Professional Documents
Culture Documents
_STATE OF WASHINGTON
OFFICE OF THE INSURANCE COMMISSIONER
BASIS:
1. Modus Technologies, Inc. is a foreign corporation registered in Washington State
on February 1, 2018 as "an online real estate closing platform". Modus Technologies, Inc. has
registered "Modus Technologies" and "Modus" as trade names with the Washington State
Department of Revenue.
2. Modus Title LLC ("Modus Title") is a resident business entity title insurance
producer first licensed in Washington on August 30, 2019. Modus Title has the following "doing
business as" (dba) names registered with the Insurance Commissioner: "Modus", "Modus
Closing", "Modus Escrow", and "Modus Title & Escrow".
3. Modus Title has also registered the trade names "Modus" and "Modus Closing"
• Earnest money deposits, document storage from real estate transactions, wire transfers,
notary services, complimentary home books, farming reports, pre-listing materials to
give a competitive edge on the next listing presentation, and 24/7 concierge service.
for using Modus to arrange for these services. Nor does Modus receive any compensation from
the realtor to use the platform for the other offered services.
10. In addition, the platform states that Modus is a distinct entity from Modus Title
LLC, and that use of the platform does not require the use of Modus Title LLC.
Closings were moved from other title companies to Modus Title LLC
Unfortunately we are having to switch the escrow portion to Modus for the [L.S.]
transaction because of the contractors doing repairs.
13. The Insurance Commissioner contacted D .B. who confirmed he used the services
of Modus Title one time because he had a client who required renovation work for the home sale,
and those services were not charged until the closing of escrow.
14. In a text message provided by Fidelity on April 3, 2020, another realtor, "J.R.",
said:
Sorry, this transaction is moving to Modus. Buyers negotiated this through inspection so
they can get a free warranty from escrow.
15. The Insurance Commissioner contacted J.R. who confirmed he used the services of
Modus Title one time. He was selling a house using Ticor Title, but the buyer wanted a home
warranty. The buyer's agent, L.Y. of The Cascade Team (see below), identified that Modus
provided a free warranty. As a result, the buyer requested the switch to Modus Title. It was J.R. 's
understanding that the free warranty was only available to the buyer if escrow and title services
were switched to Modus.
16. Finally, in a March 29, 2020, Addendum to Purchase and Sale Agreement
between buyers, "M.B./A.B.", and seller, "A .C.", the closing agent was changed as
follows:
Closing agent will change to Modus Escrow whom will provide a home warranty for the
buyers.
Modus' Statements
17. In a December 9, 2019, email from Steve Theodore ("Theodore"), a Modus in-
market Growth Executive, to Chicago Title Company, Theodore explained:
An interesting side benefit of partnering with us for escrow is that you can even leverage
our amazing Staging Boost program to help you deal with post-inspection results when in
contract, meaning your seller would be able to have needed repairs performed with no
money down, and then the fees would be paid to contractors out of net proceeds when the
home closes.
18. Further, at a January 29, 2020, presentation to a real· estate agency found on
Y ouTube, Theodore said, "From the buy side, if you didn't have the ability to dictate who was
doing escrow on a deal, but it would be a creative way to write in Modus if you could kind of talk
about some of these things [Staging Boost] so effectively you are selling Modus from the buy side
whereas we are usually talking to a listing agent."
19. Modus is acting as an agent or other representative of Modus Title, and is directly
and indirectly offering a "thing of value" to influence the referral of title insurance business,
Modus' disclaimer notwithstanding.
20. Fidelity provided the following communications between Modus and various real
estate agents:
• A February 5, 2020, email written by Danny Taylor, Partner Success Executive for
Modus/Modus Closing (Daniel.taylor@modusclosing.com) to real estate agent, Erin
Myers, identifying Modus as "a tech-powered Title and Escrow company.... Please
see attached, our Staging Boost program. These are digital flyers, I can, of course, get
you co-branded material if you wish." The email contains a disclaimer that any title or
escrow company can be utilized.
Realtor Erin Myers ("Myers") signed a declaration attesting, in part, that she used
Modus one time for the convenience of doing everything online in one place. Myers
said that Modus' selling point was that everything could be done through their
company, from the preparation of documents to closing.
• An April 17, 2020, email sent by Lane, Growth Executive for Modus
(jessica.lane@modusclosing.com), describing Modus as the fastest growing Title &
Escrow Company in the nation. Included in the email is a description of Staging Boost,
which allows clients to defer payments up to $55,000 to prepare their home for sale,
arid Modus coordinates the contractors. In addition, Modus provides "Transaction
tracker," "l 00% Secure Digital Earnest Money Deposits" by phone, complimentary
mobile notary service and courier options, 24/7 concierge services, and List Assist
through Virtuance Photography. The emails contain a postscript: "PS - Ready to open
title? Visit Modustitle.com anytime, anywhere to begin", as well as a hyperlink to
Modus Title.
Lane also included a "Competitive Comparison" chart in the email, comparing the
services offered by Modus to three other title companies: Old Republic Title Company,
First American Title, and Fidelity National Title Agency.
• A June 4, 2020, email from Lane of Modus attaching the "Greater Seattle Housing
Report", offering co-branding to the recipients, and providing a postscript hyperlink to
www .Modustitle.com.
• A June, 2020, Instagram post showing the Greater Seattle Housing Report co-branded
with both Modus' logo and real estate agent, D.H., of Compass Real Estate.
21. In a December 9, 2019, email to realtor, J.S., Modus Growth Executive, Nathan
Whalen, said Modus offers the following:
• Title and Escrow - "Team with over 50+ years of experience"
• Staging Boost
• Earnest Money Deposits
• Complimentary HomeBooks, Farming Reports, and Pre-Listing Materials to give you
a competitive edges at your next listing presentation; and
• 24/7 concierge - "Your very own dedicated home closing team."
22. The Insurance Commissioner documented that the HomeBooks offered by Modus
Title, doing business as Modus and Modus Closing, are valued at $6, but were offered as
"complimentary" through email solicitation to real estate agents promoting Modus. Modus
provided sample invoices for Home Books and Farming Listings identifying a billing of $6.61 per
book/listing charged by "The Modus Team" to the real estate agent.
23. Modus responded as follows:
• Modus Technologies and Modus Title are two separate entities, with separate offices,
and operate independent websites that do not link to each other. Jai Sim is the co-
founder and Executive Chairman of Modus Technologies, and since Modus
Technologies owns Modus Title, Mr. Sim occupies the position of Managing Officer
at Modus Title.
• Modus Title and Modus Escrow do not benefit from Modus Technologies' software
platform. Brokers have made over 200 transactions through the platform without using
Modus Title.
Brokers were instructed they were free to use any title insurance company.
• Modus Technology, a separate entity, makes home books and farm reports available
for purchase ($6) by real estate brokers, who are invoiced quarterly.
31. WAC 284-29-205(12) defines "thing of value" as anything that has a monetary
value. It includes but is not limited to cash or its equivalent, tangible objects, services, use of
facilities, monetary advances, extensions oflines of credit, creation of compensating balances, title
company employee time, advertisements, discounts, salaries, commissions, services at special
prices or rates, sales or rentals at special prices or rates, and any other form of consideration, reward
or compensation.
32. WAC 284-29-215(2) states that except as provided in subsection (1) of this section,
a title company must not directly, indirectly, by payment to a third-party or otherwise, use any
means of communication or media to advertise on behalf of, for, or with a producer, including but
not limited to:
(a) Advertising real property for sale or lease unless the property is owned by the title
company;
(b) Advertising or promoting the listings of real property for sale by real estate licensees;
(c) Advertising in connection with the promotion, sale, or encumbrance of real property.
37. RCW 48.02.080(3)(a) states that if the Insurance Commissioner has cause to
believe that any person is violating or is about to violate any provision of this code or any
regulation or order of the Insurance Commissioner, he or she may issue a cease and desist order.
38. The Respondent's actions described herein violate the following Insurance Code
provisions that include: RCW 48.29.210(1) and RCW 48.29.210(2) [inducements prohibited];
WAC 284-29-200(6) [engaging in a scheme to avoid regulation]; WAC 284-29-215(2), WAC 284-
29-215(3) and WAC 284-29-260(6)(i) [governing the prohibition of advertising with producers
of title business]; and WAC 284-29-255(1) [governing the provision ofnontitle services].
39. Any violation of the terms of this Order by the Respondent and its officers,
directors, trustees, employees, agents, and affiliates or the Respondent's failure to fulfill or perform
its contracts subject to this Order will render the violator(s) subject to the full penalties authorized
by RCW 48.02.080, and other applicable sections of the Insurance Code of the state of
Washington.
The Respondent has the right to demand a hearing in accordance with RCW 48.04.010,
WAC 284-02-070 and WAC 10-08-110.
This Order shall remain in effect subject to the further order of the Insurance
Commissioner.
MIKE KREIDLER
Insurance Commissioner
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TIM ASCHER
Insurance Enforcement Specialist
Legal Affairs Division
CERTIFICATE OF MAILING
The undersigned certifies under the penalty of perjury under the laws of the state of
Washington that I am now and at all times herein mentioned, a citizen of the United States, a
resident of the state of Washington, over the age of eighteen years, not a party to or interested in
the above-entitled action, and competent to be a witness herein.
On the date given below I caused to be served the foregoing Order to Cease and Desist on
the following individual(s) by email and by depositing in the U.S. mail via state Consolidated Mail
Service with proper postage affixed to:
CT Corporation System
Registered Agent for Modus Technologies, Inc.
711 Capitol Way South, Ste 204
Olympia, WA 98501
(LL~
~PACE
Legal Assistant
Legal Affairs Division