Industry News
December 18, 2012
California Corporations Commissioner Weighs in on Vetting Settlement Agents
The Department of Corporations (DOC) issued Commissioner's Bulletin No. 001-12 on December 5th addressing vetting of settlement agents by third party risk management companies. The bulletin was issued to prevent DOC licensees from inadvertently violating California law on unlawfully paying for referrals under the Escrow Law. The DOC is deferring to the CFPB on whether there is a RESPA violation in paying fees to be on an approved list for settlement services. Additionally, the bulletin highlights the risk that mandating the use of a service provide from a preapproved list may violate the California Buyer’s Choice Act. The bulletin cautions licensees that it may bring an action against licensees that contract with third-party risk management companies or place restrictions on service providers in a manner that violates the law.
