Bulletin: SLS2010007

Dear Associates:

New RESPA Reform, Class Action Lawsuits, Regulatory Scrutiny and now comes Coleman vs. Commonwealth out of Federal Court in Pennsylvania - all of which remind us of the absolute necessity to charge the correct rate(s) and to check and verify that the right rate has been charged on each and every file.

In Coleman, the Court refused to dismiss a trio of Class Action Consumer RICO (that's right RICO) cases that accused the defendants of engaging in a pervasive pattern of overcharging for title insurance by systemically ignoring entitlement to statutory discounts. The Court held that the combination of Commonwealth and its title agents constituted a single enterprise separate and distinct from the "person" of Commonwealth and that the combination was permissible under RICO jurisprudence.

In California, the Department of Insurance alleged that an Underwriter charged lenders rates different than the rating rules that had been approved on certain residential refinance title insurance rates and escrow fees, which it considered unlawful rebating, resulting in a substantial fine.

A heavy financial price has been borne by our industry in class actions and regulatory matters alike on the referenced subject. The risks of noncompliance on this essential part of our business continue to be enormous for all of us; even more so after Coleman.

This bulletin is being distributed to reinforce the importance of offering all statutorily available discounts to your customers, including those in your Rate Manual, for example, reissue, refinance, substitution, and simultaneous rates. In addition, if required by state law, you must notify your customers of eligibility for any applicable rates.

Check it once, check it twice and take time to re-emphasize your current procedures on charging the correct rates with your team as we exit the winter and head into 2010's busiest periods.

As always we thank you for your oversight of this critical topic.

Coleman vs. Commonwealth (Click to View)

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