Santa Ana-based First American Corp. on Tuesday settled with New York Attorney General Eliot Spitzer, who led a probe into alleged improper business practices at the company and other title insurers.
As part of the settlement, First American and rival Fidelity National Financial Inc. of Florida are paying fines of $2 million each and agreed to stop paying rebates to favored customers, according to Spitzer.
The companies also agreed to seek title insurance rate cuts of 15% percent for all New York properties with a value of up to $1 million, Spitzer said.
First American acknowledged no wrongdoing in the settlement. The company said it doesn’t see the fines or rate reductions impacting earnings.
An investigation into other title insurers and title agents continues, he said.
The attorney general has investigated the title insurance industry for the past two years. Spitzer has looked at whether title insurers illegally paid secret rebates to favored customers, including real estate developers and national chain stores.
The probe also looked into referral fees to title agents, mortgage brokers and attorneys who delivered clients.
Colorado, California and Washington, D.C., officials have probed similar alleged kickback schemes in recent years.
Last year, First American and other title insurers agreed to pay $37.8 million to settle charges over alleged kickbacks brought by California Insurance Commissioner John Garamendi.
In an interview last year, First American Chief Executive Parker Kennedy said the company sought to clear up the dispute quickly and reimburse homeowners to take the spotlight off its homebuilder clients.
