GALLAGHER ANNOUNCES $2.2 MILLION IN REFUNDS TO TITLE CUSTOMERS IN CENTRAL FLORIDA
Tom Gallagher, Florida’s chief financial officer, announced that approximately 10,000 Central Florida residents will soon benefit under a $2.2 million refund program agreed to by Fidelity National Title Insurance Company. The refund program was the result of the Department of Financial Services’ investigation of illegal referrals to title agencies for business.
“The recent housing boom in Florida is a big component of our state’s recent economic success,” said Gallagher, who oversees the department. “This office will continue to do everything it can to keep our economy growing, and protect Florida homeowners during the process of purchasing a home.”
Title insurance is required by mortgage lenders to protect themselves and the homebuyer from property ownership disputes.
Under the refund program, Fidelity National title customers who paid for title insurance provided by one of 60 title agencies in Central Florida will receive 30 percent of the title insurance premium paid at the time of closing within the next 120 days. A list of the 60 title agencies is attached.
Gallagher said that Fidelity National Title Insurance Company cooperated with the department to establish the refund program. The company also paid a $1 million fine and agreed to terminate its relationships with title insurance agencies that received illegal payments for referrals of title insurance business. Bogus affiliated business arrangements were set up to funnel the improper payments.
Simultaneously, Gallagher is taking action to revoke the licenses of the 60 title agencies involved in these illegal arrangements. Investigators with the department’s Division of Agent and Agency Services said the sham entities did not have separate telephone lines or offices, did not have full-time employees, and business operations were in name only.
“We will continue to aggressively investigate and take severe action against title agents and agencies involved in these unethical and illegal arrangements,” said Gallagher.
Title insurance companies and agents are barred under state and federal laws from entering into illegal affiliated business arrangements in an attempt to funnel improper payments to builders, real estate agents or mortgage brokers. They are also barred from providing payments and providing other things of value to real estate agents, mortgage lenders and builders in exchange for business referrals. Illegal inducements include direct payments, free advertising, paying for office equipment, and gift certificates.
Last year, Gallagher issued a warning to the industry against engaging in illegal kickback arrangements. Gallagher said that his office is currently investigating all title agencies for similar practices. Fidelity National Insurance Company is the first to reach a settlement with the department.
To file a complaint, visit the Department of Financial Services web site at www.MyFloridaCFO.com or call the toll-free consumer helpline at 1-800-342-2762.
The new courthouse in Indian River County, named for the scenic body of water running between the barrier islands and the mainland along Florida's Treasure Coast. America's first National Wildlife Refuge was established on Pelican Island in the Indian River by Theodore Roosevelt in 1903.
LIST OF TITLE AGENCIES