Maple Grove Real Estate Agent Denies Commerce Department Claims

Update, 12: 10 p.m. – Maple Grove real estate agent Brandon Doyle denies the allegations made by the Minnesota Department of Commerce.

In an email, Doyle told Patch he's been battling the allegations made by the department "for over a year now."

"At this point I've exhausted all of my resources and had to make a business decision to settle," Doyle said.

"The consent order is not an admission of guilt, it's unfortunate that the commissioner has taken such an unprecedented stance on this case," he continued.

"I will continue to focus on providing excellent service to our clients. To anyone whom feels they've been wronged by my actions, I'd love to take you out for lunch. However I will not apologize for giving our clients options, saving them money, and making sure their home closes on time. That's just part of the job."

Tuesday, March 22 – Minnesota Commerce Commissioner Mike Rothman announced that his department has fined an Elk River title insurance company and a Maple Grove real estate agent for a kickback scheme in which the agent allegedly steered nearly all of his clients to the company in exchange for valuable perks for himself.

On behalf of their clients, real estate agents often recommend title insurance and closing services for residential real estate transactions. However, it is the client who ultimately pays for these services as part of the transaction.

Under the terms of the enforcement orders, the Commerce Department states it has imposed a $45,000 civil penalty against Liberty Title, Inc., and a $5,000 civil penalty against real estate agent.

The Commerce Department alleges that Liberty Title and Doyle violated the federal Real Estate Settlement Procedures Act (RESPA), which prohibits giving or receiving any “thing of value” in exchange for referrals of home settlement-related business.

The Commerce Department alleges the following:

Liberty Title provided Doyle with numerous free meals, hotel accommodations in San Francisco and other perks between July 2014 and June 2015.

In the three-year period from 2013 through 2015, Doyle represented buyers and sellers in a total of 69 transactions. None of the 20 transactions in 2013 closed at Liberty Title, while eight of the 26 transactions in 2014 closed at the company. In 2015, by contrast, virtually all of the transactions (20 of 23) closed at Liberty Title.

Under the anti-kickback law, a violation may be established by a pattern of conduct and does not require evidence of a written or oral agreement between the participants.

The enforcement actions are part of a continuing investigation of potential violations of anti-kickback laws in Minnesota’s real estate industry, according to a news release.

The Commerce Department said it recently took similar action against TitleSmart, a Maplewood-based title insurance company that hosted wine-and-dine boat cruises with real estate agents and mortgage lenders to get their clients’ referral business.

“This is about protecting consumers and ensuring a fair marketplace,” Rothman, whose agency regulates the state’s real estate and insurance sectors, said in a statement.

“Buying or selling a home is a complicated process and a big financial decision. These transactions shouldn’t be tainted by conflicts of interest that can increase costs for consumers. When a company offers perks and prizes to get referrals from real estate agents, consumers can’t trust that their best interests are being served.”

Tips for Consumers

Rothman offers the following tips to Minnesota homebuyers about choosing a specific title and settlement services company:

• The consumer has the right to shop around and choose their own title and settlement services company in a real estate transaction.
• Make sure the company and the closing agent are licensed in Minnesota. Use the CommerceDepartment’s online License Lookup.
• If an agent recommends a specific company, ask why that company is being recommended. Does the agent have any business or marketing arrangements with the company? Will the agent receive any referral fees or other compensation (such as meals, free advertising, sports tickets or prizes) from the company?

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