Allegations of Kickbacks paid by Wells Fargo Home Mortgage to Title Insurers in California
A law firm is investigating allegations by consumers and the state of California Department of Insurance that Wells Fargo Home Mortgage may have paid kickbacks to title insurers in order to obtain new business.
The Issue
Title insurance is required by lenders when a home is sold, costing an average of $1,400 in California. The coverage essentially assures the buyer that the seller actually owns the property and that there are no liens on the property as well.
Home buyers can shop for title insurance themselves, or they often use a company recommended by their agent, lender or builder. California State Insurance Commissioner John Garamendi alleges that customers "were not routinely sent to the low-cost insurer, but to the insurer promising the realtor, lender or builder the biggest kickback."
According to the state, the scheme involves the establishment of a group of re-insurance companies. These companies share some of the risk incurred by the primary insurers. However, the state alleges that these reinsurance companies are actually controlled by various real estate firms, homebuilders and lenders, existing only to take kickbacks from the primary insurance companies, including Wells Fargo Home Mortgage.
The state has alluded to this as nothing more than "commercial bribery." It certainly did not allow the insurance buyer to acquire the best coverage at the best price.
If you have title insurance through a title company that was recommended to you by your real estate agent, homebuilder, or Wells Fargo Home Insurance or an agent of the company, please complete the form below.
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