The Colorado Division of Insurance announced Wednesday it has suspended 11 “sham” title- insurance agencies as well as the license of Douglas P. Farr, the title agent overseeing those agencies.
Farr’s companies were the first investigated in a broad probe this year of the ownership behind more than 500 title-insurance agencies registered in the state.
The division has cracked down on title-insurance agencies that provide alleged kickbacks to mortgage brokers and Realtors, a practice that may cause homebuyers to pay inflated premiums.
Division investigators determined that some of Farr’s agencies performed no title services and had few or no employees, and that at least one had no physical office. They also allege that $500,000 in premiums due an underwriter, Attorney Title, were misappropriated.
“Sham agencies affect the ability of legitimate title agencies to compete fairly in the marketplace,” said state insurance commissioner David Rivera. “It’s our goal to take appropriate regulatory actions to level the playing field and ensure a competitive title-insurance marketplace that will benefit Colorado’s consumers.”
The title-insurance agencies suspended Tuesday were: Neighborhood Title Services, CPR Title, CPR Title of Crested Butte, Fidelity Title, First Choice Title, Freedom Title & Escrow, KD Title & Appraisal, Lenders Title, Top Notch Title, Tri City Title and Uptown Title & Escrow.
Farr on Wednesday evening accused the Division of Insurance of acting inappropriately and ignoring his repeated efforts to address their concerns.
“We never tried to dodge them,” he said. “We never stole a penny.”
Farr and his then-wife, Bethany Newcomb, founded CPR Title in April 1999 in the guest bedroom of their Westminster home, according to a profile of the company in The Denver Business Journal.
Four years later, they had grown it to a 187-employee outfit, with operations in Colorado, Utah and North Carolina.
The Insurance Division and Farr are scheduled to meet Dec. 9 to discuss a hearing date.
Colorado investigators drew national attention on alleged title-insurance kickbacks in February when they announced First American Title had agreed to pay $24 million to about 120,000 consumers in five states.
In other actions, the division barred Arthur M. Vasquez, president of the defunct AltaVista Title Co., from the business and reached an agreement with Horizons Title of Broomfield to pay $10,000 to settle kickback claims.
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
