Is this fee charged for all title commitments or only when the closing is done at the title company? We do not close many of our commercial loans at the title company, so do we still have to pay this fee?
I'm no authority on this, as all I know comes from reading 215 ILCS 155/16 and 16.1. However, the law appears to apply only to closing where a local title agency acts as escrow closing agent on behalf of the title company that issues the commitment. It is important to distinguish between the title company and the title agency. The title company, for example, Chicago Title or First American issues a commitment, and it is that company that charges the fee and issues the CPL. The title agency, for example, Hometown Title Service or The New Title Agency on the Corner, is acting as agent for the Company, and there is all sorts of ways they can screw up the closing. The CPL protects the seller, buyer and bank against these errors, but limits the damages to the amount on deposit with the escrow agent for the closing.
The local agency cannot charge a fee, nor split the fee with the company. The fee comes from the company that actually will issue the policy.
If there is no escrow closing, then there should be no fee. But some banks call "closing" having the customer come in and sign, then they still send everything to the title company to record, and rely on an instruction letter to the agency, and the agency's assurances, before disbursing funds. I don't know about these "in between" situation.