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#896682 - 01/30/08 03:51 PM Bank Referral Fees for Title Ins.
Expedition Offline
Member

Registered: 05/06/02
Posts: 54
Bank paid referral fee to W-2 bank employees for the referral to title insurance affiliate for title insurance in bank real estate transaction.

I know this is permissible under RESPA if the affiliate is disclosed via the Afba form.

Are there any specific Ohio laws restricting the payment of bank paid referral fees to it's W-2 employees for referrals to an affiliated title insurance company. I've reviewed Ohio state law and could not find any restrictions (Some states have laws restricting payment to a nominal fee that is not contingent on the actual sale of the insurance)

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#896948 - 01/30/08 10:29 PM Re: Bank Referral Fees for Title Ins. [Re: Expedition]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49437
Loc: Galveston, TX
It going to come down to where the money to pay these referral fees by the bank is realy coming from. Ohio code states:

3953.26 Payments for inducement of business.
No title insurance company and no title insurance agent shall pay or give [to] any applicant for insurance, or to any person, firm, or corporation who is acting as agent, representative, attorney, or employee of the owner, lessee, mortgagee, or of the prospective owner, lessee, or mortgagee of the real property or any interest therein, either directly or indirectly, any commission or any part of its fees or charges, or any other consideration or valuable thing, as an inducement for, or as compensation for, any title insurance business. Nothing in this section shall preclude the payment by a title insurance company of a commission to any attorney, if said attorney is also a licensed title insurance agent of such title insurance company, or the payment by such title insurance company or its agent of a fee to an attorney for services rendered in the examination of title or certification thereof.
_________________________
The opinions expressed are my own, take them or leave them.

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#897071 - 01/31/08 09:36 AM Re: Bank Referral Fees for Title Ins. [Re: rlcarey]
Expedition Offline
Member

Registered: 05/06/02
Posts: 54
I did read through that section of Ohio code but it's not applicable. This is a bank paid fee to its own employee for the referral. I just wanted to make sure there wasn't any other laws or regulations that I could have missed that would restrict bank paid referral fees.
Thanks for your help

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#897922 - 02/01/08 08:18 AM Re: Bank Referral Fees for Title Ins. [Re: Expedition]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49437
Loc: Galveston, TX
When you refer to an "affiliate" - what does that mean - a sub of the bank or a sub of the holding company?
_________________________
The opinions expressed are my own, take them or leave them.

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#899106 - 02/04/08 12:11 PM Re: Bank Referral Fees for Title Ins. [Re: rlcarey]
Expedition Offline
Member

Registered: 05/06/02
Posts: 54
In this case the title company is a subsidary of another financial institution but both financial institutions are under the same holding company.

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#901234 - 02/06/08 09:08 PM Re: Bank Referral Fees for Title Ins. [Re: Expedition]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 49437
Loc: Galveston, TX
You should check with legal counsel to see if there are any other State prohibitions, as you are probably beyond the expertise found in these threads other than the citation above.

Under RESPA, as long as the bank was making the payment and no monies were being passed from the title company to the bank - it would not be a problem.
_________________________
The opinions expressed are my own, take them or leave them.

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