Tennessee builders to pay $226,000 in kickback settlement

Nine Tennessee home builders will pay $226,000 to the U.S. Treasury in a settlement with the Department of Housing and Urban Development for allegedly getting kickbacks from a Tennessee title company, HUD said today. HUD claimed that the nine builders received payments from First American Title Co. for settlement services that were never performed. Such so-called sham affiliated business arrangements violate anti-kickback and unearned fee provisions of the federal Real Estate Settlement Procedures Act, known as RESPA. The builders agreed to make a $226,000 payment to the U.S. Treasury and cease any further business operations involving the sham business affiliations, HUD said. The builders agreed to the settlement without admitting wrongdoing. RESPA was enacted in 1974 to provide for the advance disclosure of closing costs and to prohibit kickbacks and excessive fees in the home-buying process. HUD announced a similar settlement in July against First American Title Insuranc...