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Last week there was a great article in the Columbus Dispatch newspaper, “Independent Title Agents Sue”. A group of small, independent title agents is petitioning the Ohio Supreme Court to STOP real estate brokers, banks, mortgage companies from steering business to affiliated title companies.
In a nutshell, the independent title agents are suing the Ohio Department of Insurance for failure to protect the consumer and to enforce state laws against what it calls “the spread of kickbacks and referral schemes in the real estate industry” (aka, affiliated business relationships).
Good news, Ohio law prohibits banks, real estate brokers and mortgage companies from being licensed title agencies. But, since 1974 the federal Real Estate Settlement Procedures Act (RESPA) has allowed affiliated business relationships. In my opinion, overall RESPA has been great legislation that has helped protect the consumer. But, RESPA really dropped the ball in regards to affiliated business relationships.
Let’s hope the independent title agents will be successful with their lawsuit. I will keep you updated with future blog posts. “Affiliated business relationships” are really bad for the consumer. These relationships raise the cost of many title company fees with no benefits to the consumer.
In my opinion, if this lawsuit wins it could really open an “ugly door” into our state departments and agencies that are set up to monitor and regulate many industries, such as real estate, lending, financial securities and insurance.
The “average Joe citizen” would think these agencies are set up to protect the consumer. But, in many times, the actions and decisions of these agencies have worked to protect the industry that they are monitoring more so than protecting the consumer.
We have been mixing “big business industry” with politics for years. This has fostered an environment of 
“sleeping with the enemy” and/or “the fox is guarding the chicken coop”.
This is a dangerous mix of power, control and greed that has been dormant for a long time. If this lawsuit is successful, hopefully it will expose other agencies and open up a lot more questions.
If you can’t tell by now, I am no proponent of “one stop shopping”. The problems of affiliated business agreements are just a smaller component of the entire “one stop shopping” farce.
There is only ONE reason why big banks, insurance companies and/or real estate firms offer you the convenience of one stop shopping and that is profit and greed. It will almost never be in your best interest to make a major financial decision on one stop shopping.
If you need to buy or sell a home in Central Ohio and you are thinking about using the largest real estate broker in our market to help with everything (real estate transaction, new loan, home warranty, title services, etc.) then you need to be really careful. As Dr. Phil would say, “You need to get REAL” (or not real, if you know what I mean).
You need to do research and work to be a smart, informed consumer. Shop around, make phone calls, get multiple estimates or quotes. If you do your research you will make the best informed decision and you will be better off financially.
In my opinion, there has always been a public perception that the real estate industry has been notorious for kickback schemes and unethical referral arrangements. Eliminating or better monitoring of affiliated business relationships/agreements will be a good start toward improving our public perception. Let’s hope the Ohio Supreme Court can do the right thing!
After we fix affiliated business relationships we will move onto stopping one stop shopping. heh, heh, heh!
Here are some related links:
Ohio Department of Commerce (Real Estate, Mortgage & Financial Securities)
Division of Financial Institutions
Be careful out there!
My Buyer Broker Advocate! 
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