this action, the title company must redress consumers by paying up to $1.25 million, enact and seek CFPB approval for a Compliance Plan, and ensure ongoing oversight for RESPA compliance, among other requirements.
Read the Consent Order for more information.