A reader sends along this link to a company claiming to save you 35% on title insurance. I’m fifteen years away from real estate law, so I don’t know what to tell you. It might be a deal, or perhaps not. Back in the day, guys like me would go to Town Hall, dig around the land records, check out open building permits and, in general, make a nuisance of ourselves ensuring that our clients were getting what they paid for. That may have changed, but I still see Joel and Jeremy Kaye in the vaults, so someone still does it the old fashioned way. I don’t know – the problem is, you don’t know you have a problem until there’s a problem.
But the system could certainly use some modernization, so this might be a good deal. Your choice.
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Note to buyers – title insurance doesn’t protect you (neither is the appraisal for your benefit). It is to protect the bank loaning you money to buy the place. They just convinced you to pay for it.
Even so, how would you feel relying on a company of unkown and limited provenance to pay a claim (and provide a defense!) to some easement action twelve years from now?
It sounds to me like some financial ‘genius’ concieved that -title insurance- (read as ‘subprime mortgages’) are a cash cow because -no one ever sues over such things- (or, ‘real estate only goes up!’). You just low-doc or no-doc the ‘title search’ (mortgage approval), and pocket as margin what you would have spent acutally doing the work, less a little reserve. Collect the up-front, one-time premiums, pocket Beaucoup Bonus™, and when the first ‘unforseen’ eight figure claim taps out the reserve pool and sinks the whole deal “Who Cares?”
Likely strategically located in Ohio to take advantage of loose (or pliant) insurance regulation.
IS just had this discussion with Jeremy, particularly the part mentioned in the beginning of your post/rant.
My concerns about this were allayed when I was told that First American Title Ins. Co. was on the case.
If you want some good war stories about FATIC, just ask. Happy to inform you that a new round of title litigation starts Fri. IS loves it when FATIC is on both sides of the dispute.
Makes surveyors happy too, just like the lucky lawyers.
Entitle is legit, albeit backed by Plainfield Asset Management, a blog favorite. Most states allow for companies to file for lower title rates, but as Entitle tries to go direct to consumers, they do not pay sales commissions ( about 30% of costs at most title companies) and they try to pass on the difference to consumers. As CF should know, most title fees in Connecticut go indirectly to local real estate lawyers, who these days mostly review the documentation sent to them by large companies, as opposed to going to town hall to search the title themselves. I believe 60% is the current commission rate applied to real estate lawyers in CT, so the next time you are complaining to your lawyer about his fee and the cost of title insurance, think about this, a typical $10 million dollar sale in Greenwich will cost about $24000 in title insurance, of which about $15k will end up in the pocket of your attorney. I have no problems with commissions, just the ones which are typically undisclosed. In NY, to pick a opposite point of view, lawyers are not allowed to represent both the bank on title insurance for the loan and the title insurance for the buyer at the closing, as there is a clear conflict of interest, and they collect no commision, nor are they allowed to according to the ethics committee of the New York Bar Association..
Curmudgeon, there’s no doubt the lawyers run title insurance in this state, but that’s why, besides the fact I love them, I always tout the Kaye boys – aside from me , they were the only ones to disclose what we were getting from the the title insurance companies. But gee, policy premiums have gone up since my days in the trenches. I used to pick up maybe six hundred bucks and take it off my fee. I may have to dust off my law license. (But I do think the cut was 30, or maybe 40% of the premium; not 60%).
If you are promised 35% off on title insurance PREMIUMS, be sure you also compare the other costs and fees. Search and exam, closing, endorsements, etc. You may find you’re not saving 35% of the whole title bill.
I’m not sure what Mr. Moose’s issue is with title insurance. It sounds like he doesn’t quite understand it. Title insurance does protect owners when they get an owner’s policy, as most savvy buyers do. It’s a great deal, because title insurers are in the claims prevention business. They find problems in nearly 40% of all residential transactions and then fix them prior to closing. Often, the buyer has no idea there was even a problem. How about that for an easy to live with claim? The claims ration is then 6-8%, but when you factor in what was found and fixed before the closing, you can see how often problems arise. And remember, you only pay for title insurance once, not every year. What a great deal!
Well, Title Guy, I’m not sure I’d call it a great deal, but you’re quite right in pointing out that buyers should purchase an owners policy as well.