Minnesota Department of Commerce Costs Homebuyers 63 Million Dollars.(first in a series on the Minnesota Department of Commerce)
- No legal authority exists or existed for the DOC or HUD to require seller’s fees to be disclosed as buyer’s fees.
- No governmental authority told MNAR that buyers now had to pay for seller’s fees. RESPA does not require buyers to pay seller’s fees.
- The Minnesota State Bar Association did not reach the same conclusion as the MN DOC or MNAR and they did not change their purchase agreement.
- The title insurance industry stood to gain all the money that this has cost homebuyers. Realtor firms own most title companies in the metro area.
- The purchase agreement change was likely first promoted by a title firm.
- MNAR Forms Committee was comprised mostly of competitors whose firms were affiliated with title companies. Title companies stood to benefit from this change.
- MNAR’s Forms Committee’s actions caused all the members’ title firms prices to increase.
- MNAR facilitated and was present at Forms Committee meetings that resulted in these industry-wide title company price increases.
- Because of this change, fewer homebuyers could afford homes and that hurt individual Realtors as well as homebuyers.
- MNAR used DOC approved licensing classes to tell its membership that RESPA required buyers to pay the seller’s title charges (click here to see relevant materials from one of those classes). We have materials from two classes taken about 9 months apart.
- MNAR told its membership (click here to see MNAR’s announcement – see the first line) that the new purchase agreement was the result of the MNAR Forms Committee working with people from the title association and the Minnesota Bar. No one had been authorized by either organization to pledge the support of their respective trade associations.
- There was no good reason for MNAR to change their purchase agreement and that change unfairly wiped out title insurance discounts for consumers.
- Title firms have profited from this change.
- The DOC was made aware of their mistake, they were made aware of the false information being disseminated by MNAR in DOC approved classes and failed to investigate.