Wednesday, April 18, 2007
( 11:38 AM ) Andy
Will Title Insurance Change?
The Government Accounting Office (GAO) recently reviewed the subject of title insurance on mortgage loans. They found that five insurers accounted for 92 percent of the market in 2005. Even so, because varying markets and state laws, oversight of title insurance on a national level will be a challenge.
The report noted that there are many factors that raise questions as to the consistency and reasonableness of title insurance cost:
Real estate agents, brokers and other mortgage professionals often have a stake in the title insurance companies. Because many of these people bring the title insurance provider and borrower together, conflicts can arise. Affiliated business arrangements within these stakeholders further complicate matters.
HUD has identified abuse in referrals and compensation for title insurance. But HUD and state insurance regulators have faced obstacles including limited resources, a lack of authority (even with RESPA), and some state's minimal oversight of title agents and affiliated businesses, to act on this abuse. Enforcement efforts are hindered because of these problems and a lack or coordination within states, between states and between states and HUD.
The GAO recommends in the report that HUD and state insurance regulators take actions to improve the consumer's ability to comparison shop for title insurance and to enhance the regulatory oversight of the title insurance market. They also indicate that Congress should consider RESPA revisions and enhancements to HUD's authority for enforcement.
The 74 page report is Title Insurance is available on the GAO website. #