Not On Our Watch
What is an Affiliated Business Arrangement?
If your lender or realtor is asking you to use their “in-house” title company you may want to fully understand the ramifications and that they most likely are participating in an Affiliated Business Arrangement. These are agreements between title agencies, real estate agents, builders and lenders to share the profits from your transaction! They are very bad for the consumer. They lock-in business, restrict consumer choice, hide fees and transfer secret profits from one party to another. This practice is a conflict of interest and has been brought to the attention of the Ohio Courts by Eagle Land TItle Agency and the Ohio Association of Independent Title Agents.
Also, according to Douglas R. Miller, Executive Director at Consumer Advocates in American Real Estate (CAARE):
“…giving fiduciaries control to steer clients into AfBAs results in over-priced ancillary services. Self-dealing is probably the worst breech of fiduciary duty. To exploit a client’s vulnerabilities or alter the advice given to a client in exchange for something of value is considered such an abominable thing that most states construe it as a crime. It is a form of fraud, theft, commercial bribery and a terrible violation of trust”.
Eagle says No to AfBAs, and Yes to Independence!
Eagle Land Title Agency does not participate in Affiliated Business Agreements. This is an active choice we make to better meet your needs and represent you. We do not pay referral fees or incentives to real estate professionals. Instead, we pass these savings on to you. We are not pressured into doing business with any particular company.
We keep our relationships honest, allowing us to focus on what we do best: representing you independently, looking out for your needs and protecting you, our customer. We also empower you to make the best choices possible.
Eagle Land Title Agency is a proud charter member of the Ohio Association of Independent Title Agents and the National Association of Independent Land Title Agents. We believe that truly independent title agencies make insurance costs more competitive, help lower insurance claims and protect the consumer from costly real estate related litigation. We believe in the free market and the economic foundations on which our country was built.
What can you do as a consumer?
Ask your real estate agent and lender a tough question:
Are you affiliated with a title company? Consumers are more educated than ever and they know what they want: the best choice at the best price. They want their best interests kept in the forefront throughout their business transaction. Do not be fooled. AfBAs are not a one-stop-shop. Simply put, no competition equals over-inflated prices and no choice. We want you to keep that money and put it to better use rather than overpaying for services and insurance you can easily obtain from an independent title agency, like us at Eagle.
What can you do as a real estate professional or a lender?
If you are a real estate agent or a lending institution, help your customers get what they want. We suggest you shop and compare 3 different independent title agencies for price, service and convenience. As a professional you can present these options to your clients and guide them in making their best choice. We are confident that you’ll like what you see and that we’ll come out on top! Dare to lead by offering choices to your clients.
Below are just a few articles regarding the AfBA problem. For more articles look under our Blog – Consumer News Category section of the web site:
- Regulators cracking down on title kick back Schemes
- Do affiliated business arrangements violate fiduciary duty laws?
- October Research Corp.: Ohio Sham AfBA hunt continues
- Feds serious about cracking down on kick backs (12/04/2005)
- Using title agency affiliated with broker can be mistake (09/25/2005)
- HUD Settlement With Coldwell Banker Sends “Affiliated Business” Warning to Realtors (09/19/2005)
- Major Federal Crackdown On Realty Fee Kick backs Underway “In Every State.” (07/25/2005)
- Mortgage Brokers Ask HUD To Investigate Builder “Incentives” To Homebuyers (05/09/2005)
- Civil Justice Settles Class Action Lawsuit On Behalf Of Real Estate Consumers