Second Title Rep Suspended in a week in CA by Department of Insurance

Title Insurance ePro, MBA

SB133 legislation has zeor tolerance for title professionals providing any value to real estate professionals in California.  This is the second action taken against smaller title companies in California but a wake up call for the Title Rep and the Real Estate Professionals involved.


Commissioner Poizner Announces More Disciplinary
Actions Under New Title Insurance Law

Second Suspension Taken Against a Title Marketing Representative This Week

Continuing his efforts to crack down on illegal title marketing practices, Insurance Commissioner Steve Poizner announced today that the Department of Insurance has reached an agreement with Carmen Rojo and her employer Nations Title Company of California to resolve allegations of illegal rebating activities.

"Illegal rebates drive up prices for consumers and it turns out that giving away free lunches at a seminar for realtors and lenders cost a title marketing representative much more than the price of the meal," said Commissioner Poizner.  "Because we now have the ability to punish both the title marketing representative in addition to the title company, this new authority will curb marketing abuses in the industry."

Under the settlement, Rojo agreed to halt these activities and to a suspension of her certificate of registration for 20 days. She will not be able to market and sell title insurance during that time. Separately, Nations Title Company of California agreed to pay $4,000 in penalties and $1,000 to CDI for the reimbursement of attorney fees and costs.  

In March 2009, CDI began investigating and examining the marketing practices of Rojo and her employer Nations Title Company of California after receiving written complaints alleging illegal rebating activities. The Department investigated marketing activities in Nations Title Company of California's Norwalk office since January 1, 2009. Based on results of the investigation, CDI alleged that Rojo presented an offsite educational seminar for realtors and lenders on Feb. 25, 2009. The topics included bankruptcy, loan modifications and marketing, and overcoming fear and goal setting. The seminar was advertised via fliers distributed by Rojo. It is illegal to provide educational programs that are not exclusively related to title insurance business. In addition, a complimentary lunch was provided to the approximately 50 realtors and lenders at the seminar. The cost of the food and beverages and other costs associated with putting on the seminar is estimated at more than $2,100.

Prior to the new legislation (SB 133) sponsored by the California Land Title Association, the Department of Insurance had no enforcement authority over the individual title marketing representatives who engaged in illegal rebating activities. While the practices were illegal, the Department only had recourse against the title insurers. Under the new law, effective January 1, 2009, the Department is authorized to bring administrative actions against individual title marketing representatives along with title insurers who engage in illegal practices to refer title business.  

The new law establishes zero tolerance for enticing realtors and lenders with food or beverage or entertainment as an inducement to refer title business. Additionally, it provides the Department with regulatory oversight of title marketing representatives by establishing a certification program and disciplinary action including the imposition of a monetary penalty to be paid out of personal funds and suspension of the certificate of registration. A title marketing representative must hold a valid certificate of registration from CDI to act in that capacity. To date, CDI has issued 1,913 certificates of registration to title marketing representatives.

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Make it a profitable day!

Scott Hoen

Direct:  (714) 250-5014

Cell:  (714) 270-9607

"The Views expressed herein reflect only the individual's personal views and are not the views of the author's employer."

Comments (34)

Christianne O'Malley
Dickson Realty - Reno, NV
Exceptional Service - Delivering Results in Reno!

Scott - if they focus on their business and delivering real value about how to close difficult transactions, or I would imagine a great topic would be the coordination of closing a short sale, they could get lots of attendees and still operate within the law. It's sort of like blogging...if you step back and think about it for a minute, I'm sure they could find something "within the scope" that would be of great value to their intended audience.

Jun 09, 2009 05:42 AM
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

I heard the California DRE (Dept. of Real Estate) is also cracking down on loan modification companies -- in particular those that charge fees up front from the customers!


Jun 09, 2009 06:18 AM
Bill Fletcher
Web Handyman - Dana Point, CA

Hey Scott,  Thanks for this update.  I have been discussing the issue of SB133 with several Realtors and Title Professionals here in So.Cal. One big question has been "will the new law really be enforced." You have answered that question. 

It seems some title companies are scared to death of the new regulation and have stopped all active marketing out of fear that they will do something wrong, while others have apparently continued to operate "business as usual." 

I can't help but think there is real opportunity here for a Title Rep who can harness modern techology in a way that is consistent with the spirit of SB133.

I would venture to say you would agree!


Bill Fletcher


Jun 09, 2009 12:40 PM
Scott Hoen
Carson City, NV
Carson City Clerk Recorder / Public Administrator

Bill - your absolutely right -- the Title Industry has been in a state of paralysis.  Everyone is worried that they will be turned in by another. 

I left the industry after about 25 years and developed an application specifically for them and it works hand in hand with agents -- keeping it simple in function and price and powerfull enough to communicate in a SB133 compliant way.

The Reps phones are ringing less -- they are in less office meetings with less to say -- Agents are adopting technology and aren't in their office -- they are in the car office or at home working their automated systems.  Everyone needs to have a communication system to work their farm, their contacts and the clients -- Goes for title as well.

Jun 09, 2009 12:51 PM
Barbara Whisenant
Windermere Real Estate SoCal - Carlsbad, CA
Home 4 Sale Carlsbad

Here in North County San Diego the Title Companies have stopped all the education, snacks, flyers and anything else they use to do for us.

It has really created a vacuum. The board has started a little to add classes and of course charge for attendance.

I invited a Title rep to lunch and was told that I couldn't even buy the lunch for us both. We had to each pay for our own.

Never really realized how much the did for us until it all had to stop.

Barbara Whisenant
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Jun 09, 2009 04:05 PM
Damon Botticelli
Silver State Realty & Investments - Las Vegas, NV
Realtor - Las Vegas Real Estate

Wow!  I think the law makers there have taken it too far.  I'm glad to see title companies are no longer able to do special favors, printing, etc... for the agents that bring them the most business, but offering education with no strings attached can only help the customer (homebuyers/homesellers) in my opinion.

Can they offer classes and refreshments if they charge a fee?

Jun 09, 2009 05:30 PM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Illegal rebates and Kick backs is too far.  I know the entire lunch thing sounds stupid, but this is what happens when people abuse the system.  I think they can give me bottled water if I come in for business.  They have to charge me for the time if I want to meet a client at the office (without doing any escrow stuff).  My old office was next to a Title Company and they always had the best coffee for us - NO MORE. 

Now if our Legislators had to follow the same rule with lobbyist . . .

Jun 10, 2009 03:24 AM
Brian M. Dubuc

We must work in the only business where you can't use normal marketing channels to get your name in front of your target market.  Kickbacks and rebates of fees as quid pro quo for referral of business is a legitimate area for regulation.  However, providing value to your target market by presenting a seminar and lunch is an excellent way to get in front of people who can refer you business.

This is regulation run amok.  There did not appear to be any kind of understanding that attendance at the seminar was dependent on referral of business.  I am a real estate attorney in Georgia and we fill the role that title companies do in California.  I would submit to you that this kind of enforcement action results in less service and value for each dollar spent on title and escrow due to fear on the part of the title company that if they do something good for a borrower, agent or lender that they will be prosecuted.  The whole affair is absurd. 

I find it interesting that the CALTA sponsored the legislation that allowed CA to prosecute the individual licensee as well as the employer.  It gives accountability meetings a whole new feel!

One other observation - has anyone ever quantified whether marketing really increases costs to the consumer?  If you suddenly don't have that expense, doesn't it just make the product more profitable?  Is anyone really going to reduce the cost of providing title and escrow services because you can't market anymore?  Does the cost of enforcement to the taxpayer exceed any savings to the consumer?  It's crazy - I know!  I just had to ask.

Jun 10, 2009 06:12 AM
Sharon Shepherd
Century 21 Olde Tyme - Norco, CA
Realtor, Norco/Riverside, WCR, Relocation, ePRO

I am upset that with all the really bad stuff that goes on, our wonderful title reps have become such a target for doing nothing more than educating us on so many different topics that we would ordinarily not go surching for or, God forbid, pay for.  So they feed us too, oh my, big deal.  I, for one, have a huge family I support and I really appreciated all the free classes that were provided.  Now I have to budget in, some how, the cost of learning extra goodies. 

I, for one, think they have gone way to far.  They cannot even give us demographics in our profiles.  Good grief, go catch some real bad guys and leave our hard working reps alone.  No one picks a rep because they give a good sandwich.


Jun 10, 2009 06:34 AM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Title reps really can't do anything any more.  No water, snacks, education, etc.  The ones I've talked to are feeling confined but following the new rules.

Jun 10, 2009 03:40 PM
Mark Velasco
West Shores Realty - Whittier, CA
Top Producing Broker Associate

Wow. They really want to make an example of this person. If you don't play by the rules...then be ready to pay.

Jun 11, 2009 02:31 PM
Elena Martinovici
MY HOME GROUP 602-321-1273 - Phoenix, AZ
Associate Broker- Phoenix , Arizona


Jun 13, 2009 07:49 AM
Scott Hoen
Carson City, NV
Carson City Clerk Recorder / Public Administrator

I assume the larger Title Companies have compliance officers that discuss issues with one another and therefore the reps get turned into their internal compliance group who connects with the competitive group to cease any action deemed to be improper and those complaints don't make it to the DOI.  The DOI has to make a point of someone and they just happen to be on the list of complaints they received to take action and investigate

Jun 13, 2009 08:29 AM
Scott Hoen
TitleRepSolutions - Whittier, CA

Property profiles from Title Companies in California are really no more than a cover sheet with ownership information, physical characteristics and tax assessment data.  Everything is being eliminated including deeds and comparable sales.  Data is still available but the real estate professional must go to other sources AND must subscribe to a system with the expense shifted to the real estate professionals.

Jun 24, 2009 06:47 AM
Cheryl Johnson
Highland Park, CA

What Scott said. 

It also seems odd to me that much of the info that California title companies can no longer provide to their clients in "profiles" is basic public records info, maps, deeds ... stuff that is readily available online from internet start-ups.

We have fallen down the rabbit hole.  :-)

Jun 24, 2009 11:41 AM
Al Dobbs
ADD Real Estate - North Chicago, IL

What no more free food--hate it when the government gets involved.

Jun 24, 2009 05:19 PM
Cheryl Johnson
Highland Park, CA


Yes, no more free food.  BUT the bigger issue is no more free INFORMATION either.

California title companies will no longer provide COMPS in their profiles.  They will no longer provide maps with the comps pinpointed.  They will no longer provide copies of recorded deed and liens.  They will no longer provide lists of neighboring property owner names.

ALL of these items are public record.  Title companies simply provided a convenient service by making the information easily obtainable from one place.


Jun 24, 2009 10:46 PM
Al Dobbs
ADD Real Estate - North Chicago, IL


     That is  too bad.   I do not understand why providing the information for free is a problem.  Because like you have informed us--"...items are public record." The title company was saving the real estate professional some time and money. The costs of doing business have just gone up.


Jun 25, 2009 05:34 AM
Scott Hoen
Carson City, NV
Carson City Clerk Recorder / Public Administrator

The California Department of Insurance is being quite clear in regards to the current statute 12404.1 on the Insurance Code.

A property profile may include ONLY the following:

Names of owners of record of a specified property

A description of real property

Property characteristics as defined in section 408.3 of the Revenue and Taxation Code meaning;

Year of construction of improvements to the property, square footage, number of bedrooms and bathrooms of all dwellings, the property acreage, other attributes such as pool, number of units.

Comparable sales, lender information, phone numbers, tax information, community information, mapping all will NO longer be provided by a Title Company in the State of California. 

Again, there are other sources for the information -- real estate professionals will have to locate them and pay for them.

The California Department of Insurance is trying to drive down marketing and service costs for a Title Company and in the process have shifted the cost to the real estate professional.  The Department of Insurance goal of reducing marketing expenses with the hope of decreasing the price of title insurance to consumers is just that, a goal -- Title Companies in California continue to raise their rates!

Jun 25, 2009 05:50 AM
Gary Psotka

This is comical. 

First of all title fees are requlated.  If you're worried about the Consumer, lower the title rates.

Secondly, I'm not sure how the $5.00 worth of Costco Oatmeal and Raisen cookies that our title rep used to bring us once a month is considered bribery.  LMAO.  

Not to mention that taking away Property profiles, generally public information to the masses, is ludicrous and has no economic benefit whatsoever to the consumer and only passes on yet another expense to the Realtor, or Small Business Owner. 

Is this really the highest and best use of the commissioners office and my tax dollars?  Doubtful.

Jul 06, 2009 02:58 PM