The National Association of Independent Land Title Agents (NAILTA) has just released a consumer survey that sheds light on what is important to consumers in selecting a title company. This survey Executive Summary2013 is extremely important because it is the first of its kind to ask important questions that are designed to provide accurate results. Prior industry-sponsored surveys have misled consumers and Congressmen about the dangers of affiliating these safeguard services (like title firms that provide title insurance and closing services) with industries dependent upon the transaction closing in order to get paid. “One Stop Shopping” is the real estate industry’s term employed to disguise these conflictive and dangerous arrangements. “One Stop Shopping” does not even accurately describe a benefit that a consumer will receive. Instead, the term describes the real estate firm’s financial benefit that comes with being able to capture their clients’ title business, control the outcome of the title examination and overcharge for those services. Current laws and regulatory efforts continue to support bad real estate practices that could easily have played a role in the mortgage foreclosure crisis.
What CAARE likes about this survey is that it was done by an organization whose membership is comprised of title firms that choose to avoid the conflicts of interests (and profits) that come with “one-stop shopping.” We hope that this survey leads to more research into the role these arrangements played in the financial crisis, the elimination of laws that legalize these types of inappropriate relationships and a better education among consumers, lenders and other industry participants as to the dangers this business model presents to the financial integrity of real estate transactions.
Some important findings:
- 93% of respondents said it was important that their title agent be a neutral third party in determining and disclosing what matters may affect their land title, including adverse liens or other interests that may restrict their use and enjoyment of their property.
- Over 62% of respondents said that title insurance agency could not remain objective, as it pertains to title insurance matters if they shared ownership with a referral source.