Anti-Consumer Title Insurance Referrals in Colorado

Erin Toll, director of the Colorado Division of Real Estate, is investigating allegations that ReMax real estate brokers were given gifts or additional leads for pushing customers to use First American for title insurance. The allegation was brought by an anonymous source and ReMax is denying the claim. They contend that they it is a simple marketing agreement with First American and that it benefits consumers. Of course, the fact is that any marketing agreement that pushes consumers to an affiliated title company in a situation like this generally means the consumer will pay more.

Spin, Spin, Spin

ReMax is spinning the by stating that this type of marketing arrangement is beneficial to consumers by making it more convenient to them. This is just spin as I am sure most consumers would prefer to be given direction or at least a few options from which they could choose the best price. By steering them to one particular company they are not given any say in the matter and generally will be forced to pay more than they should. This is why myClosingSPACE.com encourages consumers to shop around and find the best price for title insurance.

Affiliated Business is not Marketing

Affiliated businesses and "marketing" relationships are not benefiting consumers and in many cases are having the opposite effect. When a consumer is pushed into choosing the affiliated title company they are not given the opportunity to make their own decision and may be paying much more than they should. I commend Erin Toll and look forward to the day when consumers are able to take control of the title insurance process.

Will Title Companies Embrace or Ignore the GAO Report

OK. I have discussed the GAO Report on Title Insurance here and there have been discussions on most of the prominent title industry blogs including Radical Title Talk. The GAO report outlines the problems with the way title insurance works and offers some insight into how it should be cleaned up. There are a few industry insiders spreading the word and trying to force a change but the question that still remains is whether the majority of title companies are willing to completely change their business models to comply with the recommendations in the report?

I believe that there are some title companies that will do so but I fear that there are still too many who will ignore the report and continue fleecing the consumer in their quest for the almighty dollar. For these companies change will on occur when consumers force it either through lawsuits or political action. It seems like every other month there is a new class action suit against a title company that is involved in illegal kickbacks or shady ABA's. These companies know the risks yet they continue to engage in these activities because they know that in most cases they will get away with it. The regulatory agencies policing them are not proactive and will usually only step in when enough consumers make complaints. If the government agencies are not willing or able to take control of this situation themselves it is up to the legitimate title companies and consumers to force them to.

It is important that the good title agents and title companies take the lead in getting the information out to consumers. Let them know they have a choice in title insurance and that they can take on an important role in changing the industry to benefit themselves. Talk to people you know who are not in the industry and point them to the report, educate them on how title insurance works, and help them understand that they can make a difference. Title insurance companies have flown under the radar for far too long and with the GAO report it is time to bring the industry into the public eye. Change can come from within and there are many who are doing just that but the bad actors will not change so it is up to the good title agents and consumers to step up force change.