One of the many industry publications I regularly read, the National Mortgage News (formerly National Threift News), had a piece this week on one of the title insurance companies here in California and their troubles with RESPA; this article is only one of probably one dozen or more I have noticed over the last two or 3 months about title insurance companies getting in trouble for some of their marketing (kickback/referral) activities. The tone of those I have spotted, seem to be somewhat shocked that these firms normally violate 'Section 8', in order to get new customer orders!
What surprises me, is that the authorities rarely utilize previous industry experienced people (who have seen it for years) to help them. Title reps have historically (I define 'historically' by the length of my own 40+ years lending career) have provided kickbacks for business, since as far back as I can remember! The RESPA Police busting them in 2006 comes as no shock to me, other than they should have gone after them decades ago.
What surprises me, is that the authorities rarely utilize previous industry experienced people (who have seen it for years) to help them. Title reps have historically (I define 'historically' by the length of my own 40+ years lending career) have provided kickbacks for business, since as far back as I can remember! The RESPA Police busting them in 2006 comes as no shock to me, other than they should have gone after them decades ago.
posted by Secret! at 11:15 AM
2 Comments:
Peter- found your blog with Google blogs doing a search for NMN references.
And as far as Title Insurance, it is the biggest scam and if politicians weren't trained monkeys, they would see that the real issue of 'predatory lending' isn't the odd exploitation of minority/old/disadvantaged persons, but the tack on fees that every borrower has to pay.
And what I am waiting for is for someone to figure out why I the borrower pay for the appraisal, but the appraisal is supposed to protect the lender? If that is the case, the lender should pay for the appraisal.
Thanks Keith. There are a great number of service providers who charge borrowers for their activities, as they relate to residential real estate mortgage loans, most enure to the benefit of the lender ie: credit report, escrow closing services, doc prep fees, flood cert, tax service, etc. The issue with the title insureance people, I referred to was/is this: for my entire 4 decade career title reps have offered/given "something of value" (RESPA Section 8 violation, a Felony!)to mortgage lenders and brokers in exchange for business. They make money hand over fist, so they can afford it!
Guess how many title insurance cliaims I have seen paid in my 40 years? Give up? ONE is the answer.
My next point, they charge borrowers an insurance premiuum up-front at closing the full titte insurance premium for the entire full term of the loan ... when that loan pays off earlier, do they refund the unearned premium, since they STOP insuring that customer. Hell no, they don't. Should they, of course they should.
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