First American's stake in local title agencies sparks lawsuit

Complaint alleges RESPA violations, seeks class-action status

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An appeals court has ruled that attorneys for an Ohio woman have a right to probe whether First American Corp. violated anti-kickback regulations by allegedly buying ownership stakes in local title insurance agencies around the nation and then requiring the companies to refer all future business to First American.

The lawsuit, by Cleveland resident Denise P. Edwards, claims First American paid $2 million in cash and securities for a 17.5 percent interest in Tower City Title Agency, and then required the agency to refer all future business "exclusively" to First American.