3 California title insurers to pay fines

Three of the state’s largest title insurers agreed to halt what officials called a kickback scheme that cost home buyers $25.4 million and will pay more than $38 million in refunds and fines, according to California Insurance Commissioner John Garamendi.

Garamendi said the three companies -- LandAmerica Financial Group Corp., First American Title Insurance Co. and Fidelity National Financial Inc. -- and their subsidiaries had paid kickbacks to lenders, builders and real estate agents to steer title insurance business their way. The builders, lenders and real estate agents had created reinsurance companies that were nothing more than shell outfits, he added.

The three insurance companies and their subsidiaries would charge homeowners buying title insurance additional reinsurance fees of hundreds of dollars each, Garamendi said. The insurance companies, in turn, would send the additional fees to the reinsurance companies owned by the builders, lenders and real estate agents -- the very same entities that referred the homeowners to the insurance companies in the first place.