Fidelity National Title Insurance broke the law by underwriting a New Mexico builder’s grand-opening events, homeowner seminars, and dinners for real estate agents, federal regulators investigating settlement services practices in Albuquerque allege.

Fidelity’s business arrangement with Longford Homes of New Mexico Inc. violated anti-kickback and referral fee provisions of the Real Estate Settlement Procedures Act, or RESPA, the Department of Housing and Urban Development said today in announcing settlements with both companies.

Fidelity also furnished real estate agents with “just sold” and “just listed” postcards and listing agreements at no cost or below cost, and provided Longford with a prepaid postage meter, HUD alleged.

HUD investigators said Fidelity granted Longford a $25,000 line of credit in exchange for referrals of settlement service business. Longford used the line of credit to buy gift certificates, event tickets and dinners for its own employees and real estate agents, HUD alleged.

While denying the allegations, Fidelity agreed to pay $68,635 to settle them. Longford Homes settled for $20,700 without admitting liability or fault.

In settling the charges, Fidelity said its marketing arrangement with Longford Homes ended in July 2004.

In its settlement, Longford said its relationship with Fidelity “was terminated as soon as possible upon the discovery that the arrangement … could possibly violate RESPA, and Longford has taken strict steps to ensure that no other similar action is engaged in by Longford or its agents.”

HUD approved both settlements on Feb. 5. In a press release issued today, HUD said it continues to investigate possible RESPA violations by settlement services providers in the Albuquerque area.

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