Home Topics Real Estate Washington revokes Compass' closing services firm's license

Washington revokes Compass’ closing services firm’s license

Modus, the closing services software company, allegedly violated state laws regarding co-branding, social media advertising, and mechanisms used to attract customers.

Modus, a Compass title and escrow software company, is expected to expire its license from Washington State on April 1 for a variety of violations, including social media violations and co-branding, as well as the alleged products it contains used to withdraw customers from other companies and to lure away the allegedly not offered services without title.

The move follows complaints the state received from two competing title companies.

“The insurance commissioner opened an investigation after complaints were received from two title companies in Washington,” the document said. “Both companies claim that the licensee offers discounts and incentives through a technology platform operated under the trade names Modus Technologies and Modus.”

Part of the complaint revolves around Staging Boost, a platform that works with ZingFix, a third-party provider, to ensure the cleaning, landscaping, staging and renovation of listing preparations with a deferred payment. The complaint states that Modus used this partnership to lure clients away from other title companies.

Washington state law prohibits any title insurer or agent from directly or indirectly giving any person a fee, setback, or other valuable thing as an incentive, payment, or reward for placing a business, referring to a business, or initiating a property insurance business give either to the title insurer or the title insurance agent or both ”, according to the state law.

The complaint also alleged that Modus offered or offered non-title related services in six separate cases without charging or receiving a fee the value of which corresponds to the services provided – which is determined by the market price – and in violation of state law .

The other allegations have to do with social media advertising violations and co-branding violations.

Compass acquired Modus, a Seattle-based title and escrow software company, for nearly $ 50 million in October 2020 to build a platform for its real estate agents. With the acquisition of KVS Title, the company has entered the field of title and fiduciary services in the past few weeks.

The announced suspension of the Modus license in Washington could potentially significantly affect the development of this platform for agents in Washington, where Compass has a large presence following the acquisition of Avenue Properties in 2018.

A spokesman for Modus confirmed that the company will appeal the decision.

“Modus is appealing the decision of the insurance commissioner’s office and we look forward to working with you to quickly resolve any misunderstandings regarding our business practices,” the spokesman said in a statement. “Modus will remain operational throughout the appeal process while this matter is resolved.”

Email to Patrick Kearns


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