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Another sign that the State of Florida’s Department of Financial Services is looking to clean up the industry was announced in the Palm Beach Post Saturday (November 17, 2007)… link to article

First American Title Company, the nation’s largest Title Insurance Service Provider, agreed to pay fines of $5Million for setting up 87 “sham” title insurance agencies in Real Estate and Mortgage offices throughout the state.  These “agencies” would then pass fees onto the limited partners, a.k.a. the Realtors and Mortgage Brokers - which the State of Florida views as a kickback.

State and Federal Laws prohibit any Real Estate or Mortgage Professional from accepting any referral fees from Title Insurance Business.

While Mortgage Brokers and Realtors always want to “control” title, meaning be able to choose who our clients work with for any number of reasons, this is just a glaring example of what happens when an entire company sets itself in a position to manipulate the system and pander to the lowest common denominator for all commission based salespeople - their take home pay!

Some would just see this as a sign of further greed in an industry that already has a bad reputation… but when a big, national company takes a hit like this, it shows that there are vast differences in the Ethical and Not-So-Much-So companies in the market today.

From this Mortgage Broker’s perspective, playing games as such when you are skirting the law is just bad form.  I prefer to work with companies where there are people I know and trust.  I would rather get good service for my client than get paid an extra few dollars on a transaction for recommending someone sub-standard.

…And what it really does come down to is the referral fee versus the value of a license… First American just paid $5Million to keep its license in Florida…

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David A. Podgursky, MBA
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