American Home Shield Corp. has agreed to pay up to $26 million to settle allegations that the company paid illegal kickbacks to real estate brokers and agents to market the company’s home warranties.
The company denied that the payments it made to real estate brokers who marketed its products violated the Real Estate Settlement Procedures Act (RESPA), and put a positive spin on the settlement, saying it "confirmed the compliancy of the company’s new broker compensation practices," called ProConnect, with RESPA.
The Department of Housing and Urban Development (HUD) next week will transfer hundreds of pending investigations of alleged violations of the Real Estate Settlement Procedures Act (RESPA) to the newly created Consumer Financial Protection Bureau (CFPB), which is taking over responsibility for RESPA enforcement.
The RESPA complaint caseload has been "extremely heavy," with more than 1,500 cases opened in the last 18 months, said Teresa Payne, HUD’s associate deputy assistant secretary for regulatory affairs, in testimony this week at a congressional hearing.
The hearing, conducted by the Insurance, Housing and Community Opportunity subcommittee of the House Financial Services Committee, was focused on regulatory changes and their impact on mortgage loan originations.
A judge has granted final approval of a $39.3 million settlement in a class-action lawsuit that alleged real estate brokers recieved kickbacks for referring clients to Property I.D. Corp., a company that produces natural hazard disclosure reports.
More than 300,000 Californians who bought natural hazard disclosure reports from Property I.D. when they listed their homes with Coldwell Banker, Prudential California Realty, RE/MAX, Century 21 or ERA Real Estate between 1996 and 2006 could be eligible for full refunds.