Fidelity National Financial settled with Department of Housing and Urban Development over mortgage kickback charges

The Department of Housing and Urban Development reached a settlement of $4.5 million with Fidelity National Financial over charges that the company paid real estate brokers bonuses and referral fees which violates the Real Estate Settlement Procedures Act.

The Real Estate Settlement Procedures Act was established to protect consumers from high settlement charges caused by abusive real estate and mortgage practices. It is designed to arm consumers with information and regulations to protect them from increased costs in settlement services and interest rates throughout the home buying process.

Under RESPA, there can be no referral fees, and HUD claims FNF paid real estate brokers for their referral services such as home warranties and title insurance. FNF, however, argued that payments were made for software use and no consumers were charged. The HUD said brokers were given access to TransactionPoint software, which automates the real estate transaction from listing to close, and listed FNF subsidiaries as service providers. FNF agreed to stop paying brokers who place orders through the software.

The Wall Street Journal reported that most consumers accept the title-insurance choices made for them by their real estate agent, mortgage company or builder rather than browse their options. Title insurance guarantees that consumers own their homes, and protects lenders and consumers from a taxing authority or another creditor from trying to claim the property.

In a statement, Federal Housing Administration Commissioner Robert Ryan said, "This agreement should be a signal to others that these business practices won't be tolerated." 

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