Second Title Rep Suspended in a week in CA by Department of Insurance

By
Title Company with First American Title Company ePro, MBA

SB133 legislation has zeor tolerance for title professionals providing any value to real estate professionals in California.  This is the second action taken against smaller title companies in California but a wake up call for the Title Rep and the Real Estate Professionals involved.

NEWS RELEASE

Commissioner Poizner Announces More Disciplinary
Actions Under New Title Insurance Law

Second Suspension Taken Against a Title Marketing Representative This Week

Continuing his efforts to crack down on illegal title marketing practices, Insurance Commissioner Steve Poizner announced today that the Department of Insurance has reached an agreement with Carmen Rojo and her employer Nations Title Company of California to resolve allegations of illegal rebating activities.

"Illegal rebates drive up prices for consumers and it turns out that giving away free lunches at a seminar for realtors and lenders cost a title marketing representative much more than the price of the meal," said Commissioner Poizner.  "Because we now have the ability to punish both the title marketing representative in addition to the title company, this new authority will curb marketing abuses in the industry."

Under the settlement, Rojo agreed to halt these activities and to a suspension of her certificate of registration for 20 days. She will not be able to market and sell title insurance during that time. Separately, Nations Title Company of California agreed to pay $4,000 in penalties and $1,000 to CDI for the reimbursement of attorney fees and costs.  

In March 2009, CDI began investigating and examining the marketing practices of Rojo and her employer Nations Title Company of California after receiving written complaints alleging illegal rebating activities. The Department investigated marketing activities in Nations Title Company of California's Norwalk office since January 1, 2009. Based on results of the investigation, CDI alleged that Rojo presented an offsite educational seminar for realtors and lenders on Feb. 25, 2009. The topics included bankruptcy, loan modifications and marketing, and overcoming fear and goal setting. The seminar was advertised via fliers distributed by Rojo. It is illegal to provide educational programs that are not exclusively related to title insurance business. In addition, a complimentary lunch was provided to the approximately 50 realtors and lenders at the seminar. The cost of the food and beverages and other costs associated with putting on the seminar is estimated at more than $2,100.

Prior to the new legislation (SB 133) sponsored by the California Land Title Association, the Department of Insurance had no enforcement authority over the individual title marketing representatives who engaged in illegal rebating activities. While the practices were illegal, the Department only had recourse against the title insurers. Under the new law, effective January 1, 2009, the Department is authorized to bring administrative actions against individual title marketing representatives along with title insurers who engage in illegal practices to refer title business.  

The new law establishes zero tolerance for enticing realtors and lenders with food or beverage or entertainment as an inducement to refer title business. Additionally, it provides the Department with regulatory oversight of title marketing representatives by establishing a certification program and disciplinary action including the imposition of a monetary penalty to be paid out of personal funds and suspension of the certificate of registration. A title marketing representative must hold a valid certificate of registration from CDI to act in that capacity. To date, CDI has issued 1,913 certificates of registration to title marketing representatives.

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Make it a profitable day!

Scott Hoen

SHoen@FirstAM.com

Direct:  (714) 250-5014

Cell:  (714) 270-9607

"The Views expressed herein reflect only the individual's personal views and are not the views of the author's employer."

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Comments 34 New Comment

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Rainer
47,547
Al Dobbs
ADD Real Estate

What no more free food--hate it when the government gets involved.

June 25, 2009 12:19 AM
Rainmaker
547,762
Cheryl Johnson
Cheryl Johnson, Bob Taylor Properties, Inc., Los Angeles, CA

Al,

Yes, no more free food.  BUT the bigger issue is no more free INFORMATION either.

California title companies will no longer provide COMPS in their profiles.  They will no longer provide maps with the comps pinpointed.  They will no longer provide copies of recorded deed and liens.  They will no longer provide lists of neighboring property owner names.

ALL of these items are public record.  Title companies simply provided a convenient service by making the information easily obtainable from one place.

 

June 25, 2009 05:46 AM
Rainer
47,547
Al Dobbs
ADD Real Estate

Cheryl,

     That is  too bad.   I do not understand why providing the information for free is a problem.  Because like you have informed us--"...items are public record." The title company was saving the real estate professional some time and money. The costs of doing business have just gone up.

 

June 25, 2009 12:34 PM
Rainer
217,292
Scott Hoen
VP, SWD Director of Marketing, ePro, MBA
First American Title Company

The California Department of Insurance is being quite clear in regards to the current statute 12404.1 on the Insurance Code.

A property profile may include ONLY the following:

Names of owners of record of a specified property

A description of real property

Property characteristics as defined in section 408.3 of the Revenue and Taxation Code meaning;

Year of construction of improvements to the property, square footage, number of bedrooms and bathrooms of all dwellings, the property acreage, other attributes such as pool, number of units.

Comparable sales, lender information, phone numbers, tax information, community information, mapping all will NO longer be provided by a Title Company in the State of California. 

Again, there are other sources for the information -- real estate professionals will have to locate them and pay for them.

The California Department of Insurance is trying to drive down marketing and service costs for a Title Company and in the process have shifted the cost to the real estate professional.  The Department of Insurance goal of reducing marketing expenses with the hope of decreasing the price of title insurance to consumers is just that, a goal -- Title Companies in California continue to raise their rates!

June 25, 2009 12:50 PM
Anonymous #34
Anonymous
Gary Psotka

This is comical. 

First of all title fees are requlated.  If you're worried about the Consumer, lower the title rates.

Secondly, I'm not sure how the $5.00 worth of Costco Oatmeal and Raisen cookies that our title rep used to bring us once a month is considered bribery.  LMAO.  

Not to mention that taking away Property profiles, generally public information to the masses, is ludicrous and has no economic benefit whatsoever to the consumer and only passes on yet another expense to the Realtor, or Small Business Owner. 

Is this really the highest and best use of the commissioners office and my tax dollars?  Doubtful.

July 06, 2009 09:58 PM
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Rainer
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Scott Hoen

VP, SWD Director of Marketing, ePro, MBA
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