Wednesday, August 5, 2009
After a long history of infractions, culminating in hundreds of millions of dollars in fines and restitution payments, one frustrated California insurance department spokesman said because the industry rakes in so much cash, multi-million dollar fines were just "the cost of doing business." That was in 2005.
by Broderick Perkins
© 2008 DeadlineNews.Com
Unauthorized use of this story is a copyright violation -- a federal crime
Deadline Newsroom - The title and escrow industry is under the microscope again.
• After rejecting rate hike requests from the title insurance industry, Pennsylvania's Attorney General Tom Corbett is demanding title companies reduce rates, noting of the $585 million collected in title insurance premiums last year, 85 percent of the take paid for commissions.
• In Maryland, a "Commission to Study the Title Insurance Industry"is due to heap regulatory change on the state's title and escrow business later this year.
• California has had a running gun battle with the title insurance industry for decades due to kickbacks, withholding escrow funds, over charging and other issues that culminated in stiffer new laws and what appears to be perpetual scrutiny of the industry.
After a long history of infractions, culminating in hundreds of millions of dollars in fines and restitution payments, one frustrated California insurance department spokesman said because the industry rakes in so much cash, multi-million dollar fines were just "the cost of doing business."
If that sounds a lot like 2005, when virtually every state in the nation was investigating the title insurance industry, you aren't hearing wrong.
The $10 billion-a-year title insurance and escrow industry is under fire again -- if they were ever not under fire -- and this time heavy fire could come from the Obama administration's proposed Consumer Financial Protection Agency.
The agency would oversee many consumer financial products, including title insurance, which is now largely state regulated.
Critics say consumers pay too much for title and escrow services, are victims of price fixing, kickbacks and other ills.
The industry wants to keep regulations at the state level and out of the hands of the Feds, they say, because it's a local transaction.
The industry also typically denies wrong doing, insists it isn't exploiting consumers or legal loopholes and often blame their woes on misunderstood and misinterpreted regulations, over zealous regulatory enforcement and even uninformed consumers.
Nevertheless, title insurance industry also has a history of swiftly ponying up fines and instituting policy reversals and actually lobbying for regulatory change in response to investigations about questionable practices.
Yet, after decades of investigative scrutiny, the industry's reputation remains at stake.
DeadlineNews.Com Special: Title, escrow services under fire again
Part I: What is it this time?
Part II: Title, escrow services necessary
Part III: Shop around for title, escrow services
• See the historical archive, DeadlineNews.Com's Finance/Title Insurance Section
• See the investigative report, DeadlineNews.Com's Title Insurance Industry Under Investigation
• Click on the keywords below for more stories on this subject.
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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.
Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
• National Offbeat News Examiner
• National Consumer News Examiner
• National Real Estate Examiner
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