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Title Kickbacks

New York, NY: (Oct-29-07) The Housing and Urban Development Department brought charges against six homebuilders, Pulte Homes Inc., KB Home, Beazer Homes USA Inc., Meritage Homes Corp., Ryland Group Inc. and Tousa Inc., alleging that they illegally established title insurance companies that took payments amounting to kickbacks. Title insurance protects homeowners and lenders against unknown claims or liens on property. The federal agency claimed that the builders were illegally using their own "captive" title insurance companies to receive payments for a portion of the insurance risk, when no such arrangement is necessary in the single family home market.

As part of a settlement reached, the six agreed to pay $1.4 million to resolve federal allegations. Further, under the deal, the builders agreed to halt the practices. Had settlements not been reached, sources claimed that the government could have pursued civil lawsuits against the companies. [CNN NEWS: TITLE KICKBACKS]

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Published on Oct-30-07


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