I am using the same title company. I am not sure it is reduced by a full 40%, but I'll look into that. Thanks!
So is it true that Texas mandates the lender's title insurance rates per loan amount (or purchase price?)? I've seen that mentioned in some forums since I posted my question.
for better or worse, i work for a title company. A lot of the statements made here are true, while some are not. When issuing lender's policy the title company is required to provide the lender with the coverage they request and the endorsements they request. Take ALTA 8.1 endorsement. Even if the lender requests a short form title policy, 99% of them still request 8.1 endorsement. It is not up to the title company to negotiate that coverage. It is up to the borrower, with the lender. THe title company is simply required to provide that which the lender requests. And bill the borrower.... does seem unfair, i know.. the lender's title policy protects the lender from loss associated with failure of title and, most importantly, lien position. What many homeowners do not realize, is that things like child support, spousal support, abstracts of judgements, Home Equity Line of Credits, IRS liens, state tax liens, city refuse liens, etc., are all posted in public records and all affect title to the property. At least in my state, a personal lien attaches to the property. the priority of a lien is determined by the recording date (with a few exceptions). FOr this reason a title policy is required by all institutional lenders - they want to make sure that in the event they have to foreclose on the home, they will get clear title to the property.
In some states, like my state, title and escrow rates for residential properties are filed with the departemnt of insurance and are not subject to negotiation. They do vary, however, from title company to title company. It is very important to compare apples to apples, however. For example, one company may charge a 500 escrow fee and a 600 title premium, while another would charge a 300 escrow fee and an 800 title premium, and a third one would charge a 700 escrow fee and a 300 title premium. Well, it is the last one that is actually the cheapest to use.
I work for a title company and I always buy title insurance. not because i am a homer. Because i have seen the claims. i have seen how much my company pays on title claims - it is astounding. It is certainly better to have the title company defend your title than you having to hire your own attorney and try to defend it.
Keep in mind that title insurance is very different from just about every other kind of insurance. most other insurance covers you from a future event - accident, fire, sickness, death, etc. Title insurance covers you against the events of the past. (and a very small number of future events, for more information go to ALTA website and read the policy jacket under covered risks). Whereas it is true that the title company discloses the conditions of their issuance of title policy on their report, it is also true that such a report is virtually useless without title insurance - a title report is nothing more than an offer to issue title insurance and offers no protections or guarantees without it. So if something was missed on the report and you didn't get title insurance no title company will stand by that report. ONce the policy is issued, however, they will.
Finally - in some states (like California) where most of the title and escrow work is done by underwritten title companies, you can not separate title and escrow unless extenuating circumstnce exists. For example, Fidelity was hired to handle a purchase transaction, but for whatever the reason only first american can issue a policy on that particular development (there is a number of reasons for that which i will not discuss here). In most other cases, title and escrow will have to be done by the same company and if a customer refuses to purchase title insurance from them, the title company will most likely resign from the transaction. No title company in California will work with above mentioned entitle direct.
soloma said: When issuing lender's policy the title company is required to provide the lender with the coverage they request and the endorsements they request.Sure, but what does it have to do with this thread? The point here is that in a lot of cases people can save a lot of money by pointing out to the lenders that they can accept short form versions of the loan policies, which in residential transactions provide them with the same protection but will often be much cheaper.
Take ALTA 8.1 endorsement. Even if the lender requests a short form title policy, 99% of them still request 8.1 endorsement.Sure, and in quite a few states the Environmental Protection Endorsement (ALTA 8.1) is automatically incorporated into the short form policy.
Whereas it is true that the title company discloses the conditions of their issuance of title policy on their report, it is also true that such a report is virtually useless without title insurance - a title report is nothing more than an offer to issue title insurance and offers no protections or guarantees without it. So if something was missed on the report and you didn't get title insurance no title company will stand by that report.That's incorrect. A title commitment is an offer to issue title insurance. A title update or a title opinion is not. Further, to the extent that you obtain a title update/title opinion that is certified to you, as a client, do not purchase title insurance and subsequently discover that the issuer was negligent in issuing it, subject to state law you can have recourse. In other words, insofar as your recourse is concerned, there is a big difference between a title examiner missing a properly recorded lien vs. a title report not showing a lien because it has not yet shown up as an encumbrance. These situations are all extremely state law and fact specific, however.
Let's not fight. there are various products available from title companies. Many states do not issue title commitments (like mine) - we issue preliminary reports. A preliminary report serves the same purpose as commitment. So in fact, my previous post is absolutely correct.
What you are referring to are alternate products offered by title companies, such as lien guarantees or parcel guarantees. These products are prepaid by the customer (unlike the preliminary report, in most cases) and therefore is in fact a guarantee and the customer would have a recourse, subject to the guarantee maximum (in my state, it is $1,000)
Keep in mind that title companies do not automatically issue these reports when a person is purchasing or refinancing a property. these need to be specially ordered and in most cases prepaid.
soloma said: Many states do not issue title commitments (like mine) - we issue preliminary reports. A preliminary report serves the same purpose as commitment. So in fact, my previous post is absolutely correct.No, the issue here is that in your prior post you said that a title report is merely an offer to purchase title insurance and is virtually useless if insurance is not purchased. That's incorrect or, at the very least, is often incorrect. As I explained in my reply, there are circumstances under which a person may be able to obtain recourse even if a title policy is not actually purchased.
What you are referring to are alternate products offered by title companies, such as lien guarantees or parcel guarantees. These products are prepaid by the customer (unlike the preliminary report, in most cases) and therefore is in fact a guarantee and the customer would have a recourse, subject to the guarantee maximum (in my state, it is $1,000)While in some states this will be the only option, in most other states that I've ever come across you can ask for simple title checkdown/title update/title opinion (there are a lot of different terms used in different states), which is essentially a report that tells you the current state of real estate title. While in many cases the title agent/title insurance company will proceed to disclaim liability for any errors contained in those reports, in quite a few cases those liability waivers are either absent or are otherwise not enforceable, which gives the person ordering these potential recourse if they were produced negligently, etc...
Regardless, this doesn't really have anything to do with this thread. The point of the thread is actually very simple. Namely, in a lot of cases people can save a lot of money by pointing out to the lenders that they can accept short form versions of the loan policies, which in residential transactions provide them with the same protection but will often be much cheaper.
Keep in mind that title companies do not automatically issue these reports when a person is purchasing or refinancing a property. these need to be specially ordered and in most cases prepaid.That's correct.
anyone knows best place in NJ to buy title insurance?
thanks..
halcut007 said: halcut007 said: I am in process of buying a house in New Jersey. I have heard good things about Entitle Direct but its not available in NJ. Could someone please recommend a good cheap title service provider for NJ? Also do I even need to shop for Title insurance in NJ if its regulated? Apologies in advance if this is a stupid question to ask.
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