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 <title>CAARE - Consumer Advocates in American Real Estate  blogs</title>
 <title>Buyer Agent Pledge. Will Your Agent Take It?</title>
 <description>&lt;div class=&quot;field field-name-body field-type-text-with-summary field-label-hidden&quot;&gt;&lt;div class=&quot;field-items&quot;&gt;&lt;div class=&quot;field-item even&quot; property=&quot;content:encoded&quot;&gt;&lt;p&gt;&lt;iframe width=&quot;560&quot; height=&quot;315&quot; src=&quot;https://www.youtube.com/embed/Hcg-URVOv_s?ecver=1&quot; frameborder=&quot;0&quot; allowfullscreen=&quot;&quot;&gt;&lt;/iframe&gt;&lt;/p&gt;
 <pubDate>Wed, 19 Jul 2017 01:10:40 +0000</pubDate>
 <guid isPermaLink="false">318 at https://www.caare.org</guid>
 <title>Builders Should Not Own Title Companies</title>
 <description>&lt;div class=&quot;field field-name-body field-type-text-with-summary field-label-hidden&quot;&gt;&lt;div class=&quot;field-items&quot;&gt;&lt;div class=&quot;field-item even&quot; property=&quot;content:encoded&quot;&gt;&lt;p&gt; &lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;Builders want to continue to force consumers to use their in-house title companies.   Allowing a builder to own a title company is little different than allowing a builder to determine if his own title is any good.  Builders recently pummeled HUD witha mountain of letters and a lawsuit to protect this anti-competitive, anti-consumer and manipulative arrangement.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;New construction closings are likely the most complex and risky transactions a consumer or lender will ever do.  The title issues are enormously complex, fraud abounds and the potential for coercion and bait and switch is huge.  And it is the title company that must sort through the complex purchase agreements to properly represent them on the settlement agreement.  It is the title company that must uncover title defects created by the builder, mechanics liens that the builder hasn&#039;t paid and handle situations where the buyer and builder disagree.  Of course builders want to own the title companies that make these decisions.  What better way to protect their investment.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;It doesn&#039;t take long to imagine a routine real life scenerio where a builder might abuse his ownership of a title company.  Here are a few:&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;ul&gt;&lt;li&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;Sub-contractors have filed mechanics liens on the property and the builder disputes them.&lt;/span&gt;&lt;/span&gt;&lt;/li&gt;
&lt;li&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;There is a blanket underlying mortgage on the entire development and the builder doesn&#039;t want to payoff the part due to release the subject property.&lt;/span&gt;&lt;/span&gt;&lt;/li&gt;
&lt;li&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;The builder is in financial difficulty and the title company is a perfect bank to &quot;borrow&quot; money.&lt;/span&gt;&lt;/span&gt;&lt;/li&gt;
&lt;/ul&gt;&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;Residential new construction is already a problem for consumers in that the purchase agreements are best described as contracts of adhesion and offer consumers no meaningful protection whatsoever.  The forms are typically custom forms in excess of 20 pages that would cost a fortune to even have an attorney review.  Consumers are already at a severe disadvantage.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;In addition, title companies are responsible to collect and disburse funds in an unbiased manner that follows the instructions in the purchase agreement.  Is there any possible way to call a builder&#039;s title company unbiased? &lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;And if the builder is trying to cover up title defects such as unpaid mechanics liens or unpaid mortgages, what better way to do that than by owning your own title company?&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;The other problem is that builders coerce buyers to use their biased title companies by offering fake discounts that exceed the price of the title work often by a factor of 5 or more.  Free rooms, $10,000 in discounts, free granite counter tops are all things that we have seen.  When the title fees are only $1200 or so, the so called &quot;incentive&quot; to use their title company becomes more of a demand than a choice.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;And if the builder is capturing all of the buyers&#039; title work that comes through the door, what does that do to competition?   Competing title companies that offer title work for less won&#039;t be considered because they would essentially have to pay the buyer $8,000 to match the benefit the consumer is getting from the builder.  The discount is nothing more than a stick to whack the buyer with if the buyer refuses to subject himself to the risky proposition of allowing the builder to examine his own title. &lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;Allowing builders to own a title company allows the builder to neutralize the safeguards that the title company is there to provide.  If you&#039;re going to allow that to happen, it is CAARE&#039;s position that you would be better off not even examining title at all.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
 <pubDate>Tue, 23 Jun 2009 02:52:37 +0000</pubDate>
 <guid isPermaLink="false">5 at https://www.caare.org</guid>
 <title>Appraiser&#039;s Code of Conduct Under Scrutiny</title>
 <description>&lt;div class=&quot;field field-name-body field-type-text-with-summary field-label-hidden&quot;&gt;&lt;div class=&quot;field-items&quot;&gt;&lt;div class=&quot;field-item even&quot; property=&quot;content:encoded&quot;&gt;&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;On July 28th, 2009 CAARE was briefly interviewed on public radio about the problems with the new Home Valuation Code of Conduct.  The purpose of the HVCC is to obtain sound appraisals free of influence and coercion from vendors and parties to the transaction.  The goals are accomplished by preventing interested parties from communicating directly with appraisers. &lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;CAARE supports the idea of an HVCC, but finds severe defects in the way this idea was implemented.  The end results of this first attempt at a good idea are higher prices and lower quality appraisals for consumers, lower pay for appraisers and the creation of an unregulated new profit center called Appraisal Management Companies (&quot;AMC&quot;).  We have solutions.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;We ask, &quot;Why stop with appraisals?&quot;  All the safeguard industries for which residential real estate depend are also routinely subjected to coercion, undue influence, bribery and self dealing.  An economic recovery is likely to stall if those other areas are not also addressed.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
&lt;p&gt;&lt;span style=&quot;font-size: medium;&quot;&gt;&lt;span style=&quot;font-family: Arial;&quot;&gt;It is time to remove all conflicts of interest from residential real estate.&lt;/span&gt;&lt;/span&gt;&lt;/p&gt;
 <pubDate>Wed, 17 Jun 2009 20:53:32 +0000</pubDate>
 <guid isPermaLink="false">6 at https://www.caare.org</guid>