Since this blog should put me over the 100K total, I'll revert to my 'roots' and rant about ABA's (or correctly, AfBA's) and how....... I HATE THEM.
What is an AfBA? "An AfBA is an arrangement to share or refer business between two different companies involved in providing services in the closing of a real estate transaction. There may be ownership interest of a party in both the business referring out the service and the business receiving the referral.
The practice is not illegal, but is regulated by RESPA to assure full disclosure to the consumer of any relationships where business is referred in this way.
Examples: When a real estate broker has a 25% ownership in a title insurance company and refers business to that company for her real estate transactions, this is an AfBA." http://realestate.about.com/od/thetransactionprocess/g/afba_respa.htm
My Title company, Bertrum Settlements, does not engage in such a business arrangement. Perhaps we will or perhaps we won't down the road...this post is my personal opinion and 'hatred' of such blatant steering and use (abuse) of a consumers lack of knowledge regarding Title Insurance and Closing costs.
Personal interviews with 30 + Re/Max Realtors in Berks County PA revealed an overwhelming response regarding use of Bertrum Settlements or ANY other Title company than their 'in-house'. "Why would I use someone else when I get paid from my own Title company..."
At least 8 agents I've personally spoken, and many more I heard second hand from a KW agency in Lehigh County in PA indicate a kicker on top of the money they receive. They overwhelmingly "...hate (their word) their in-house Title Company because they are incompetant but are pressured by the broker owner to use them."
Then I remembered our buddy Ed Rybczynskiwho posts on ActiveRain and has been outspoken regarding a few things regarding the Title Industry in general and I recalled his position on AfBA's I read awhile ago. Ed and I do not agree on everything, but we do agree on most issues and he articulates an opinion better than most. Check out this link to TITLE-OPOLY and Ed's enjoyable blog. http://title-opoly.squarespace.com/title-opoly/2007/3/10/a-culture-of-greed.html In it, you will see comments from a couple respected and active AR people like Fran the Title Man and Diane Cipa. You will also see this sentence..... "Think about it, the Coldwell Banker Burnet case is about the abuse of trust, victimization, and theft. It's worse than armed robbery because it involves active abuse by highly paid professionals who voluntarily assume fiduciary responsibilities."
OK, I bolded the fiduciary part. Why? Isn't that what the Realtor is accountable for regarding his/her client? Despite rumors on the street... all Title companies are NOT created equal. Why not give the consumer a little education and SOME choice in the matter. After all, who's truly the person paying
And from RESPA LEGAL today...(the free snippet of info)..that popped up in my email today...
"When P. Wesley Foster Jr., CEO of Long & Foster, learned that his agents were sending thousands of loans to lenders other than the company's in-house mortgage provider, he sent a memo to all of the agents asking them to support their affiliated service providers. That action has now sparked industry debate over whether the memo put undue pressure on agents to put the best interests of the company over those of their customers."
Just shoot me.