First American in $5 Million Settlement
|November 19, 2007|
WASHINGTON (AP) -- A First American Corp. title insurance subsidiary will pay $5 million to settle federal and state allegations that it gave kickbacks for new business, federal and state officials said Friday.
The Santa Ana, Calif.-based company settled with the U.S. Department of Housing and Urban Development and Florida insurance and banking regulators, the agencies said in prepared statements.
They alleged the company's First American Title Insurance Co. unit illegally used Florida-based title insurance agencies created by the company solely to pay mortgage brokers, banks and homebuilders for referrals.
Title insurance protects homeowners and lenders against unknown claims or liens on property. The company has agreed to shut down 84 partnerships as part of the settlement, HUD said.
"Our joint investigation found these partnerships were created to generate referrals in violation of (real estate settlement law and) policies against sham affiliated business arrangements," Brian Montgomery, HUD's assistant secretary for housing, said in a statement.
A spokeswoman for First American couldn't immediately be reached for comment.
Earlier this month, New York Attorney General Andrew Cuomo sued company's eAppraiseIT subsidiary, accusing it of caving in to pressure from Washington Mutual Inc. to use a list of "proven appraisers" who he claims inflated home appraisals. The company has denied the allegations.
Copyright 2007 Associated Press