Title companies – and mortgage companies for that matter – are barred by federal law from paying real estate agents referral fees or otherwise giving real estate agents anything of value in exchange for sending them business.

Many states have similar laws.

California’s Department of Insurance accused First American in November of improperly providing cash, business expenses, accommodation, meals, entertainment and transportation to real estate professionals.

In the California settlement, dated Jan. 3, company officials admitted no wrongdoing but agreed to, among other things, monitor their compliance with the law and pay $10 million in penalties and reimbursement of state expenses.

Washington State also found violations but doesn’t plan to issue penalties against First American or other title companies.

In a report released last October, Kreidler said a 10-month investigation of 11 major companies doing business in King Pierce and Snohomish counties found all had violated the law. He said companies passed the enticement expenses on to customers.

First American spent, on average, more than $120,000 a month to subsidize builder and agent advertising, gifts, meals, tickets to sporting events, golf sponsorships, ski buses, shopping trips and a “symposium” aboard a boat during the Seafair hydroplane races, according to Kreidler’s report.

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