More than 64,500 people who bought new homes in Michigan will share a $27.5 million settlement approved Tuesday, media reports said.
U.S. District Judge Avern Cohn in Detroit approved a settlement to be paid by four title insurance companies that allegedly overcharged new-home buyers for title insurance between December 1998 and July 2005, reports said.
The title insurance industry came under an intense spotlight in 2005. Colorado’s Insurance Division in February investigated nine Colorado title insurers for alleged kickback schemes said to result in overcharges to consumers. The probe sparked dozens of investigations nationwide, in Florida, Washington, Hawaii, California, Oklahoma, Minnesota, and Washington and other states.
Checks averaging $345 will be sent to homeowners around July if no one appeals the decision, plaintiffs’ lawyer Patrick Bruetsch of Birmingham, Mich., told the Detroit Free Press.
So far, no one has objected, reports said.
Bruetsch said homeowners eligible for the payments were identified through subpoenas to 500 agents for the title insurance companies and notified earlier this year, according to reports.
Cohn earmarked about $8.7 million of the settlement for attorney fees and costs for bringing the lawsuit, reports said.
The title insurance companies in the settlement are Chicago Title Insurance Co. of Missouri, Transnation Title Insurance Co. of Arizona, First American Title Insurance Co. of California and Lawyer’s Title Insurance Corp. of Virginia, according to reports.
“LandAmerica is committed to adhering to the highest standards of business practice. While the company admitted no liability in the settlement, we worked closely with the court and mediators to resolve this issue. We look forward to continuing to help protect the property ownership rights of Michigan citizens,” Peter Habenicht, a LandAmerica spokesman, said. LandAmerica owns Lawyers Title and Transnation.
Calls to Chicago Title parent company Fidelity National Financial and to First American Title Insurance Co. were not returned by press time.
A tentative settlement on this case was reached in February. At that time, Bruetsch told the Free Press, “This appears to be the beginning of the end of a rate structure that we believe repeatedly resulted in violations of federal law.”
Bruetsch and Farmington Hills, Mich., lawyer Jeffrey Yellen and Birmingham, Mich., lawyer David Davis filed the class-action suit in 2000 on behalf of four Detroit-area residents, reports said.
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