Skip to main content

HUD and Alaska’s Division of Insurance settle with title company on RESPA kickback violations

Jan 13, 2010

The U.S. Department of Housing & Urban Development (HUD) and the State of Alaska’s Division of Insurance ( Alaska DOI ) have announced a legal settlement with Alyeska Title Guaranty Agency for alleged violations of the Real Estate Settlement Procedures Act (RESPA) and Alaska’s anti-rebating law. HUD and Alaska DOI claim Alyeska paid a sham employee for referring consumers to the title company. Under the terms of the settlement announced, the company agrees to cease the alleged sham employment arrangement and will pay up to $155,000 to the U.S. government and the State of Alaska. “Consumers are the ones who ultimately foot the bill from unethical practices in mortgage transactions,” said David H. Stevens, HUD’s Assistant Secretary for Housing and Federal Housing Commissioner. “Working closely with our partners in Alaska, we hope this settlement will send a clear message that we have zero tolerance for unethical behavior in mortgage lending.” Linda Hall, Director of the Alaska Division of Insurance said, “This action should serve as a warning that we expect strict adherence to both RESPA provisions and Alaska insurance statutes and regulations by those involved in the title insurance and real estate industry.” After a joint investigation, HUD and Alaska DOI alleged that since at least 2003, Alyeska maintained a sham employment arrangement with Kirk Wickersham, owner of FSBO System Inc. HUD and Alaska DOI allege Wickersham, as a “title marketer,” was paid a percentage of Alyeska’s title insurance premiums in exchange for referrals he made to Alyeska. Section 8 of RESPA prohibits a person from giving or accepting anything of value in exchange for the referral of settlement service business. RESPA also prohibits a person from giving or accepting any part of a charge for services that are not performed. Likewise, the State of Alaska’s anti-rebating statute ( AS § 21.66.310 ) prohibits title companies and their agents from giving anything of value, directly or indirectly, as an inducement to obtaining title insurance business. In addition, state law prohibits a person in the real estate services industry, or any other person, from receiving, directly or indirectly, any rebate, reduction, or a special favor or advantage, or a monetary consideration or inducement. For more information, visit www.hud.gov.
About the author
Published
Jan 13, 2010
Post-Closing Challenges For Mortgage Brokers

How to navigate repurchase and clawback demands

Challenges And Solutions To Home Lending In Native American Communities Presented By NCRC

Bankers from around the nation participate in Redlining the Reservation webinar.

How Burnett v. NAR Will Impact The Mortgage Industry

Decision could make process harder for first-time buyers

First National Bank of Pennsylvania Settles Redlining Charges For $13.5 Million

Justice Department accuses major mortgage lender of discriminating against Black and Latino homebuyers in North Carolina.

FHA Announces New Rule Easing Branch Office Registration

Effective March 4, the Federal Housing Administration's updated regulation promotes broader participation in FHA programs, benefiting smaller loan originators and credit unions.