Last week, The Wall Street Journal published a fairly comprehensive article on title insurance (link)
It was a review of issues in the industry, most notably pressure on pricing. Buried deeper in the article were two items that haven’t seen national attention before – ABA conflicts of interest and advice for consumers to shop for title insurance before committing to a lender or real estate agent.
Also notable was a better treatment of the premium split between agents and underwriters. The WSJ went as far as to acknowledge that agents preform work to as part of their share of the premium. Progress is being made.
Conflicts of Interest Called Out
Finally, someone points out the obvious: Affiliated and company-owned title insurance operations are a major conflict of interest:
Yet people advising home buyers often have conflicts of interest. Some real-estate brokers, mortgage firms and builders own firms that act as agents for title insurers.
Unfortunately, the scope of the article didn’t allow for more elaboration. But the Pennsylvania Attorney General did. (link to follow)
Shop Early for Title Insurance
Too often, consumers are faced with the decision on title insurance at the end of a long shopping (or house hunting) process. Jack Guttentag, aka The Mortgage Professor, provides some sage advice:
Jack Guttentag, a finance professor emeritus at the University of Pennsylvania’s Wharton School who provides mortgage advice on the Web site www.mtgprofessor.com, advises home buyers to shop for title insurance online and to do so early in the home-buying process. When refinancing, borrowers should make sure they are getting the discount for title insurance that often applies on such transactions, says Mr. Guttentag.
Both pieces of information, in a well-read, national publication are key to starting consumers down the title insurance shopping path.
