Garry Wolff and Nick Wolff of myTitleins.com help consumers shop and compare title companies when buying or selling a homeIt's been 40 years since Congress passed RESPA, the act designed to protect consumers from being nickel-and-dimed in inflated service charges that result from too-cozy relationships between real estate brokers and title companies. A key protection of that act finally gets some teeth next year when the Consumer Financial Protection Bureau (CFPB) requires new real estate loan closing disclosure forms that define and encourage consumers to shop for their title and closing services.
Title policies offer virtually the same protection no matter where you buy them, but overall title rates and closing fees can vary $300 to $1,000 on an average sale - $1,500 and more on a luxury home. Even before the new forms are required, buyers and sellers need to be on their toes, says consumer protection advocate Garry Wolff, whose web site myTitleIns.com lets shoppers compare fees offered by Colorado title companies; much as you can compare airfares and hotel rates.
"These disclosure forms are going to create a paradigm shift as consumers are informed of their right to shop their title and closing services," Wolff adds. Meanwhile, brokers are often totally unaware that referring business to one title agent, without allowing the seller or buyer to shop the market, is a violation of RESPA. Wolff's web site also surveys consumers who've recently been involved in a purchase/sale, asking whether they were given an opportunity by their broker to shop (you can take that survey at myTitleIns.com/survey).
Not getting that opportunity is costly for consumers, Wolff says. Coloradans spent $3.8 billion on title insurance over the last ten years - with perhaps as much as $50 million per year lost to excesses that should be pocketed by sellers and buyers, he adds.
A Maryland real estate group is facing an investigation on $1.3 million in alleged kickbacks from a title company. Meanwhile, Wolff says many brokers refer a particular title company without concern for the consumer's best interests. "Title companies, brokers and lenders should all be helping to educate consumers of their responsibility to compare their title and closing services," Wolff adds.
Soon, says Wolff, the new disclosures will create a more level playing field where rates will be more competitive because of consumer awareness. In the meantime, myTitleIns.com allows consumers to compare fees of a dozen or so companies, based on the specifics and value of their coming transaction. The site also provides a consumer protection rating - weighing whether title companies carry protections to guard the consumer's money and transaction. Wolff lobbies the state legislature, as well as the Division of Insurance and the Colorado Division of Real Estate, to clarify consumer rights and to require better protections by title companies (one prominent Colorado case of misuse of consumer funds by a title company is in the headlines now).
Unlike many expenses involved in marketing your home that end up mortgaged over the life of the loan, title fees cost hard money at closing. Whether you're selling, buying or refinancing, Wolff suggests you shop myTitleIns.com.
WHERE: myTitleIns.com, free one-stop solution for shopping title insurance and closing cost services in Colorado. Web site includes a title insurance & closing cost calculator comparing different companies; detailed quotes by individual providers, plus educational information about title, closing costs & consumer protections.
TAKE A SURVEY: What were you told about title insurance?: myTitleIns.com/survey
Mark Samuelson writes on real estate and business; you can email him at email@example.com.You can see all of Mark Samuelson's columns at DenverPost.com/RealEstate. Follow Mark Samuelson on Twitter: @marksamuelson