A Colorado title insurance shopping guide and marketing company has started a petition to try and change current business practices within the title insurance industry after saying its previous attempts to rally title companies, regulators and other real estate professionals failed.
MyTitleIns.com, founded by industry veteran Garry Wolff, is a website that encourages consumers to shop for their title services, and it lists and markets a consumer protection rating for subscribing title companies in order to provide consumers with an idea of which companies might best protect the transaction. The consumer protection rating takes into account title policy coverages, available closing protections and their estimated cost.
The petition was started to empower consumers to take a more active role in their involvement in the title industry and encourage the industry to perhaps raise current standards.
“I’m asking you to read and sign the following online petition that will help change the current marketing and business practices of the title industry, which at this time fails to provide much, if any, education and marketing directly to consumers, where it is now needed,” stated an email sent from Wolff. “This petition addresses in detail the many specific and surprising facts of the title industry, which are currently unknown to most consumers. Consumers need more education and assistance about shopping, comparing and selecting the right title company that can protect their money and safeguard their real estate transaction.”
The email noted that MyTitleIns.com has “repeatedly reached out to the title insurance industry, regulators, legislators and other related real estate professions in an effort to provide more education and information to consumers, with little or no success.”
Here are some of the industry and protection issues listed on the petition:
- Colorado licensed real estate brokers, mortgage loan originators and bankers have no legal duty to shop and compare title insurance and closing settlement services and costs for their clients.
- It’s the consumer’s responsibility to shop and compare title insurance and closing settlement services and costs.
- Most title companies primarily market their services to real estate brokers, mortgage loan originators and bankers, not to the consumer.
- Colorado licensed title companies handled over $45 billion dollars of consumers’ money in 2010 for their real estate transactions and are not required by law to have any form of business insurance (i.e., fidelity, crime, and errors and omissions insurances) to protect the consumer’s money and safeguard their real estate transaction.
- Title insurance and closing settlement costs can vary substantially among title companies, from a few hundred dollars to thousands of dollars, even though they are regulated by the Colorado Division of Insurance.
- Title companies, upon request, will issue at no cost a “Closing Protection Letter” to lenders that provides them additional assurances and protections. However title companies do not offer or promote to consumers the availability of a similar “Closing Protection Letter” for their protection.
- The U.S. Government Accountability Office issued a report in early 2007 titled “Actions Needed to Improve Oversight of the Title Industry and Better Protect Consumers” recommending the need for consumers to have the ability to comparison shop for title insurance services.
- The Land Title Association of Colorado adopted the "Principles of Fair Conduct," in late 2007 that encourages member title companies to provide consumers with timely and comprehensive information and prices to enable consumers to shop among providers of title-related services.
Raising standards and improving transparency might be big issues for the industry this year. The American Land Title Association (ALTA) made this a theme for 2012 at its annual conference in October, so it will be interesting to see what traction, if any, this petition has among consumers and within the industry.
For further reading on ALTA’s transparency platform:
Q&A with newest president of ALTA Chris Abbinante
The mood at ALTA annual — a study in emotions
Experts discuss industry transparency, liability concerns