Archive for title insurance


Consumer Reform in Title Insurance – Despite The Fight We’re Not Giving Up

0 Comments By Chris Meyers on October 25th, 2011
Tags: , , ,      Categories: Buying, Houlihan Lawrence News, title insurance

Reducing The High Cost of Title Insurance
In 2009, with the goal of reducing the unreasonably high cost of title insurance in New York, Houlihan Lawrence acquired a respected local title agency with an experienced operating team and branded the new company as Thoroughbred Title Services.

After extensive due diligence, Thoroughbred partnered with EnTitle Insurance Company, an underwriter that shared our commitment to helping consumers save on title insurance.

We knew this was a bold move in the staid world of title insurance. We did not know that we would be taking on an entrenched web of title industry participants determined to maintain a status quo that denies consumers the right to shop around for title services and ultimately, to choose an insurance company that provides the best value for their needs. The more progress we make, the more desperate the tactics have become. 

The Only Agency in The State Offering Reduced Rate
EnTitle made quite the splash in the New York title insurance industry in mid-2010 by filing a 10% reduced premium rate with the New York State Insurance Department. Thoroughbred Title Services is the only agency in the State currently offering this reduced rate. All other title companies in New York file their rates using a voluntary organization called TIRSA that ensures they will all have identical premiums. Some attorneys are under the mistaken impression that rates are set by statute and that title companies must charge the same rate. This is not the case. The other title companies choose to all file the same rate through TIRSA.  EnTitle’s 10% lower rates were filed separate from TIRSA and approved by the New York State Insurance Department for the benefit of consumers. Period. 

Misinformation Being Spread
Thoroughbred Title and its network of attorney agents, as exclusive New York agents of EnTitle, have been under constant attack since the 10% reduced rate was filed. Rather than try to compete on price by also filing a reduced premium rate, our competitors (who have been losing business to us) have orchestrated a smear campaign against Thoroughbred and EnTitle by calling into question EnTitle’s financial stability and spreading rumors about the legality or ethicality of our business model.  The fact that these comments have been made in violation of New York Insurance Law section 2604 which prohibits derogatory statements regarding the financial condition of an insurance company is mind boggling. The fact that some attorneys are also spreading these rumors is surprising and disappointing, to say the least.

These are just some examples of the misinformation and “dirty tricks” that have been making their way through the real estate, mortgage and title industries. We are not and will not be party to it, and we are definitely not going to back down because everything we’ve created is above board, honest and executed based on our belief that people pay too much for title insurance.

Here are the facts:

  • Thoroughbred Title Services and its network of attorney agents are fully compliant with all laws and regulations. A great deal of research was done to ensure that the attorney agent model was compliant under RESPA (Federal law), New York insurance laws and New York State Bar Association ethics rules before Thoroughbred Title was launched.
  •  EnTitle Insurance Company is rated A’ (Unsurpassed) by the leading rating agency of the title insurance industry. It has more assets today than at any time in its 33-year history and is enjoying record volume in this economy. In sum, EnTitle Insurance Company is over-capitalized relative to its outstanding risk and has superior management and Board of Directors (including a 12-year Insurance Commissioner).
  • Despite the anti-competitive tactics being used to dissuade consumers and attorneys from taking advantage of the potential savings, Thoroughbred Title Services customers have saved more than $500,000 in title insurance premiums since the new rates were approved. This program and the ensuing savings are not and have never been limited to Houlihan Lawrence clients. In fact, nearly half of Thoroughbred’s customers were represented by non-Houlihan Lawrence Realtors in their home purchase.

Given all that has occurred in real estate over the past few years, this represents a small ray of sunshine that we are proud to have created and remain committed to continuing on behalf of New York home buyers.

You Are Empowered To Choose
As a home buyer, you are empowered to choose your own title company. Exercise your right to choose. Don’t rely on what you hear from the traditional title companies or their representatives. Do your homework. Ask questions. 

Think of what you could do with a few hundred (or thousand) extra dollars. We did, and we’re glad we have.

Covenants, Restrictions and Agreements, Oh My!

0 Comments By Charles Brundage on September 28th, 2011
Tags: , , ,      Categories: Buying, title insurance

Covenants, Restrictions and Agreements
As Counsel for Thoroughbred Title Services I will concede that title reports are not exciting to read and if someone is not familiar with title, they can be quite confusing. One of the more confusing schedules or sections of a title report is the list of Covenants, Restrictions and Agreements. These are documents that affect the real property in some way and if they are properly drafted they can remain in effect in perpetuity, binding each new purchaser even though that purchaser was not the record owner when the agreement was executed. They can be confusing because they are legal documents that are not often written in plain English and many of them were executed a very long time ago.

Easement
The most common Covenant or restriction is an easement. An easement is an interest in the real property which usually allows some one to do something — i.e. an ingress/egress easement that allows someone to cross over your land to get to the nearest public road. A shared driveway is a type of easement. Another common easement in a title report is a utility easement — an agreement whereby the owner allows the utility company access to his or her property to run wires or pipes, etc. to provide the utility service. It may also allow the utility company to come onto the owner’s property for maintenance purposes. 

Restrictive covenants
Restrictive covenants are agreements that restrict what the owner can do with his or her property. These can control anything from what type of house may be built on the land to how far from the front, side or back property lines a structure may be built (commonly called setbacks – i.e. house must be set back 25 feet from street or 35 feet from adjoining property). Obviously these are important agreements and depending on what the purchaser wants to do with the property, they can be game changers.

Covenant and Restriction search
If you have a prospective purchaser that is planning to do major work on the property once they own it — a tear down and re-build or a significant expansion of the house – adding additional structures, etc., it is a very good idea for their attorney to order a Covenant and Restriction search (C & R search for short) to determine what agreements are recorded affecting the property. While it is a good idea for real estate agents to become familiar with these types of agreements, I would caution any client to review the documents with an experienced real estate lawyer.

Thoroughbred Title Offers Savings to Consumers

0 Comments By Charles Brundage on September 16th, 2011
Tags:      Categories: Buying, title insurance

Matt Kelley of Thoroughbred Title Services will be attending an open house this Sunday from 2:00 to 4:00pm at 2 Avon Road in Bronxville.  Matt will be there to educate consumers about the unique title savings available to buyers.  Thoroughbred Title Services provides title insurance to home purchasers at a 10% reduction in the title premium…combine this with our additional low cost title fee structure and buyers can expect a 11-26% savings.  Please visit our website for further details or a detailed price comparison at www.thoroughbredtitleservices.com

A Funny Thing Happened On My Way to Clearing a Title …

0 Comments By Charles Brundage on July 20th, 2011
Tags: ,      Categories: Buying, title insurance

At Thoroughbred Title Services we pride ourselves on providing the best customer service in the title insurance industry.  Sometimes this means being extra dilligent regarding title issues and other times it means helping clients or non-clients with non-title issues in order to get a transaction closed.  Recently I dealt with two scenarios that illustrate this point very well.

In the last two weeks we have been working on clearing a purchase transaction where a fairly unique issue arose.  Our title examiner was extra dilligent and provided us with a copy of a pending lawsuit that was not found in the Land Records section at the County Clerk’s Office.  The lawsuit was filed by a prior prospective purchaser of the property that had walked away from the property and was trying to get his contract deposit back.  Since he was no longer interested in buying the house, the prior purchaser did not file a Notice of Pendency (a legal device to put the world on notice that an action has been commenced that affects the real property).  This would have effectively tied up the property and forced the seller to return the deposit as no title company will allow a closing if there is a valid Notice of Pendency on the premises.

Some title companies do not search the pending lawsuit section of the County Clerk’s office and would not have found this action.  Our Examiner did and we raised it as an exception to title and we were able to work with the parties to the current purchase and our Underwriter to come to a resolution where we could allow the closing to be scheduled and the property to be insured.

Last week another good client of ours was representing a purchaser who was buying a home with a slightly leaky roof.  Obviously, a leaky roof (or anything else dealing with the condition of the house) has nothing to do with the title to the property and we are not usually involved with these types of issues.  In this case however, we assisted the purchaser’s attorney with resolving the issue.  The seller apparently had attempted to paint over the area on the roof rather than have the flashing properly repaired.  We participated in a conference call with all the parties and were able to help them settle on an amount of money to be held in escrow until the necessary reapairs were completed. 

The moral of this story is that we are all in a customer service business and “going the extra mile” can often distinguish your company from the competition.  We at Thoroughbred Title Services view every interaction with clients and potential clients as an opportunity to let our customer service abilities shine.

Now more than ever, Title Insurance is necessary

0 Comments By Charles Brundage on May 31st, 2011
Tags: ,      Categories: title insurance

The Fox Business Website recently posted an article titled ’3 Reasons Every Homeowner Needs Title Insurance’.  The article reinforces the idea that  now more than ever, title insurance is necessary.  When you have a down market or a market in turmoil with foreclosures and bank owned properties, there is inherently more risk of fraud, deception and just plain mistakes in the closing of real estate deals.  While the likelihood that you will ever file a title insurance claim (as opposed to an auto insurance claim for example) is remote, it is still essential that you purchase title insurance to protect your home and your investment. 

Click here for the full article that appeared on FoxBusiness.com.

The Value of Affiliated Title Agencies

0 Comments By Charles Brundage on May 4th, 2011
Tags: ,      Categories: Buying, title insurance

Consumer Benefits
Numerous industry studies show that consumers save money with affiliated title agencies and enjoy the many benefits of one stop shopping. The benefits to the consumer that uses an affiliated title agency include:

  • Greater convenience
  • Greater accountability
  • Greater speed due to technology
  • Greater competition and competitive costs

Convenience
The convenience of one stop shopping with an affiliated title agency is obvious. Purchasing a home (especially for the first time) is a complicated process with a lot of services and requirements that are thrust upon the buyers. If title insurance and other settlement services can be procured through the real estate agent (someone the buyers trust and feel comfortable with) this will save the buyer the hassle of shopping around and trying to make sense of a service they are no familiar with.

Greater Accountability
Affiliated title agencies provide greater accountability because they are owned or partially owned by the Brokerage. If an affiliated title agency does not provide competitive pricing and services that will reflect poorly on the agent and on the realtor and will in turn be harmful to future business. The Realtor© will not allow this. Affiliated title agencies also have the ability to communicate with the realtor-owner, the agent and other related companies through integrated technology platforms, which allows for speedier transactions.

Significantly Lower Costs
The most comprehensive economic study to date on the costs of affiliated title services vs. unaffiliated title services concluded that title premiums and title-related charges are not higher when an affiliated title agency handles the transaction. (The CapAnalysis Study – released in October 2006) In the case of Thoroughbred Title Services the costs are significantly lower. HUD has also recognized the benefits of affiliated title agencies: “Controlled business arrangements and so-called one stop shopping may offer consumers significant benefits including reducing time, complexity and costs associated with settlements.” (HUD’s July 1994 proposed Real Estate Settlement Procedures Act (RESPA) regulation governing affiliated business arrangements)

Better Overall Experience
Recent consumer surveys also have shown that consumers actually welcome the various benefits and convenience of affiliated settlement services. In a 2004 survey of over 3000 home buyers conducted by Weston Edwards & Associates found that 70% of the homebuyers were either highly likely or likely to use one-stop shopping for real estate purchases. An earlier survey by Harris Interactive found that 64% of home buyers who had recently used an affiliated settlement service had a much better overall experience, while 90% who did not use such services felt they would have had a better home purchase experience with less delays and more convenience.

Do I Need a New Survey for the Home I’m Purchasing?

0 Comments By Charles Brundage on March 23rd, 2011
Tags: , ,      Categories: Buying, Dutchess, Putnam, title insurance, Westchester

A consumer recently told me they had been advised by their attorney to purchase a new survey of the property they were buying, and asked whether it was really necessary. Here are my thoughts:

As the General Counsel for Thoroughbred Title Services, I always strongly advise purchasers of residential real property to obtain a new survey when they are buying their house. While it may just look like a picture of the house and the front and back yards, the survey is a picture that tells a very important story.

The survey shows you the structure you are buying and whether it has a deck, a pool, patio, garage, driveway, etc. In addition, the survey will disclose if there are any easements on the property — for example a neighbor may have a right-of-way over your property to the nearest public street or you may be sharing your driveway with others. The survey will also tell you if a neighbor’s fence or wall is encroaching on your property, if your property backs up to a designated wetlands area or a conservation easement. You will also be able to tell if the house you are buying violates existing setbacks per local zoning codes.

Since a survey contains so much valuable information, my advice is to always get a new survey that is guaranteed to you. Sure, you can save some money by using an existing survey that was prepared for a former owner of the property, but if a mistake was made on that survey you will have no recourse against the surveyor. By obtaining a new survey that is guaranteed to you, you have the benefit of having a contractual relationship with the surveyor and the ability to seek recourse against the surveyor if there is a problem later on that should have been disclosed on the survey.

Additional Title Protection

0 Comments By Charles Brundage on February 16th, 2011
Tags: , , , ,      Categories: Buying, Dutchess, Market Area, Putnam, title insurance, Westchester

thoroughbred title Additional Title ProtectionWith the residential real estate market in it’s current state, now is a good time to take another look at both the Market Value Rider and the Extended Protection Owner’s Policy. Both offer benefits to the purchaser of a 1-4 family residential property and are available through Thoroughbred Title Services.

Market Value Rider
Simply stated, the Market Value Rider offers the purchaser the opportunity to enhance their title coverage. If there is ever a claim on their title the purchaser is covered up to the fair market value of the property at the time the claim is made. A standard title policy only covers purchaser up to the amount they paid at closing. Obviously, as prices have come down there is a chance that this could come into play. The Market Value Rider is available for a one-time charge (10 % of the Owner’s Title Insurance Premium) payable at closing (there are no yearly premiums or renewals). On an $850,000 purchase the Market Value Rider would cost $299.

Extended Protection Policy
The Extended Protection Owner’s Policy is available for a 20% increase over the standard Owner’s Policy premium. This policy actually covers purchaser for certain acts of fraud that occur post-closing. Standard title policies only cover the purchaser for things that occurred prior to closing or at the closing itself. The Extended Protection Owner’s Policy also has a built in partial Market Value Rider, which gives the owner enhanced coverage for the first five years of ownership (when most claims occur). Also, it covers some issues that can arise at the Building Department that standard title policies do not insure.

Here are some of the highlights and conditions of each of these products:

Market Value Rider

  • Covers purchaser for full market value (minus any improvements made after purchase) at time of loss
  • Available for a 1-4 family home used predominantly for residential purposes
  • Purchaser must be a natural person and must reside at the premises
  • Available for Condos and Co-op Units
  • Cost is 10% of the Fee Policy Premium

Extended Protection Policy

  • Has “built in” partial market value rider: coverage automatically increases 10% a year for 5 years.
  • Protects against fraud or forgery that occurs after the date of closing. Title Company would cover cost of setting aside fraudulent deed or mortgage
  • Covers violations of zoning and local building laws that result in a forced removal of a structure, including decks, garages, extensions, etc.
  • Guarantees vehicular access to and from the premises (standard policy only guarantees pedestrian access)
  • Premium is 20% higher than standard Owner’s Policy

Do I Need Title Insurance?

0 Comments By Elizabeth Nunan on January 20th, 2011
Tags: ,      Categories: Buying, Dutchess, Putnam, title insurance, Westchester

Our home buyers ask us this question frequently: “I’m buying a house with all cash, do I still need title insurance?” To find the answer, I decided to ask a title professional. I reached out to Charles Brundage, Esq., General Counsel of Thoroughbred Title Services, an affiliate of Houlihan Lawrence, and this is what he told me:

The purchase of a home is usually the largest purchase one will make. If you take out a purchase money mortgage to finance the transaction the lender will require you to pay for title insurance to protect their interest in the property. If you are lucky enough to be able to purchase without financing you still should avail yourself of the opportunity to protect your investment by purchasing title insurance.

Title insurance is unique in that unlike other forms of insurance, it protects you against acts that have already occurred, rather than things that may happen in the future. For example, if you find out after your closing that the previous owner did not pay real estate taxes and the taxes are now a lien on your property, you would be covered by your Owners Title Insurance Policy. Since the previous owner’s delinquent taxes should have been disclosed to all parties involved in the transaction and were not, you would have a claim under your title policy. If you chose not to get title insurance you would be responsible for the back taxes and you would have to try to go after the prior owner to collect (good luck).

Also, unlike other types of insurance, you only have to pay the title insurance premium once — at your closing. You will not get renewal notices or bills in the mail post closing; you are covered for as long as you own your home. Banks will not close real estate transactions without getting title insurance because they do not wish to assume the risk that something may turn up that impairs their interest in the property. You should not assume this risk either. Everyone involved in a real estate deal is capable of making a mistake that could come back to haunt you as the purchaser. Why not let the title company worry about it and handle it in the event something does turn up?

Closing Costs for New York State

0 Comments By Gay Prizio on August 30th, 2010
Tags: , ,      Categories: Buying, Dutchess, Market Area, Putnam, title insurance, Westchester

 The Wall Street Journal recently reported that New York state has among the highest closing costs in the country. Real Estate Settlement Procedures Act (RESPA) calls for the Good Faith Estimate of closing costs to be accurate and avoid higher, unanticipated costs at closing.

This is good news for the buyer. 

Thoroughbred Title Services, LLC, and affiliate of Houlihan Lawrence, recently announced more good news for the home buyer. Namely that Thoroughbred’s title insurance rates are 10% lower than the industry standard. 

Title insurance is a one-time purchase at closing that protects new home buyers from financial loss on a property that might occur as a result of previous faults on a deed such as liens, clerical errors, misrepresentation, etc.  Typically, a buyer’s real estate attorney arranges for title insurance and uses vendors with whom they have a long-standing relationship. Premiums are calculated based on the purchase price and mortgage amount of the home and rates are comparable regardless of insurer, meaning the homebuyer does not have the ability to shop for competitive rates. 

Homebuyers typically glaze over the cost of title insurance. But they are starting to pay attention now that there is the opportunity to save money. For example, a person buying an $800,000 home with a $600,000 mortgage would be charged a total of $4,291 for title insurance and related research services by Thoroughbred Title, about $1,000 below the typical cost from competitors.   

Houlihan Lawrence is proud to be affiliated with a company that pro-actively offers our clients a cost savings without a compromise in quality or coverage.  It aligns with Houlihan Lawrence’s mission to make the real estate process transparent, simple and embedded with value in every facet of the home buying experience.