Don't Overlook RESPA Regs, Panel Warns

The message from a panel on title insurance joint ventures was simple: Do not overlook Real Estate Settlement Procedures Act regulations and assume you will not get caught.The panel at the National Association of Mortgage Brokers annual convention in Minneapolis was put on by representatives of Title Alliance Ltd., which is part of First American Title Insurance Co. Patti DeGennaro, chief operating officer of Title Alliance, said the Department of Housing and Urban Development has 16 investigations going on right now regarding sham affiliated business arrangements. Recently, the agency entered into a settlement in Tulsa, Okla., over a joint venture that the regulator alleged was really a kickback scheme. Title Advantage's chief executive Bill Cotter said partner selection is the key to joint venture success. Look for "character, commitment, and capacity," he advised. In the area of commitment, the partner needs to be committed to the joint venture first, not his own operation, Mr. Cotter said. The partner has to have the capacity to provide such things as benefits and human resource services, as well as the capacity to provide business reports to the originator partner.