The owners of Welles-Bowen Realty also own a holding company. That holding company and Chicago Title both own half of Welles-Bowen Title. Welles-Bowen Realty refers prospective buyers to Welles-Bowen Title for title services. In turn, Welles-Bowen Title contracts some of the referred work to Chicago Title. According to the 6th Circuit, Chicago gathers evidence relating to the title and Welles-Bowen Realty evaluates the evidence to determine the title’s validity. The Carters were unhappy with the arrangement. Believing that Welles-Bowen Title was a shell corporation used to funnel referral fees between Chicago Title and Welles-Bowen Realty, they filed suit. The Carters alleged that Welles-Bowen Title was a sham AfBA and that the arrangement violated RESPA’s Section 8 prohibition on the payment of referral fees in exchange for settlement service business.
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