I think the business model for some industries in New Mexico must begin with:
1) Butter up legislators
2) Pass law requiring New Mexicans purchase product
3) Create product
Federal hearings reveal widespread title insurance rip-offs - Los Angeles Times:
The hearing produced bombshell revelations:• In Colorado, according to Erin Toll, that state's deputy insurance commissioner, kickback schemes in the residential real estate process are so pervasive that it's "impossible for those who play by the rules to compete." The cost of providing kickbacks is rolled into the premiums consumers are charged. Toll says the situation is similar in other states.
• An independent title insurance agent from Minneapolis, Douglas R. Miller, president and chief executive of Title One Inc., testified that in Minnesota, "the title insurance industry and the real estate industry have locked up almost the entire marketplace through controlled business schemes." The arrangements take various forms, Miller said, but they all add up to the same result: "steering real estate consumers into overpriced ancillary services for secret profits."
• State insurance commissioners nationwide recently have levied close to $50 million in fines and penalties against title insurers and title agencies for illegal kickbacks. In Colorado alone, $25 million has been returned to consumers. In California, three large insurers paid $12.5 million to settle charges alleging illegal kickbacks and referral fees.
• At the federal level, regulators have uncovered dozens of kickback and sham title agencies that exist solely to funnel referral payments back to realty brokers, loan officers and builders. Gary M. Cunningham, deputy assistant secretary for Housing, told the hearing about a $675,000 settlement recently with an unnamed home builder that used its own affiliated title company to illegally split consumers' title premiums with a major title insurance company.
Cunningham also described a title scheme in Memphis, Tenn., that kicked back portions of premiums to the real estate agents, mortgage brokers and home builders who referred consumers' settlement business to it. The agency paid $680,000 to settle the allegations, and participating builders paid an additional $226,000. Representatives of the title insurance and realty brokerage industries deplored the evidence of kickbacks and lawbreaking presented at the hearing, but argued that title premiums are not excessive, and that referral fee payments are not the norm.
In New Mexico, with generations of people having lived on some lands, there's actually reason to check titles and ownership of land. Ironically, though, in one of the few states in the nation where title insurance would have value, it has none since the NM legislature indemnified the title companies from any liability in the case the insurer conducted a faulty title search.
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