On October 28, 2015 there were 576 Active and Pending listings in SWMLS that included comments indicating the closing will be with a specific title company. Due to the high number of listings that may be in violation of the RESPA act you are encouraged to review the RESPA rule Section 9 and asked to review your own listing comments to ensure your listing is compliant with RESPA.
Requiring potential buyers and buyer’s agents to use the listing office’s preferred Lender or Title Company for closing could be a considered a RESPA violation.
What RESPA rule is this? Section 9: Seller required title insurance
Section 9 of RESPA prohibits the seller of a home from requiring the buyer to use a particular title insurance company. If the seller violates this provision, the buyer may file suit against the seller and recover damages in an amount equal to three times all of the title insurance fees paid by the buyer.
What’s wrong with the 576 listings? The comments on the 576 listings that were reviewed contain numerous examples of potential RESPA violations such as “Closing with Mickey Mouse at XXXX Title Company”, “Closing with XXXX Title Company” The company names used in the examples are not real and were replaced to hide specific details of the listings.
When listing a property in SWMLS please be mindful of RESPA rules regarding your seller’s request to use a certain Title company for closing. SWMLS does not have authority to enforce potential violations of RESPA and SWMLS REALTORS are encouraged to learn more about these laws.
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