Hazard Reporting Co., Real Estate Firm Settle RESPA Charges; Allegedly Used Sham Entities To Hide Kickbacks, Cheat Consumers; Will Pay Up To $35M

From the Department of Housing and Urban Development ("HUD"):

• The U.S. Department of Housing and Urban Development [recently] announced that it has settled its federal lawsuit under the Real Estate Settlement Procedures Act (RESPA) against Property I.D. Corporation, a large hazard reporting company in California, Realogy Corporation, Cendant Corporation (now known as Avis Budget Group, Inc.) and Coldwell Banker Residential Brokerage Corporation.(1)

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• HUD alleged that Property I.D. Corporation of Los Angeles made improper payments to large real estate brokers in California based on the referral of consumers to Property I.D. Such referral-based payments are kickbacks and prohibited under Section 8 of RESPA.

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• In return for these referrals, the brokers were paid through quarterly payments, $25 per report, or one-quarter of the total report's cost. The sham affiliated businesses did not provide hazard disclosure reports to non-referred customers and shared in profits based solely on the number of referrals made to Property I.D.

For more, see HUD Settles Lawsuit With California Hazard Reporting Company And Real Estate Brokerage (HUD also wins ruling giving it authority to recover illegal profits).

Go here for other HUD Settlement Agreements With Alleged RESPAViolators.

(1) A settlement in a related federal class action lawsuit requires the companies to pay up to a combined $35 million dollars, much of it to California consumers who purchased hazard disclosure reports as far back as 1996.