District of Columbia Settles with Four Title Companies Over Alleged Collusion

  • Title insurance agencies under investigation for potentially collusive practices inflating costs for home buyers
  • District of Columbia Attorney General finds ‘illegal kickback schemes’ between title companies and real-estate agents
  • Four title companies settle with District of Columbia for $3.3 million over civil claims
  • Title insurance industry under scrutiny from the Biden administration to lower upfront mortgage costs

Title insurance agencies are facing scrutiny for potentially collusive practices that inflate costs for home buyers. Every time Americans take out a mortgage, they are required to pay hundreds or thousands of dollars for insurance to protect against unexpected property title issues. District of Columbia Attorney General Brian Schwalb announced an investigation found these partnerships consisted of ‘illegal kickback schemes’. Four title companies agreed to pay a total of about $3.3 million to settle civil claims with his office, while denying wrongdoing as part of the agreements. The industry is under scrutiny from the Biden administration to lower upfront mortgage costs. Critics argue these partnerships lead to inflated fees and limit consumer choices.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the investigation into potential collusive practices in the title insurance industry and their impact on home buyers’ costs. It includes quotes from relevant sources and discusses the ongoing debate over the necessity of these practices. While it does mention some personal perspectives, it does not present them as universally accepted truths.
Noise Level: 7
Noise Justification: The article provides some relevant information on the investigation of potentially collusive practices in the title insurance industry and their impact on home buyers’ costs. However, it contains some repetitive information and dives into unrelated territories such as the Biden administration’s efforts to lower mortgage fees and real estate agent commissions. The article could benefit from more focus on the topic and stronger evidence supporting the claims.
Public Companies: Fannie Mae (FNMA)
Private Companies: Allied Title,KVS Title,Modern Settlements,Union Settlements
Key People: Brian Schwalb (District of Columbia Attorney General), Rob Holman (President of General Title Insurance)

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Financial Relevance: Yes
Financial Markets Impacted: Title insurance industry and mortgage market
Financial Rating Justification: The article discusses the investigation of potential collusive practices in the title insurance industry, which impacts the costs for home buyers and mortgage closing fees. It also mentions that government-controlled mortgage giant Fannie Mae is seeking to waive the need for title insurance on certain mortgage refinancings due to these practices, affecting the financial markets and companies involved.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: The article discusses issues related to title insurance practices and investigations into potential collusion, but it does not report on any extreme event that occurred in the last 48 hours.·
Move Size: No market move size mentioned.
Sector: Real Estate
Direction: Down
Magnitude: Large
Affected Instruments: Stocks

Image source: MySociety / TICTeC 2019: OECD in Paris

Reported publicly: www.wsj.com