Part III: Title, escrow services under fire again

How not to demolish a building

Part III of III: Shop around for title, escrow services
Consumers don't have to wait for the Obama administration's proposed Consumer Financial Protection Agency before they get good service for a decent price. Everything in real estate is negotiable and title insurance is no different.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Spectial To The Deadline Newsroom - The $10 billion-a-year title insurance and escrow industry is under fire again -- if they were ever not under fire -- and some of the charges include consumer gouging.

If the Obama administration's proposed Consumer Financial Protection Agency passes into law, that agency would oversee many consumer financial products, including the title insurance, which is now largely state regulated.

But consumers don't have to wait for the political infighting to end before they get good service for a decent price.

Everything in real estate is negotiable and title insurance is no different.

Title insurance companies are hired, in part, to issue title insurance protection for home buyers and lenders. Lenders require the service to protect them against loss resulting from claims by others against your new home.

The insurance comes into play during the "closing" period of real estate transactions and is usually packed with escrow services.

• Escrow services provide a neutral third party, through which is funneled the paperwork, money, transaction instructions and other details of a home purchase or mortgage refinance.

All the expenses associated with title and escrow costs from tiny recording fees to title insurance premiums can add up to thousands of dollars, and those fees can vary widely from one company to another.

Here are some tips to get the best title and escrow services for the best price.

• Educate yourself. The title industry's American Land Title Association, its state affiliates, the American Escrow Association and your state's regulatory offices for title and escrow services, all provide consumer information.

For more independent insight, consider Sandy Gadow's mother-of -all-title-and-escrow-books "The Complete Guide To Your Real Estate Closing" (McGraw Hill $19.95), a model guide to title, escrow and other closing issues. Gadow's consumer-friendly partner Web site EscrowHelp.com, is likewise loaded with insight.

• Before hiring title or escrow services, obtain several referrals from those you trust, family, friends, co-workers, real estate agents and others who've recently closed a satisfactory escrow.

• Ask for a referral to the title or escrow officer, not the company. The officer should be familiar with the type of home you are selling, especially if it's a condo or other multiplex home, an older historic home or other special house.

• The escrow office should be conveniently located or able to tap branches near you. Saving time saves money, especially when you factor in the cost of gasoline.

• Consider a professional who is patient, exacting and willing to give you the time and information you need to understand escrow.

• Compare the costs of different escrow and title companies before agreeing to use one. Fees can and do vary widely. Ask for EACH AND EVERY escrow cost from title insurance and search and escrow service fees to all the little, so-called "garbage fees" that crop up in escrow.

• Be aware of and ask for discounts. Refinance-related discounts may be available when the loan being refinanced is relatively new, or only a few years old. Likewise, if you stick with the same lender and title and escrow service, discounts may be available.

• Be sure when you complete an application for a loan you get settlement costs and good faith estimate information. Federal law requires the lender or mortgage broker deliver these documents to you within three days of receiving the application. Costs on the good faith estimate and final settlement sheet are not only title insurance and escrow related fees, but a host of other costs for the mortgage, insurance and taxes among others.

• Remember, the good faith estimate is only an estimate. For example, the lender may not know the costs for a escrow agent or title company that you use, or the exact amount that will be collected for title insurance and other costs not levied by the lender.

• To avoid surprises, let the lender and settlement agent (escrow or title company) know that you will want to see the settlement statement one day in advance and that you won't be rushed on closing day. Under new federal regulations you can also get a final truth-in-lending disclosure three days before closing.

• Compare the good faith estimate with the settlement statement and, if necessary, contact the lender as well as the title/escrow company, to demand that they explain any differences. Ask the lender, title or escrow companies to waive any fees that were not listed in the good-faith estimate and they can't explain to your satisfaction. Get an acceptable explanation why it wasn't on the original statement.

• On closing day, come prepared with plenty of time, pencil, paper, a calculator, and an inquisitive, demanding mind. You are allowed to have your representative -- a real estate agent, mortgage counselor or other professional -- attend closing with you. If a real estate agent is involved in the deal he or she should accompany you. It's one of the services their commission provides. It's also their job to see that the deal closes in a satisfactory manner.

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

Also:
• See the historical archive, DeadlineNews.Com's Finance/Title Insurance Section
• See the investigative report, DeadlineNews.Com'sTitle Insurance Industry Under Investigation

• Click on the keywords below for more stories on this subject.

© 2008 DeadlineNews.Com

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Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

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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Part II: Title, escrow services under fire again

Dance-wedding video goes viral
Quickie divorce video follows

Part II of III: Title, escrow services necessary
Title and escrow services come into play during the "closing" period of real estate transactions. Lenders require title insurance to protect them against losses. Escrow services provide a neutral third party to manage the transaction.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - The $10 billion-a-year title insurance and escrow industry is under fire again -- if they were ever not under fire -- and one big cannon could unload on them 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.

Title and escrow services come into play during the "closing" period of real estate transactions when the two parties come together to seal the deal.

All the expenses associated with title and escrow costs from tiny recording fees to title insurance premiums can add up to thousands of dollars, and those fees can vary widely from one company to another.

Local custom dictates who -- the buyer or the seller -- pays for what, or the costs can be negotiable between the buyer and seller.

• Title companies are hired, in part, to issue title insurance protection for home buyers and lenders. Lenders require the service to protect them against loss resulting from claims by others against your new home.

The title company investigates the title to make sure it is clear of any encumbrances, such as liens or judgments, forgeries or fraud and any other title anomalies and then issues a policy to protect you from any claims that turn up later. Because title searches are conducted each time the home changes hands or, perhaps, during a refinancing, the searches rarely turn up title claims, but you have to pay for the search.

• Escrow services provide a neutral third party, through which is funneled the paperwork, money, transaction instructions and other details of a home purchase or mortgage refinance. The companies hold onto, and then exchange, disburse and transfer deeds, other documents and monies related to the transaction.

In some areas escrow attorney's provide the escrow service. In other areas, combined title and escrow companies do the work. In most cases title and escrow services are purchased as a package.

What many real estate consumers overlook is that they can also negotiate with the title and escrow companies and shop around for the best deal.

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'sTitle Insurance Industry Under Investigation

• Click on the keywords below for more stories on this subject.

© 2008 DeadlineNews.Com

---

Advertise on DeadlineNews.Com | Shop DeadlineNews.Com

Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

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

---

DeadlineNews.Com's Editorial Content Is Intellectual Property • Unauthorized Use Is A Federal Crime

Read more!

Part I: Title, escrow services under fire again

How to become a real journalist

Part I of III: What is it, this time?
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.

© 2008 DeadlineNews.Com

---

Advertise on DeadlineNews.Com | Shop DeadlineNews.Com

Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

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

---

DeadlineNews.Com's Editorial Content Is Intellectual Property • Unauthorized Use Is A Federal Crime

Read more!

Reducing Title And Escrow Fees

Title and escrow fees, amounting to thousands of dollars, are often considered compulsory as-is, but homework, haggling and comparison shopping can save cash.

by Broderick Perkins
© 2008 DeadlineNews.Com

Deadline Newsroom - When it comes to a home transaction, virtually everything is negotiable.

Haggle like a demon and quibble all the way, and don't forget to sweat the "small" stuff.

While you are dickering over the big picture -- the appraisal, comparative market analyses, concessions and repairs -- get tough on title and escrow costs too.

All the expenses associated with title and escrow costs from tiny recording fees to title insurance premiums can add up to thousands of dollars, and those fees can vary widely from one company to another.

In an even market, local custom dictates who pays for what, but when the market swings in favor of the buyer or the seller, dumping title and insurance costs on the other party is obviously the best way to go.

Title companies are hired, in part, to issue title insurance protection for home buyers and lenders. The company investigates the title to make sure it is clear of any encumbrances, such as liens or judgments; forgeries or fraud and any other title anomalies and then issues a policy to protect you from claims that turn up later. They rarely do, but you have to pay for the search.

Escrow services provide a neutral third party through which is funneled the paperwork, money, transaction instructions and other details of a home purchase or mortgage refinance. The companies hold onto, and then exchange, disburse and transfer deeds, other documents and monies related to the transaction.

In some areas escrow attorney's provide the escrow service, but in any event the two services, as title and escrow, are often purchased as a package.

The services come into play during the "closing" period of real estate transactions when the two parties come together to seal the deal.

Here are some tips to get the best title and escrow services for the best price.

• Educate yourself. The title industry's American Land Title Association, its state affiliates, the American Escrow Association and your state's regulatory offices for title and escrow services provide consumer information. If you seek more independent insight, consider Sandy Gadow's mother-of -all-title-and-escrow-books "The Complete Guide To Your Real Estate Closing" (McGraw Hill $19.95), a model guide to title, escrow and other closing issues. Gadow's consumer-friendly partner Web site EscrowHelp.com is likewise loaded with insight.

• Before hiring title or escrow services, obtain several referrals from those you trust, family, friends, co-workers, real estate agents and others who've recently closed a satisfactory escrow.

• Ask for a referral to the title or escrow officer, not the company. The officer should be familiar with the type of home you are selling, especially if it's a condo or other multiplex home, an older historic home or other special house.

• The escrow office should be conveniently located or able to tap branches near you. Saving time saves money, especially when you factor in the cost of gasoline.

• Consider a professional who is patient, exacting and willing to give you the time and information you need to understand escrow.

• Compare the costs of different escrow and title companies before agreeing to use one. Fees can and do vary widely. Ask for EACH AND EVERY escrow cost from title insurance and search and escrow service fees to all the little, so-called "garbage fees" that crop up in escrow.

• Be aware of and ask for discounts. Refinance-related discounts may be available when the loan being refinanced is relatively new, or only a few years old. Likewise, if you stick with the same lender and title and escrow service, discounts may be available.

• Be sure when you complete an application for a loan you get settlement costs and good faith estimate information. Federal law requires the lender or mortgage broker deliver these documents to you within three days of receiving the application. Costs on the good faith estimate and final settlement sheet are not only title insurance and escrow related fees, but a host of other costs for the mortgage, insurance and taxes among others.

• Remember, the good faith estimate is only an estimate. For example, the lender may not know the costs for a escrow agent or title company that you use, or the exact amount that will be collected for title insurance and other costs not levied by the lender.

• To avoid surprises, let the lender and settlement agent (escrow or title company) know that you will want to see the settlement statement one day in advance and that you won't be rushed on closing day.

• Compare the good faith estimate with the settlement statement and, if necessary, contact the lender as well as the title/escrow company, to demand that they explain any differences. Ask the lender, title or escrow companies to waive any fees that were not listed in the good-faith estimate and they can't explain to your satisfaction. Get an acceptable explanation why it wasn't on the original statement.

• On closing day, come prepared with plenty of time, pencil, paper, a calculator, and an inquisitive, demanding mind. You are allowed to have your representative -- a real estate agent, mortgage counselor or other professional -- attend closing with you. If a real estate agent is involved in the deal he or she should accompany you. It's one of the services their commission provides. It's also their job to see that the deal closes in a satisfactory manner.

© 2008 DeadlineNews.Com

Advertise on DeadlineNews.Com

Get news that really hits home for your Web site or blog from DeadlineNews.Com.
Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews.Com, a real estate news and consulting service, and the new Deadline Newsroom, DeadlineNews.Com's new backshop. In both cases, it's where all the news really hits home.

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