Title Insurance: It's not just for the US

Canada.com has a good article discussing the importance of title insurance. Even though it takes place in Canada it shows how important title insurance is and how it can save homeowners thousands if they encounter problems. It is a cautionary tale and even though US and Canadian laws are different title insurance is very similar. It can protect homeowners from issues related to fraud. While this happened in Canada the same situation plays itself out in the US all the time.

A limited investment can save you money down the road

The situation explored by Canada.com is one of fraud. In the article Norman Gettel basically had his house stolen. Someone fraudulently took over possession of his home and he did not realize it until it was too late. When he finally found out he had to contract a lawyer and attempt to fight it. This has ended up costing him $10,000 so far. Even so he may still end up losing his home or paying more to keep it. If he would have had title insurance he would have been protected from this situation.

Title insurance is a small up-front investment for a lifetime of protection

This issue once again shows the importance of title insurance. A relatively small up-front out of pocket expense could have saved Mr. Gettel upwards of $10,000 and a lot of headaches. By purchasing title insurance when he bought his home he would have been protected from the fraudulent purchase of his home while he owned it. Many people complain about the cost of title insurance but that cost is outweighed by the peace of mind and protection it provides. At myClosingSPACE.com we try to provide the best of both worlds, the lowest price for the best protection so you can avoid these issues without paying too much.

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.

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.

Arrrggghhh...Another Title Company in Trouble

It seems like we can't get through one week without reading about a another title company in trouble with the law. When is the title industry going to get it? I tend to consider consumers as our customers and believe that we should provide them with the best service possible. It seems that too many title companies look at consumers as a piggy bank and will attempt to gouge them for as much money as possible.

Just a straight rip off

The latest news comes out of Balitmore, MD. Day Title in Baltimore has been shut because $2 million is missing from their escrow account. This news comes out of the Baltimore Sun and it provides another example of anti-consumer title companies using their position to rip off consumers for their own benefit. With the problems of the real estate industry hurting everyone you would think that title companies would try to change and become more consumer friendly. Too many title companies are short sighted though. Instead of changing their business model they decide they need to venture even further outside of the law. And once again consumers pay the price.

When will it change

I hope that title companies begin to wake up and start focusing on consumers but I fear it will take even more litigation. Some title companies have awakened and are starting to cater to consumers but not enough yet. Hopefully more and more title companies wake up and change their business models and stop ripping off consumers. There are a few out there and more pop up every day but as more and more companies face prosecution the tide may finally turn. Consumer friendly title insurance will become a reality when everyone realizes that ripping off consumers will cost more than it is worth.

Good Advice for Saving on Closing Costs but...

Kiplinger.com has a pretty good article about the proposed HUD RESPA reforms and some additional advice on how to save on closing costs even without the proposed changes. All in all they provide good advice but I wish they would have conducted a bit more research. If they had they could have presented more options for consumers to save on closing costs.

I know I am a bit biased

Yeah, I am biased but I don't believe they provided enough options related to title insurance. They mention Title Wizard and ALTA but there are other options out there. Title Wizard is for California only and ALTA is a purely informational site. It would have been nice if they would have provided some information about companies like myClosingSPACE.com who have built their business on offering the best value and service to consumers. Besides that there are great sources like Radical Title Talk, Source of Title Blog, TitleSuccess, and Title-Opoly which provide great information about title insurance for consumers.

I am glad Closing Costs are being discussed

Look, it is great that Kiplinger.com broached this subject to make consumers more aware of their options. Hopefully many do take their advice and conduct some research on their own. I just wish they were a bit more comprehensive in their research and offered more detailed information to arm consumers with greater knowledge about the options they have.

It's Title Insurance Lawsuit Time Again

So, my Google Alerts once again informed me of another lawsuit against some big title insurance underwriters. This lawsuit has been filed on behalf of consumers in Seattle and San Francisco by the law firm Hagens Berman Sobol Shapiro against Fidelity, First American, Chicago Title, and Old Republic. It seems to me that the title industry is unable to move away from the anti-consumer practices they are accustomed to and actually work for consumers.

According the release at Insurancenewsnet.com

"In each lawsuit the companies are accused of charging consumers duplicate reconveyance fees while the actual reconveyance is done by the consumer's prior lender and charged to consumers in their loan pay-offs. In some cases, the title companies try to justify these charges as "tracking" fees to ensure the reconveyance is complete -- but these "tracking" fees are generally three times higher than the rates available for "reconveyance tracking" services."

In the current downward cycle in the real estate industry you would think that title companies would try to become more consumer friendly but it appears that many are clinging to the old way of milking consumers for as much as they can. This needs to change. As more consumers get more information online they are becoming more educated and savvy. They are finding this information more and more and those who do not change and work with these consumers are going to pay the price. These consumers will begin to shop for title insurance and start making their own choice and taking control of the title process. And it is about time.

Title Insurance Underwriters Hit Hard

Well, the hits keep coming for the real estate and title insurance industry. A recent report at Housing Wire shows that all of the major title insurance underwriters are experiencing a drop in revenue and income. Obviously with the downturn in the economy in general and the housing market in particular this is not surprising.

Hopefully things start to pick up soon because everyone is feeling the pinch but it will be interesting to see if title insurers begin moving towards a consumer friendly business model. On top of the benefits for consumers this would also allow title insurance companies to be less dependent on those in the real estate and mortgage industries. Consumers still need title insurance and it may be a better business decision to focus on working with consumers instead of working with real estate professionals and fleecing consumers.

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.

More Title Insurance (Bad) Publicity

A recent article in the Boston Globe discusses more criticism being levied at the title insurance industry. It is a similar refrain. The main premise of the article is that title insurance in Mass is overpriced and that title companies are more concerned with lenders and brokers than the consumer. While this is generally true I do have one point of contention.

Towards the end of the article it states that there are no title companies who are marketing to consumers. There are plenty of title companies who do just that and I wish that writers would do some research online where they could easily find this information. If a little extra research was conducted they could highlight the problems in the industry as well as talk about the companies who are providing consumer focused service. This type of exposure could go a long way in helping to change the industry and letting consumers know they do have a choice when it comes to title insurance.

Junk Fees Redux

Here at the myClosingSPACE.com blog I have discussed the issue of Junk Fees being tacked on to title insurance & closing costs. Many consumers don't realize they are being charged extra for legitimate fees or even paying additional tacked on fees. The fact is that many do not see these fees until they actually sit down to close and in many cases they do not understand that they are being overcharged because they have not educated themselves.

That's why myClosingSPACE.com encourages consumers to learn about title insurance and shop for the company that suits their needs. One major issue to look out for is Junk Fees. It is important to make sure that you get a guaranteed quote and all fees and charges are disclosed.

Don't Let your Title Company Pile on the Junk Fees

Do your research and make sure the charges you will have to pay are legitimate and they are within the proper range based on the requirements for your state. Again, there are legitimate fees which cover the costs associated with the work done by your title company. These can be jacked up in order to extract money from unsuspecting consumers. In addition there are simply Junk Fees that get tacked on for no other reason than to extract as much from consumers as possible. Here are some examples of both.

The following are legitimate fees but make sure that you are being charged a reasonable amount of money and being overcharged.

• Insurance Premiums: Of course the premium is a legitimate fee. It is a fee to cover the title insurance premium. Some companies will pad this fee well above what the actual premium should cost. Most states set the rates but since many consumers are unaware of this they will overcharge. Look up your states guidelines and find out what the premium should be.
• Title Search Fees: The title search is a labor intensive process and is an important aspect of title insurance. It ensures that the house you are buying or refinancing does not have any liens or judgments against it. Look at the details when you get a quote or estimate and make sure you are being charged for the title search and there are not additional fees tacked on to this.
• Settlement Fees: This fee should be around $300-$400 and there may be discounts if the closing is held at the settlement company office or another select place. Again, there are fees that can be tacked on to this that are not necessary and would be considered Junk Fees.
  

The following are fees that can be tacked on simply to get as much money as possible. These can be avoided and in many cases are simply Junk fees. If any of these fees show up you should question the company who provided the estimate.

• Municipal Search Fees
• Wire Fees
• Copy Charges
• Travel Mileage for Closer
• Overnight Charges
  

We encourage consumers to shop around and get estimates from multiple title companies and make sure you get detailed breakdowns of all fees and charges. Also, make sure to find out if the estimate is guaranteed. Find the best price and choose the company you are most comfortable with. After all the final choice belongs to the consumer.

Wild West Title Insurance in DC

According to the Washington Business Journal the D.C. Council is considering legislation that would require title insurance agents to be licensed. The legislation would also require licensed agents to take part in continuing education for the title industry. This comes as a bit of surprise to me.

Unlicensed Title Insurance Agents????!!!!!

Sounds like a recipe for disaster to me. I am actually fairly surprised that D.C. does not currently require some sort of licensing for professionals in the title industry. I mean they only a very important function in the biggest purchase of most peoples lives. It seems that having competent and licensed professionals in this position would be a no brainer. I suppose it makes sense that D.C. is just thinking about this now, I really don't understand the majority of things that go on there. I suppose I could look at this as being better late than never.

Licensed and Education Title Insurance Agents are a Good Thing

Since D.C. legislators are actually considering this I will give them a pass but I still can't believe this is something they are just now considering. This should have been done a long time ago. Having committed and licensed agents who are dedicated to proper title work is good for everyone. From consumers to other real estate professionals. Unlicensed agents just doing their own thing can lead to far too much fraud and no real accountability. I am glad D.C. legislators are finally taking this up but they should not get a complete pass for waiting until now to do it.

FBI Investigating Countrywide

News of an FBI investigation of Countrywide Financial Corporation for possible securities fraud related to the Sub-Prime Mortgage Meltdown. The FBI is being tight lipped about the details of the probe and on whom they are focused. Countrywide has been hit hard by the shady lending practices they were all to happy to perpetrate when the housing market was booming. These practices came back to bite them and now they may be facing bigger problems related to those practices.

What About Consumers

This speaks to a bigger issue. While Countrywide promoted themselves as a consumer friendly company when they were handing out sub-prime mortgages the reality is that these loans were designed too take advantage of the consumers they were supposed to be helping. They were looking at the bottom line and only the bottom line. Consumers be damned.

How does this relate to title insurance?

One issue is that Countrywide controlled the loan process. They pushed borrowers to their title company. That way they could extract even more money from their consumers. Not only were consumers getting into loans that were almost guaranteed to put them in the hole they were also being overcharged at closing because Countrywide sent them to their chosen title companies.

Shop for Title Insurance

That is why myClosingSPACE.com encourages all consumers to shop for title insurance and take control of the closing process. Title insurance companies can serve as an advocate for the consumer and help them make proper choices when it comes to real estate transactions. As more and more cases like this arise and proceed it may force regulators to make a change but until then it is important that consumers work with their own title company to help them navigate the closing process. We want consumers to find a title company they trust and avoid letting lenders push them to use a company that has been established to help the lender extract the maximum amount of money from the consumer. It's the largest purchase most people will make so it is imperative that consumers control the process with help from an advocate who knows the ins and outs of the transaction.

Scott Wilson Tells it Like it Is

A recent interview on Marketplace at publicradio.org again highlights the biggest issues in the title insurance industry. In the interview Tess Vigeland talks to LA Times reporter Scott Wilson about the problems in title insurance. Some of the highlights.

Discussion on Pricing

"Vigeland: So, what do people want to see happen? Should there be some national standard for what we're paying on title insurance?"

"Wilson: One of the key things that needs to be addressed is kickbacks. There's a history in the title insurance industry of paying kickbacks to real estate agents, lenders and builders to bring customers. Those kickbacks can be cash. They can be gifts. Sometimes they're concert tickets, trips and so forth and those actually drive the price up rather than having price competition drive it down, so the consumer ends up paying for all those kickbacks. It's an illegal practice and it's widespread."

And on how it can be fixed

"Vigeland: And that would be, for example, you're using a certain real estate company and when you get to closing on the house, you are using whatever title insurance company they tell you to?"

"Wilson: Exactly. The consumer rarely chooses the title insurance company that they're using. If you're buying an existing house, you use the one your real estate agent chooses. If you're refinancing, it's the lender that chooses. If you're buying a new house, it's the builder."

"Vigeland: You have no legal obligation to go with that title insurance company that works with your real estate company?"

"Wilson: Federal law gives you the right to choose your own title insurance company, though sometimes the pressure is so heavy, it's hard for consumers to realize that."

There are some other good points (as well as a few that I don't necessarily agree with. You can read the transcripts here. The more the mainstream press discusses these issues the sooner the general public will understand that they do have a choice and should exercise that right.

See What Happens When You Charge Less...

Diane Cipa over at Radical Title Talk alerted me to this situation. It would be funny if consumers were not getting robbed but it is typical of the title industry. The state of New York is suing a group of title insurance companies for setting artficially high rates for title insurance. New York, like many other states, allows a consortium of title insurance companies to set title insurance rates. This is designed to protect consumers from outrageous rates but according to the lawsuit that is not what is happening, "They have done so by improperly including unregulated and unauthorized costs within their collectively set rates,".

The State Regulated Rates are Being Used to Overcharge Consumers

Instead of protecting consumers these title insurance groups are deliberately ripping consumers off. These groups are run by the biggest title insurance companies with lot of clout (and money) in the industry. They use this power to keep rates high so they can reap huge profits. I am happy to see the state of New York going after these companies but they need to do more. Get rid of the regulated pricing and allow REAL COMPETITION.

Try Offering Prices Below the Arbitrarily Set Rates

See what happens. By getting rid of these required rates you will introduce real competition. If a title company is able to find a way to offer lower rates while still running their business they should be allowed. And that is the crux of the issue. The reason state regulated rates were created was not to help consumers but to help the huge title insurance companies retain control of the market and continue to reap huge profits in the backs of consumers. The proof is in the pudding. These rates are not maximum charges but instead they are designed to keep any title company from charging less than the set rate. If you don't believe it start a title company and try to charge below the set rate. It won't be long before you have to fight the charges against you. Not because you are harming consumers but because YOU ARE NOT CHARGING ENOUGH. See, they don't really care if you charge more but if you charge less the big title companies will be all over you.

Real Competition is not Allowed

The groups that run these state organizations will do whatever it takes to avoid real competition in the title insurance market. They don't want it and if you try to bring competition you will be attacked. This needs to stop. I applaud the state of New York in this lawsuit and would love to see them take it a step further and dissolve these anti-consumer agencies and bring real competition the the title insurance industry.

Title Insurance Shortcuts Increase Risks....What a Surprise

So as I was perusing Google News for the latest title insurance stories I came across an article in National Mortgage News about First American Equity Loan Service stepping up their fight against fraud. Now I am all for cleaning up fraud in the title and mortgage industry. When fraudulent schemes are allowed to proliferate everyone in the industry (as well as consumers) pays the price. It does not matter if the fraud is committed by mortgage lenders, title agents, real estate agents, or consumers we all end up paying for it.

So First American is Cleaning up Fraud they helped create

I am not putting all of the blame on First American. After all, the actual perpetrators of the crime deserve the blame. BUT First American made it way too easy for them to run this scam. Basically, First American Equity Loan Services developed an alternative title insurance product called FACT. This was done so they could turn the loans around in a much quicker time frame to keep up with the proliferation of home equity loans. This was not real title insurance and while it sped up the loan process it left First American wide open for scammers. And the scammers caught on quickly. People began getting multiple home equity loans in the same day. Since the initial title search was expedited and incomplete this scam was not noticed until was too late. Now First American is trying to clean up this mess but they appear to be heading into another mess. This one will hurt consumers directly.

Automated and Overseas Title Searches

If you follow Radical Title Talk or Source of Title Blog you have probably heard a lot about automated title searches and using overseas "title searchers". I am not going to get too deep into the issues as both of those places have done a great job exposing and discussing the potential problems. What I am more interested in is the fact that First American is trying to clean up problems they helped create on one hand and on the other they are pushing products that will create more problems. It makes no sense to me. Maybe in 3 years we will read another story about First American cleaning up all the problems they helped create with their "Automated Title Searches"....

Great Post at Title-Opoly

Ed Rybczynski of the Title-Opoly blog recently wrote a post encouraging title companies to focus their marketing efforts on their past customers (consumers who they have worked with before). This is excellent advice and something that many title companies have overlooked.

As he mentions, in the past title companies did not really need to market to their past customers but in today's title business environment it is a necessity. The fact that the title business is moving much of its production offshore means that title companies need to actively market to consumers have used their services in the past.

myClosingSPACE.com has advocated that title insurance companies market to consumers. Much of our discussion has focused on finding new customers but actively marketing to past customers is an excellent way to reach consumers who may be in the market to refinance or even buy a new home. In today's slow real estate market title companies must diversify and open any new business opportunities that may be available. Marketing to past customers is a great way to do just that.

Even the Big Dogs are Getting Whacked on the Head

Far too many small title companies are struggling or even going out of business with the downturn in the housing market. Obviously as the housing market goes so goes the title insurance market but until recently those who were struggling were the smaller title agencies. Part of the reason was because they are getting by on the smallest margins and their entire revenue stream was tied to the housing market. On top of that many were competing with the large underwriters and they relied on referrals from real estate and mortgage professionals. All of these issues came to a head and those small companies who did not diversify their revenue stream and potential customer base (by marketing directly to consumers) are either just getting by or closing their doors.

Now even some of the large underwriters are feeling the pinch. Recent news shows that Fitch Ratings has placed all First American Corp. ratings on Rating Watch Negative with the expectation of lowering the ratings by one notch following the company's fourth-quarter financial report. Fitch is expecting First American to see a fourth quarter loss of $50 million. While First American is fully diversified and currently operates in five segments: title insurance and services; specialty insurance; mortgage information; property information; and a risk-assessment division, the title insurance division is hurting their bottom line. This is probably the reason they decided to spin off the title and specialty insurance business into its own entity.

The real estate slowdown is hitting everyone hard and even the big dogs are not immune. Maybe they will wake up and realize that they need to put consumers first instead of playing the back room games that made them so much money before. When the market was booming the consumer was looked at like an ATM machine. As long as everyone got paid and they could hide the kickbacks and charges everyone was happy. Consumers are getting smarter and the with the market continuing to slide everyone needs to change the way they do business. The consumer is the ultimate client in any financial transaction and if they stop buying nobody gets paid. I hope the industry can change and get this mess straightened out before too many more small (and maybe even large) title insurance companies go out of business.

Title Insurance Implode-O-Meter

Diane Cipa over at the Radical Title Talk blog is talking about putting together a title insurance implode-o-meter similar to the mortgage implode-o-meter. The mortgage implode-o-meter is a continually updated sites providing consumers information about mortgage lenders who have gone out of business or are close to it. I think it is a great idea if for no other reason than to provide another side to the real estate meltdown.

When you read and watch the news about the mortgage/real estate meltdown you hear about the mortgage lenders and real estate agents that have fallen on hard times but problems in the title insurance industry are largely ignored. Part of that is due to the way title insurance was marketed and sold. Because title insurance has been a behind the scenes aspect of the real estate process the public and the news does not really hear about it. This is also a big part of the problem that title companies are facing now. They relied on referrals from other real estate professionals and when the mortgage lenders and real estate agents go out of business the referrals dry up.

Too many title companies are now being forced out of business because they can't get the referrals any more. The title companies that are able to make their way out of this market are those who had diverse marketing plans focused on consumers as well as real estate professionals. They may not be able to make big profits but they will be able to survive until the market turns around.

I support Diane's idea and I am here to offer any assistance she needs to make this happen. Hopefully, it does something to help title companies see the writing on the wall before it is too late and change their business plan. Too many good people are losing their jobs and their businesses and if the remaining title companies don't take heed and change their business plans to be more consumer friendly we will see many more people on the unemployment line. I don't want to see that and maybe by putting this problem in front of those in charge we can make a change and keep others from suffering in this meltdown.

Diane, I am with you and if you need anything from me please don't hesitate to ask.

Don't Believe the Lies

Here at myClosingSPACE.com we talk to consumers all day long. Some are fairly well educated about title insurance while most are just learning about it. Even the most educated may be lead to believe a common lie told by real estate professionals involved in illegal ABA's. We hear it all but one common lie we are hearing is that a lender, builder, or other professional who is referring a title company can charge you more for their services if you don't use their referred title company.

This is an Outright Lie

Well, in a sense it is. They can charge you more but the law states that you have a right to choose your own title company. If someone is telling you to use the title company they referred of face a higher price they should be avoided. The most common reason they want to charge you more for using a different title company is because they are getting an illegal kickback to send consumers to their title company. The end result is that the consumer will end spending more for title insurance to pay that kick back. So while on the surface it may appear that you are paying less to the lender or builder that savings is all but eradicated when you overpay for title insurance.

Don't Get Ripped Off

An honest lender or builder will want to help you save money and offer you the best service. If they are unwilling to offer you the same rate for their service whether you use their title company or one that you chose they obviously do not have your best interest at heart. They simply want to get that kick back from the title company. Is that person worthy of your trust? IMO no, because they are more concerned about making a few extra dollars at your expense than giving you the best service and price they can.

Exercise your Rights

Shop for title insurance. If a lender is balking at you using a title company that you chose you may want to look at a new lender. In this market the consumer holds all the power. If a lender or builder wants your business they need to work for you. Exercise your right to shop for title insurance and use the company that you want. Not the company that is paying your representative for their business.