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Title insurance companies settle DC allegations of kickbacks, including yacht parties
Four title insurance companies will pay a combined $3.3 million in fines to settle allegations by the D.C. Attorney General (OAG) of illegal kickbacks to real estate agents in exchange for steering clients to their businesses.
Title insurance is one of the biggest costs home buyers pay at closing. It is required by most lenders to protect against costs from an unexpected property title challenge.
Allied Title & Escrow, KVS Title, Modern Settlements and Union Settlements will pay the District penalties ranging from $65,000 to $1.9 million to settle the allegations. The District will use $1.75 million from the settlements for restitution to affected consumers, which the Office of the Attorney General said it would detail in coming months.
Under terms of the settlement, the four companies agreed to end the practice of giving real estate agents consideration for referral business, and will either cease doing business in the District or divest real estate agents from their ownership interests.
Attorney General Brian Schwalb said investigations found the companies illegally provided real estate agents exclusive investment opportunities in their companies or shell entities. In return for referrals, agents received kickbacks in the form of a split of the profits. The OAG also said Allied compensated agents with yacht parties on the Chesapeake Bay to incentivize future referrals.
