RE-Insider covered the fate of Fidelity’s TransactionPoint program as they were compelled to Pay HUD $4.5 million to settle alleged RESPA kickbacks violations.
For those of you that missed this story HUD claimed Fidelity and its affiliates and subsidiaries engaged over many years in a widespread campaign to pay real estate brokers kickbacks for the referral of real estate settlement services, including home warranties and title insurance. Additionally an agreement was reached between the California Department of Insurance (CDI) and Fidelity National Title Insurance Company to resolve allegations of illegal kickbacks paid out from 2003 to 2011.
But was any of that money used to help indemnify brokers who accepted the TransactionPoint program? At the time we reported this story, we wondered if Fidelity would give HUD the names of the brokers who accepted TransactionPoint program. And would these brokerages have to wait and see which enforcement agency might come after them?
Well the wait is over as La Jolla based law firm, Bottini & Bottini, filed two class action lawsuits in the past month naming over ten individuals at Alain Pinel and Pacific Pinnacle for violation of California Civil code 1710 (3), California Business and Prof. Code 17200, fraud and others.
This may be only the beginning of a nightmare of unimaginable size for the real estate professionals who entered the TransactionPoint program and received access fees.
We know that Fidelity actively marketed Transaction Point to brokers encouraging the use of its pay per click system in settlement services as a way for the broker to generate revenue. One Keller Williams broker publicly called this a “pay per click system.”
Are there home sellers or buyers that were not informed that their broker received a referral fee in exchange for an order placed through Transaction Point on a transaction involving their home? Will Fidelity indemnify brokers against such a lawsuit?
We will reach out to the plaintiff’s lawyers and investigate if other lawsuits are likely to follow.
What do you think about these class action lawsuits? We’d love to hear from you!