Unnecessary Closing Costs: Good Article by Aubrey Clark

Aubrey Clark wrote a good article on unnecessary closing costs that is available at Content for Reprint. The article discusses a number of legitimate charges that are common in most real estate transactions as well examples of the many different extraneous and unnecessary fees and charges that are regularly added on. One area that is discussed is the charges that are associated with title insurance.

It is important to shop for title insurance

Aubrey's article once again reiterates the importance of shopping for title insurance. Like we have been saying at myClosingSPACE.com she discusses the fact that in most cases consumers are pushed to use their mortgage lenders captive title insurance company. She points out that much of the time these title companies are overcharging for their service and most consumers are simply unaware of this. She states that it is important that consumers pick up the phone book and get quotes from a variety of title companies. I would like to point out that the Internet has made this research much easier but the point remains that it is important to shop for title insurance to find the best price.

Don't pay uneccessary title insurance fees

Like we have been saying consumers have a choice and they can control the closing process. Taking the time to shop for title insurance can result in significant savings. And it really does not take that much time or effort. Do a little research and find a title company who is willing to charge a fair rate and work for you. It can make the process much easier on you and your pocketbook.

Opting Out of Owners Title Insurance

US News and World Report has a good article that discusses whether it is a good idea to opt out of title insurance. For the most part the article seems to favor purchasing the owners title insurance but the story begins with a home buyer who opts out of the owners policy. He believed that since there were only two previous owners that there would not be an issue with title. As the article correctly points out that even though the house had only two owners there may be liens placed by the previous owners of the land or their heirs, builders, or contractors. Title issues can arise when they are least expected.

Owners title insurance protects you

The lenders policy protects the lender and their investment. If a title issue arises years after you closed on a house the lender will be protected up to the amount that they are still owed through your mortgage. That does not mean you are protected. The only way to protect yourself is purchase owner's title insurance too. This is another reason to shop for title insurance. Make sure you are comparing apples to apples too. Verify that the estimate you are getting covers both the lender's and owner's policy and choose the title insurance company that best represents our needs and price point. Shopping for title insurance can save you money while still protecting you from title issues in the future.

Consumers Pay Too Much at the Closing Table: Yet Another Study Supporting Change in the Title Industry

A recent study, conducted by Dr. Susan Woodward, once again showed that consumers spend too much on closing costs. This study, titled A Study of Closing Costs for FHA Mortgages, analyzed 7,500 FHA mortgages that originated in May and June of 2001. Borrowers with similar or identical credit scores, loan terms, and mortgage amounts paid disparate amounts at the closing table. Even though there were some demographic differences that stood out even consumers who have similar demographic profiles were charged differently. In the end the report found one of the most important factors was that consumers simply do not understand closing costs and do what they are told by their mortgage broker, realtor, attorney, etc. It can be an overwhelming process and most consumers just want to get it done. Many do not realize that they could save a significant amount of money if they took a bit of time to learn about title insurance and closing costs by shopping around and doing a little bit of research online.

Just Another in a series of reports

While I believe this is another good study it is just reiterating what many of the title insurance bloggers and spokespeople have been saying for a while now. Closing costs are too high because consumers are being lead by their representatives in the real estate industry who may be receiving gifts or other compensation to refer their clients to a specific title insurance company. That company in turn passes on extra costs to the consumers to pay for those gifts. The consumer does not notice because he/she is overwhelmed by the whole process and relying on their representatives to look out for their best interest.

How do we fix it?

These studies do a great job of bringing more attention to the problem but IMO they are not reaching all of the right people, the consumer. Most of the people who are reading these reports are real estate or mortgage professionals. Consumers do not pay attention to reports like this until they need to buy or refinance. That means it is up to title companies and other real estate professionals to utilize these studies to make our service more consumer friendly. If we take the time to help consumers understand the whole process, let them know that the ultimate choice of a title insurance company is up to them, and charge them honestly we can help make the industry stronger and more well respected.

We are trying at myClosingSPACE

That is exactly what we have tried to do at myClosingSPACE.com. Our mission is to bring title insurance into the forefront and help consumers understand it so they can make their own decisions and save money on closing costs. Even if they do not use our service we want to make sure they are making their own choices while knowing all the facts. We will continue to push for consumer choice and attempt to provide useful information about title insurance to those consumers who are ready to buy their new home or refinance their current mortgage. There are other title companies who are doing the same thing and all of the information provided through blogs, studies such as this one, and other sources can help spread the message. Hopefully this will eventually lead to a change in the industry and put the consumer in charge. Change is difficult to achieve but with the flow of information inherent with the Internet we can continue to provide the information and hope that it reaches those who need it most, the person who is buying or refinancing their home.

Explaining the need for title insurance: New Series at myClosingSPACE.com

myClosingSPACE.com has developed a series of articles focusing on real life examples which explain the need for title insurance. Since title insurance is not understood by many consumers myClosingSPACE.com decided to put this series together to help them understand what title insurance is and how it can help them in a time of need.

Mortgage Lender Mistakes

The first article in the The Need for Title Insurance Series explores problems that can occur when a mortgage lender makes a mistake. The situation reviewed in this example focuses on a family that was facing foreclosure through not fault of their own. They kept up payments and were not behind in their mortgage so they were very confused and scared. The family contacted a title agent who went to work and found that the lender made a mistake and released their lien on the wrong property when it was paid off at the Roberts settlement. So due to a mistake by the mortgage lender they almost lost their house.

Thanks to Title Insurance

The title agent in this scenario had to navigate a large organization to get to the bottom of the problem. Once the issue was discovered the agent was able to clear the issue. The family was able to get back to living their lives without the fear of losing their home. Without title insurance they may have had no recourse and could have lost their house through not fault of their own. Title insurance agents get a bad rep but they are indispensable when an issue like this arises. Consumers should understand what can happen without title insurance and get involved with the process so they can not only save money but also know that they will be protected if an issue arises.