Oklahoma considers bill regulating real estate partnerships
|January 26, 2006|
State law would prohibit kickbacks
A proposed new Oklahoma law prohibiting kickbacks and excessive fees in the home-buying process will be considered by that state's legislature.
The bill, S.B. 1689, was pre-filed by Republican Sen. Brian Crain. Dubbed the "Oklahoma Real Estate Settlement Practices Act," it mimics the federal Real Estate Settlement Procedures Act (RESPA), which was enacted in 1974 to provide for the advance disclosure of closing costs and to prohibit kickbacks.
A related bill prohibiting real estate professionals from requiring the use of affiliated business arrangements as a condition of obtaining settlement services is currently under consideration by Colorado's legislature.
The new legislative proposals come in the wake of scandals involving the title insurance industry that arose in 2005. Insurance regulators in Colorado in February launched an investigation of nine Colorado title insurers for alleged kickback schemes said to result in overcharges to consumers. The probe sparked dozens of similar investigations nationwide, including probes in Florida, Washington, Hawaii, California, Oklahoma, Minnesota and Washington.
The Oklahoma bill declares that an "emergency" exists, making the act necessary.
"The legislature has found that significant reforms in the real estate settlement process are needed and the gist of federal law should be adopted in Oklahoma law to allow the Insurance Commissioner to facilitate local enforcement of such laws," the bill states.
The proposed act would create definitions of real estate settlement practices and laws for the state similar to the definitions made by the federal law. If passed, this act would become effective July 1, 2006.
The act would also incorporate the test of the current RESPA law regarding servicing and escrow requirements as well as specific prohibitions and requirements concerning the structure and disclosure of affiliated business arrangements and kickbacks or referral fees.
The act gives the state's insurance commissioner the power to investigate facts, conditions, practices, or matters necessary to aid in the enforcement of the provisions of the act. To aid in the investigations, the commissioner would be authorized to hold hearings and require by subpoena the attendance and testimony of such witnesses and production of documents as deemed advisable.
Copyright 2006 Innam News