California Real Estate Fraud Report

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04
Feb

Fidelity National Title fined by HUD for RESPA kickbacks; brokers face class-action lawsuits

Two real estate businesses could be in hot water, according to this article in RE-Insider.

Fidelity National Title Insurance marketed their TransactionPoint program to brokers. This was a “pay-for-click” system that made it possible for brokers to generate revenues for settlement services.

The problem, according to HUD, is that this form of revenue enhancement falls under RESPA kickbacks violations and the agency just fined Fidelity $4.5 million. A second settlement was also reached between the California Department of Insurance and Fidelity National Title Insurance over allegations of illegal kickbacks that were paid out from 2003 to 2011.

RESPA is an abbreviation for the Real Estate Settlement Procedures Act. It is federal law and those found in violation could face stiff financial penalties, loss of their licenses to conduct their businesses and time in federal prison.

RE-Insider wanted to know if any of the money Fidelity made from these deal was used to indemnify brokers who participated in the TransactionPoint program and what the names of the brokers were.

Two of the brokers are now identified, as the La Jolla based law firm, Bottini & Bottini, filed two class action lawsuits on behalf of homeowners in the past month naming over ten individuals at Alain Pinel  and Pacific Pinnacle  for violation of California Civil code 1710 (3), California Business and Prof. Code 17200, fraud and others. Of course, there could be more names coming to the surface.

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The information and notices contained on The California Real Estate Fraud Report are intended to summarize recent developments in real estate fraud, mortgage fraud, short sale fraud, REO fraud, appraisal fraud, loan modification scams, loan modification fraud and other real estate related crimes occurring in Los Angeles and California. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about real estate fraud, mortgage fraud and appraisal fraud matters or who believe they require legal counsel should seek the advice of an attorney.

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