RESPA Police Strike Again

The Department of Housing and Urban Development has settled with a Michigan-based title company over violations of Section 8 of the Real Estate Settlement Procedures Act. Metropolitan Title Co., Howell, Mich., will pay a $150,000 settlement. HUD alleged the company paid substantially in excess of fair market value, up to $150 per hour, to rent conference rooms in the Detroit area at real estate brokers offices to conduct closings. Furthermore, HUD alleged in some instances the title company was renting space even though some of its own offices were nearby. Renting space itself is not a Section 8 violation, HUD pointed out, but in this case the excessive payments were designed to hide prohibited referral fees. Besides the payment, Metropolitan agreed to pay settlement service providers rental rates at the minimum level of general market value for equivalent space. Metropolitan Title was acquired by First American Title Insurance Co. in Dec. 2003. The text of the settlement is on http://www.hud.gov.