PRLog (Press Release) –
Jan 04, 2008 – Philadelphia, PA -- A recent report from the Government Accountability Office (GAO) cites a need for education and penalties for conflicts of interest in the title insurance industry to better protect consumers. The report, to Committee on Financial Services, House of Representatives, (GAO-07-401), was the result of an investigation into title industry practices throughout the United States.
Consumers know very little about title insurance, as it relates to their real estate transactions. "Consumers find it difficult to comparison shop for title insurance because it is an unfamiliar and small part of a larger transaction that most consumers do not want to disrupt or delay for comparatively small potential savings.", states the report. A conflict of interest between a real estate agent and title agent can also be an issue. "In addition, because consumers generally do not pick their title agent or insurer, title agents do not market to them but to the real estate and mortgage professionals who generally make the decision. This can create conflicts of interest if those making the referrals have a financial interest in the agent."
What can a consumer do? Pamela A. Rader, President of Mobile Settlement Services, Inc., a title agent in Philadelphia advises consumers, "Education is absolutely the key. When your real estate agent mentions title insurance, don't automatically take insurance with the company he recommends. Ask for several options, then look into those companies. Check their websites, and ask your realtor what his affiliation to the company may be. Most of the title companies in Pennsylvania participate in the Pennsylvania Title Insurance Ratings Bureau, so the cost for policies will be the same at any of those companies. However, be sure to ask title companies about their fees, which can vary enough to save you a considerable amount of money.” Customer service is also a key ingredient, continues Rader, “You need a title company that will work with all of the parties involved in an efficient and professional manner, while maintaining contact with you as the settlement approaches. Some title companies will conduct your settlement at your office or home, but be sure to check if there are fees associated with that service. Ideally, you want to find a company you are both confident and comfortable with, so that the entire transaction runs smoothly.”
The GAO report also recommends that modifications to current laws be considered to allow monetary penalties for violators of conflict of interest laws. That will provide consumers some limited protection, but the real key is for consumers to educate themselves.
