Posted on 03/09/2005 5:36:37 PM PST by calcowgirl
Insurance Commissioner John Garamendi said Wednesday he issued nine subpoenas to six companies -- including KB Home -- as part of a probe into illegal kickbacks in the title insurance industry Garamendi's office said the subpoenas come after four others were issued in February to LandAmerica companies and Fidelity National Title, two of the nation's largest title insurers. The nine subpoenas were issued last week. Other companies beside Los Angeles-based KB Home (NYSE: KBH) include William Lyon Homes (NYSE: WLS) of Newport Beach, Re/Max, United Home Mortgage Corp., Shea Financial Services of Aliso Viejo and Wells Fargo Home Mortgage. Garamendi said more subpoenas will be served. However, he gave no information as to who else could be targeted. Garamendi has worked with Colorado and Washington state insurance regulators to investigate several of alleged phony "reinsurance" contracts between title companies and subsidiaries of realtors, developers and lenders. On Monday, First American Title Insurance Co., a unit of Santa Ana-based The First American Corp., agreed to refund about $24 million to consumers after Colorado investigators accused the company of giving kickbacks to homebuilders, real estate agents and lenders. When the investigation was first announced, First American Title (NYSE: FAF) denied any wrongdoing. Under the alleged schemes, the title insurers agreed to give about half of the premium on title insurance policies to "captive" reinsurance companies created by the other conspirators. The parent companies of those "captives" in turn would refer business to the title insurer. Garamendi said the practice violates the law and is designed to kick back a large share of the title-insurance premium in exchange for the referral of the customer to the title company. Garamendi said the violation causes title insurance rates to increase. As part of his investigation, Garamendi said he has scheduled an April 4 hearing at the Ronald Reagan Building at 300 S. Spring Street in Los Angeles. At the hearing, he will hear testimony from executives of LandAmerica and Fidelity, which together control roughly 45 percent of the California market. First American Title, which has cooperated with investigators, controls about 30 percent of the market. KB Home (NYSE: KBH) builds homes in Florida, North and South Carolina, Georgia, California, Arizona, Nevada, New Mexico, Colorado, Illinois and Texas. William Lyon (NYSE: WLS) focuses mostly on starter homes.
An Insurance commissioner doing his job.
My wife and I just built a new home last year and we will never again use a lender referred to us by a general contractor, or vice versa.
I don't know if the allegations are true or not. Garamendi wants to be our next Governor.
However, the list reported includes some of the biggest donors to the current Governor and his campaigns.
An Insurance commissioner doing his job.
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Sue' em All and let God sort 'em out. ;-)
looks like he'll soon have a hat in the ring for the dems Gub run in '06, besides angelides and lockyer.
That industry is SO government-regulated, that for you to even point out the obvious hustle is a slap at what you and your fellow Dem - do. So you offer the hope of more useless and expensive regulation, which apparently doesn't even touch on graft - which apparently is the way of doing bidness in Dem-dominated government.
Come clean, John.
How right you are!!!
Carry_Okie! I find this move in the developer/political arena VERY interesting in view of many of your prior thought expressions!!!
calcowgirl! Alex Spanos of Stockton, (owner of the San Diego Chargers) has been one of the GANG-GREEN Governator's biggest backers! Phil Angelides, a "big greedy demonic developer" himself, will be backed by Angelo Psuckallofus (I can't remember how to spell his name) of Sacramento are lined up on the Demonicrat side and Geramendi desperately needs to be backed by another big liberal/leftist poker player and I'll just bet he's trying to force Kaufmann & Broad (KB Homes) to back his bid!!! (what an epiphany you've just given me!)(wow!)
I think I'm beginning to see how (and why) the Sierra-Nevada CONservancy land control grab was blessed by the GANG-GREEN Governator, our alleged "Republican," after all!!! it's gonna be GANG-GREEN DEVELOPER WARS for ownership of CA's real estate market!!!
The "Growth/No-Growth" wars that have scarred my county were just a prelude to the war clouds growing over CA and the very next Governor's race!!!
It's all about controlling who gets to win.
Thank you! I'll re-read it today!!! It may have new meaning, at least for me...
BTTT!!!!!
Well I'm not sure! They are certainly a couple of strangely ambitious ducks that don't share the same party labels, but certainly are brimming with blinded ambition and vainity!!!
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