Florida’s Chief Financial Officer Tom Gallagher is warning title insurance agents to earn their business the old-fashioned way, or risk losing their right to do business in Florida altogether.
The Department of Financial Services, which regulates title insurance agents, and the Department of Business and Professional Regulation, which regulates real estate agents, have both reportedly noted an increase in recent months in the number of complaints regarding title insurance agencies paying financial “kickbacks” to real estate agencies or mortgage brokers in exchange for referrals.
“An agent who accepts a kickback has an incentive to be less than fully open about all of a consumer’s options,” said Gallagher, who oversees the Department of Financial Services. “It is blatantly unfair for consumers to get the short end of the stick when they are making one of the largest purchases in their lives.”
To date, the department has taken action against two title insurance agencies and an agent. Brokers Title of New Tampa LLC, was fined $10,000, ordered to repay more than $31,000 in improperly collected funds and put on probation for one year. Investigators determined that title agents with Brokers Title were providing kickbacks under the guise of an affiliated business. Also, First Southwestern Title Co. of Florida and principal agent Anita Coleman Dana, of Maitland, were each fined $2,500 and put on probation for one year.
Gallagher and Kevin McCarty, director of the Office of Insurance Regulation, jointly issued a bulletin to all insurance companies and agents selling title insurance outlining the circumstances under which a title insurance agent would be in violation of Florida’s anti-kickback laws.
Examples of what title insurance agents are prohibited from doing for realtors include: printing or paying for the cost of printing advertising materials; furnishing or paying for office equipment; providing or paying for cellular phones; providing or paying for fuel for vehicles; sponsoring, hosting or paying for open houses; and paying real estate agents to fill out processing forms in exchange for contracts.
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