Banks, insurer paying to settle HUD complaint.

Eight Virginia banks and Investors Title Insurance Co. agreed to pay $70,000 as part of an administrative settlement for alleged violations of the Real Esatate Settlement Procedures Act.

The Department of Housing and Urban Development alleged that Investors Title and the eight banks, whose subsidiaries acted as title agents for Investors Title, violated the act by giving and accepting unearned fees and by splitting fees for work not performed.

HUD said that Investors Title and the banks. through subsidiaries, set up two different title insurance programs.

Under the arrangement, the title insurer paid the title agents for full service even though the agents did not perform most of the underwriting functions. The title agents also received other payments, in proportion to the amount of business each referred to Investors Title.

Under the settlement, Investors Title agreed not to compensate title agents, nor to set up another title insurance program, unless its title agents actually perform core services.

The Virginia banks and their subsidiaries also agreed not to receive compensation as title agents or agencies unless they perform those services.

The banks are: Bank of Southside Virginia, Carson; Fairfax Bank and Trust Co.; Bank of Buchanan; Citizens and Farmers Bank, West Point; Charter Federal Savings Bank, Bristol; First National Bank of Christiansburg; Piedmont BankGroup, Martinsville, and Salem Bank and Trust.

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