Basically, what it is telling you is that people just don't shop around for title insurance and escrow service because they don't know it is their right to do so. Notice the guy says "the commission of the title insurance specialist is %80"
Unbelievable. Maybe I am missing something, maybe some states require you to buy the title and escrow with mortgage altogether. I am not sure.
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Can't speak for other states, but in NY, the amount of the title insurance premium does not vary between insurers, as it is regulated. The cost of searches and other items can vary slightly, but usually not by much. I would imagine that in 'escrow' states, such as California, there would be more reason to shop between companies.
I am in MO. When I bought some land I had 2 title insurance companies bidding back and forth. One of them finally got mad and refused to give me insurance. It saved me several hundred dollars however.
It depends on the state the you are purchasing in. Some states do allow the Title Insurers to set their own premiums. Most states set the premiums for the state. Yes, the title companies do make a large "commission" as you call it. Typically 50-70% of the premium depending on the title policy and restrictions on the policy. As I see it, its their fee to find the insurance underwriters business and that is no different than any other sales agent in any other industry. Do you really think a title company can survive on the $250 escrow fee that they charge to each buyer and seller in each transaction?
It does depend very much on your state. I stumbled across a great site for Colorado borrowers, http://www.mytitleins.com/. I knew I could shop around for a refi (for purchases, the seller traditionally pays for & chooses the title company), but it was a real hassle finding "retail" service providers and comparing them. I hope it takes off & spreads to other states.
I just tried doing this exact thing in MA and here is what happened. I looked up some quotes online, like this place entitle direct...and used that number to see where my lawyer as well as my mortgage broker would land. My mortgage guy was able to match the best online quote I could find, so I stopped there. I will say it was also hard finding comparison numbers. I think it is also messed up that title insurance seems to cost more the more money you put down on the home. I wish I understood that.
All in all I find it to be a rigged game that you are forced into playing, but I would love to hear others experiences.... especially if you have actually HAD to use it or wish you had it.
Message edited by: happywakko on 2008-12-26 22:16:37 CST
My name is Fred Kauber; I'm the CIO of Entitle Direct. We are pleased that our site is of use and interest to this community, and since the topic has been raised would like to elaborate a little further on our service. As was alluded to in the first post in this thread, our goal is to educate consumers that they do have a choice when it comes to title insurance, and we seek to reward them with a discount of up to 35% or more when they elect to exercise that choice with us. As interest rates continue to drop, mortgage re-financing is becoming an increasingly attractive cost saving option which can be magnified with savings on title insurance.
In addition to offering cost savings, we wish to make the entire closing process more efficient; to this end, we offer an exclusive online Control Panel, which is a utility that the consumer can use to organize and review important closing documents in advance of the closing. An all too frequent experience at many traditional closings is that the consumer is expected to sign documents that they are seeing for the very first time, and that is clearly a situation which can and should be avoided.
As has been noted in several posts in this thread, title insurance rates and practices do vary from state to state, and we provide dedicated Closing Specialists who can advise consumers of the details specific to their state and who can also provide personalized service to manage the entire closing process. I would encourage anyone that has specific questions about how to maximize their title insurance savings or better manage their own closing to contact one of our Closing Specialists; our URL has been posted elsewhere in this thread, and our toll free number can be found on our website.
Title insurance costs several times as much in regulated states as it does in unregulated states. In regulated states, title companies are large contributors to politicians. Don't look for those states to deregulate any time soon. Their state legislatures are bought and paid for by excessive title insurance fees charges.
This is often the case with regulated rates, such as used to be the case with freight and air fares - competition brought the prices down dramatically.
Message edited by: Xnarg on 2008-12-27 17:12:09 CST
Xnarg said:Title insurance costs several times as much in regulated states as it does in unregulated states. In regulated states, title companies are large contributors to politicians. Don't look for those states to deregulate any time soon. Their state legislatures are bought and paid for by excessive title insurance fees charges.
This is often the case with regulated rates, such as used to be the case with freight and air fares - competition brought the prices down dramatically.Isn't it true that even in unregulated states, the underwriting profits in title insurance business is nothing less than astronomical? It seems that rather than competition, the industry is dominated by collusion and price fixings. Obviously to continue to enjoy the ability to over-charge consumers, the companies have politicians in their pockets. This is nothing different from the "military industrial complex".
I remember Radian, a PMI provider, had promoted a title insurance produce for refi which was priced at a fraction of a title policy. But in California the title companies successfully lobbied the commissioner to ban it from that state (which probably resulted in the product's complete failure).
In Pennsylvania, title insurance rates are fixed. Every company charges the same amount. Rates are set much higher than they would be if competition were allowed. When I bought title insurance in PA, I selected the title insurance company based on their financial/credit rating by AM Best.
FYI, from Entitle Direct's website: "at the present time we are offering services only in Alabama, Arizona, Arkansas, California, Delaware, Florida, Illinois, Kansas, Louisiana, Massachusetts, Maryland, Mississippi, Missouri, New Mexico, Nevada, Ohio, Pennsylvania, South Carolina, South Dakota, Utah and Virginia."
My state is not included, but I gave them an email address to notify me if/when that changes. It sounds like a great service to me.
I did the online price quote from Entitle Direct and compared it to my actual closing from one month ago:
Your Title Insurance quote from ENTITLE DIRECT $449.76 Title Insurance quote from major competitors: $990.75 You save $540.99
My actual cost at closing was $767.40 so my actual savings would be $317.64, not as much as they claim but still quite nice.
I'd like to know how this is possible since I'm in one of the states with regulated title insurance fees - I didn't think there was any flexibility in pricing. Fred Kauber can you comment on that?
I am wondering if regulated fees are just maximum fees. The optimum strategy for a provider is to set the fees at the maximum if he is reasonably certain all his competition will do exactly the same.
nycll said:...Isn't it true that even in unregulated states, the underwriting profits in title insurance business is nothing less than astronomical? It seems that rather than competition, the industry is dominated by collusion and price fixings. Obviously to continue to enjoy the ability to over-charge consumers, the companies have politicians in their pockets. This is nothing different from the "military industrial complex".
I remember Radian, a PMI provider, had promoted a title insurance produce for refi which was priced at a fraction of a title policy. But in California the title companies successfully lobbied the commissioner to ban it from that state (which probably resulted in the product's complete failure).CA is a regulated state, hence the much higher rates and lack of competition.
Title insurers about break even in unregulated states (due to competition) and make their profit in regulated states.
The regulated fees are not maximums, those are the fees that are set by the state insurance commission and must be charged. Example: Pennsylvania.
Message edited by: Xnarg on 2009-01-05 16:54:28 CST
winter said:I did the online price quote from Entitle Direct and compared it to my actual closing from one month ago:
Your Title Insurance quote from ENTITLE DIRECT $449.76 Title Insurance quote from major competitors: $990.75 You save $540.99
My actual cost at closing was $767.40 so my actual savings would be $317.64, not as much as they claim but still quite nice.
I'd like to know how this is possible since I'm in one of the states with regulated title insurance fees - I didn't think there was any flexibility in pricing. Fred Kauber can you comment on that?
In response to Winter's request above, I'll briefly address the issue of state regulated title insurance fees, as there is reason for confusion. There are only 3 states where title insurance rates are formally set via regulation - New Mexico, Texas, and Florida (and discounts are permissible under some circumstances in Florida); in addition, Iowa is the only state in the US where conventional title insurance is not allowed, and is instead provided by the state (for a fee) as part of a title guarantee program.
In the majority of the remaining states, title companies must file their rates and be licensed with the state; the state can reject the filing, but the state does not itself dictate the fees. In some cases, the title companies in a given state may form a quasi-private entity licensed by the state called a Rating Bureau to provide recommendations regarding title insurance rates in that state and to establish the rates for its member companies. It is important to note that membership in a rating bureau is voluntary; therefore, the existence of a rating bureau in a state does not prevent independent title insurance companies like Entitle Direct that are not members of the rating bureau from filing their own rates for the state's consideration and subsequent approval/rejection. In most states, therefore, the term 'regulated' describes the fact that the government provides oversight and has the right of rejection over rating bureau and independent title insurance company rates; these states do not mandate specific rates, and the rates established by rating bureaus for their member title insurance companies in these states are not binding over non-member title insurance companies like Entitle Direct, setting the stage for competition.
In regard to the specific quote that Winter received, it is difficult for me to comment on the specifics as I do not have all of the information, such as the state in question, the nature of the transaction (ie. re-finance or a purchase), etc. However, one common cause for differences in quotes from different title insurance companies is that different types of policies are the subject of the quote. For example, is the quote for a lender's policy (protects the lender up to the amount of the outstanding balance of the mortgage if a title claim is made) or owner's policy (provides the purchaser coverage up to the purchase price of the property), or both? In the case of owner's policies, is it a basic owner's policy which has fewer coverages, or an enhanced policy which covers items such as post policy forgery and identity theft, building permit violations of previous owners, violations of restrictive covenants, inability to access the property, and zoning law violations? It is very common for some carriers to quote solely on basic title insurance policies, which would tend to be cheaper; the quotes currently offered by Entitle Direct are for enhanced policies and we use that as the basis of our quote comparison with competitors. Additional detail on these policy types can be found at http://www.entitledirect.com.
Due to the variety of state and policy type considerations that may have affected the comparison with our quote, my recommendation would be to discuss the specifics of the situation with one of our expert closing specialists at 1-877-9-ENTITLE (1-877-936-8485) so they can provide personalized feedback and advice.
Xnarg said:nycll said:...Isn't it true that even in unregulated states, the underwriting profits in title insurance business is nothing less than astronomical? It seems that rather than competition, the industry is dominated by collusion and price fixings. Obviously to continue to enjoy the ability to over-charge consumers, the companies have politicians in their pockets. This is nothing different from the "military industrial complex".
I remember Radian, a PMI provider, had promoted a title insurance produce for refi which was priced at a fraction of a title policy. But in California the title companies successfully lobbied the commissioner to ban it from that state (which probably resulted in the product's complete failure).CA is a regulated state, hence the much higher rates and lack of competition.
Title insurers about break even in unregulated states (due to competition) and make their profit in regulated states.
The regulated fees are not maximums, those are the fees that are set by the state insurance commission and must be charged. Example: Pennsylvania.
Based on my commentary in my previous post, it is important to interpret and use the term 'regulated state' carefully; title insurance companies in both California and Pennsylvania have established rating bureaus whose rates have been approved by these states, but the states did not dictate the fees. For example, in both of these states, Entitle Direct has filed its own rates which have also been approved by the state with the intention of providing more cost-effective title insurance coverage to consumers in these states.
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