Showing posts with label Sierra Pacific Mortgage. Show all posts
Showing posts with label Sierra Pacific Mortgage. Show all posts

Tuesday, August 31, 2021

Independent title insurance agents - the key to your real estate transaction

Vested Land Services LLC has long avoided joint ventures and other business arrangements with mortgage brokers, real estate agents and attorneys.  Unfortunately, in these cases, the end-user of the title insurance process - the homebuyer or homeowner - usually doesn't know she is being steered to a title agent that has a financial arrangement - a kickback - with the lender or real estate agent  or attorney.  Sometimes it's disclosed but in a fashion designed to avoid the customer's curiosity as to the nature of that arrangement.

Moral of the story - 

know your title insurance agent!


A recent settlement in a case involving a national lender and title insurance company was made public.  Here's the news release from Bloomberglaw.com

Title Insurance Kickback Case Ends in $1 Million Settlement Deal

Aug. 11, 2021, 3:07 PM

https://news.bloomberglaw.com/banking-law/title-insurance-kickback-case-ends-in-1-million-settlement-deal

 Suit one of several alleging schemes between lenders, insurers

Judge advanced case in January after initially dismissing it

Sierra Pacific Mortgage Co. will pay $990,000, plus up to $280,000 in legal fees, to resolve racketeering claims over an alleged scheme to refer mortgage borrowers to a title insurer that gouged them and kicked back some of its excess profits, according to a federal court filing in Baltimore.

 Each of the approximately 307 homeowners ripped off by the conspiracy would get about $3,200 out of the settlement, the lead plaintiffs say in a motion seeking preliminary approval for the deal from Judge George Levi Russell III.

 That recovery would provide a “substantial benefit,” given that “in most instances this award is many times more than the kickbacks paid” or “the increased costs resulting” from them, according to the settlement motion.

 “Like all complex commercial cases and class actions, this case was not without its associated risks,” the filing says. “While class counsel firmly believe this case is strong, no case is full-proof.”

 If approved, the agreement would end litigation in the U.S. District Court for the District of Maryland over kickback allegations involving Sierra Pacific and All-Star Title Inc., which isn’t named as a defendant.

 The proposed class action, filed in 2019, is one of several alleging violations of the Racketeer Influenced and Corrupt Organizations Act and the Real Estate Settlement Procedures Act by mortgage providers taking kickbacks from All-Star.

 Each of the lawsuits accuses a residential lender of referring customers to All-Star, which was allegedly able to charge an inflated rate for title settlement services thanks to the steady source of customers.

 Russell initially dismissed the claims against Sierra Pacific in March 2020, saying its “payments to All Star fall squarely within” RESPA’s “safe harbor” provisions because they were for services rendered.

 But he vacated that decision in January, admitting he’d fundamentally misunderstood the allegations, including the direction of the alleged kickbacks. It’s plausible those weren’t “bona fide” payments for “goods or facilities actually furnished or for services actually performed,” the judge said.

 Smith, Gildea & Schmidt LLC and Joseph, Greenwald & Laake PA are co-counsel for the homeowners. Sierra Pacific is represented by Weiner Brodsky Kider PC.

 The case is Walls v. Sierra Pac. Mortg. Co., D. Md., No. 19-cv-595, motion for preliminary settlement approval filed 8/10/21.

 


We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or
if you have questions about what you see here, contact
Stephen M. Flatow, Esq.
a/k/a Dr. Title
Vested Land Services LLC
165 Passaic Avenue, Suite 101
Fairfield, NJ 07004
Tel 973-808-6130 - Fax 973-227-0645
E-mail sflatow@vested.com
@vestedland



Disclaimer:

The information included is designed for informational purposes only. It is not legal, tax, financial or any other sort of advice, nor is it a substitute for such advice. The information may not apply to your specific situation. We have tried to make sure the information is accurate, but it could be outdated or even inaccurate in parts. It is the reader’s responsibility to comply with any applicable local, state, or federal regulations. Vested Land Services LLC and their employees make no warranties about the information nor guarantee of results, and they assume no liability in connection with the information provided.
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