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Started By
Message
re: Real estate attorneys: is title insurance needed?
Posted on 1/17/14 at 10:01 am to LSURussian
Posted on 1/17/14 at 10:01 am to LSURussian
It's needed. A potential claim against the closing attorney isn't actionable forever.
1
Posted on 1/17/14 at 10:02 am to LSURussian
Good questions and info all around. 
This thread.
This thread.Posted on 1/17/14 at 10:04 am to LSURussian
and because it is likely that your mortgage lender will require it.
Posted on 1/17/14 at 10:04 am to OTIS2
quote:I understand that. Thanks.
A potential claim against the closing attorney isn't actionable forever.
What is an example of a "potential claim" that I would have to worry about "forever"?
Posted on 1/17/14 at 10:04 am to LSUnowhas2
quote:Read the thread. There is no mortgage; therefore, no mortgage lender.
LSUnowhas2
Posted on 1/17/14 at 10:05 am to LSUnowhas2
quote:If there was a mortgage lender, I'd perfectly understand that. Thanks.
and because it is likely that your mortgage lender will require it.
Posted on 1/17/14 at 10:12 am to LSURussian
quote:See rmc's post above for a few examples.
What is an example of a "potential claim" that I would have to worry about "forever"?
Posted on 1/17/14 at 11:41 am to OTIS2
quote:Okay, thanks. I was hoping you had some other examples. His examples are such a remote possibility with the property involved that it's not even the slightest worry on my part.
See rmc's post above for a few examples.
Besides, I feel like most issues would arise within the 3 years I can go back against the title attorney.
I am concluding more and more that the whole concept of title insurance is a scam on consumers who don't understand what it's for. The buyer has to have the title insurance when they have their mortgage lender requiring it as a condition of getting the mortgage
But when you see that 75%+ of the cost of the insurance goes to the title attorney selling it as his commission for selling it, it really makes their entire profession look sleazy, IMO.
Posted on 1/17/14 at 11:47 am to LSURussian
Well then, run nekkid and may God and good fortune be with you! Sometimes you pay a little for peace and security on the front end, and sometimes you pay a price on the back end. Best of luck to you.
Posted on 1/17/14 at 11:50 am to OTIS2
I just remembered a saying from the great Warren Mengis (awesome man). He said, in effect, that everyday a title attorney wakes up, he should be pleased that prescription had run on another potential title insurance claim. 
This post was edited on 1/17/14 at 11:55 am
Posted on 1/17/14 at 12:00 pm to LSURussian
The Realtors were freaking out because I said I would not close with it in the settlement statement. One of them even told me they would loan me the money if I needed it! We were buying a house in a subdivision in BR with another 168 houses. I called my attorney in the middle of the closing and he said in his opinion it was a waste of money. The subdivision was about 10-15 years old at the time. I just thought it was b.s. also. After they saw I wasn't budging on it, he took it out and we closed.
Posted on 1/17/14 at 12:06 pm to TigerAlum1982
quote:
One of them even told me they would loan me the money if I needed it!
Realtors
Posted on 1/17/14 at 12:30 pm to OTIS2
quote:Thank you. You, too.
Best of luck to you.
I'm just curious, are you an attorney?
Posted on 1/17/14 at 12:35 pm to TigerAlum1982
quote:Which leads me to another issue: Do some realtors have agreements with closing attorneys for some under the table money for referring their buyers to those attorneys? Nothing in writing, of course, just a friendly, wink-wink, type of arrangement.
The Realtors were freaking out because I said I would not close with it in the settlement statement.
Full disclosure: I have ZERO evidence the above happens but I know I have felt very pressured by some realtors to use a specific closing attorney and the realtor was extremely disappointed and vocal when I told them I was going to use someone else.
Posted on 1/17/14 at 12:37 pm to LSURussian
Yep. Not in real estate though. And, there might be a circumstance where I wouldn't buy title insurance, but it hasn't occurred yet. In my practice, I've done a few title insurance claims. Hope all goes smoothly.
Posted on 1/17/14 at 12:38 pm to OTIS2
Posted on 1/17/14 at 12:52 pm to LSURussian
quote:
75%+ of the cost of the insurance goes to the title attorney selling it
That's low. Normally its 80/20
Posted on 1/17/14 at 12:57 pm to LSURussian
quote:
Which leads me to another issue: Do some realtors have agreements with closing attorneys for some under the table money for referring their buyers to those attorneys? Nothing in writing, of course, just a friendly, wink-wink, type of arrangement. Full disclosure: I have ZERO evidence the above happens but I know I have felt very pressured by some realtors to use a specific closing attorney and the realtor was extremely disappointed and vocal when I told them I was going to use someone else.
I don't believe money changes hand in the sense you are talking about. But title companies market to two different sets of people: (1) realtors and (2) originators. Those are the people who have first contact with buyers. They have influence over them and where to go. Typical marketing stuff probably happens -- lunches, christmas gifts. But I would be floored if someone gave actual money per closing or percentages or anything like that.
Posted on 1/17/14 at 1:05 pm to Bear Is Dead
quote:Probably so. I just looked at the figures on the HUD settlement form and did quick mental math. I was floored that the insurance provider received so little of the premium.
That's low. Normally its 80/20
That was my first hint that the risk of loss by them must be pretty low. For our $340,000 house the amount of the almost $1,800 premium cost that went to the insurance company was only about $430. The rest went to the closing attorney.
And, secondly, the relative LARGE amount that goes to the closing attorney for selling the insurance made me question the objectivity of the attorney.
Posted on 1/17/14 at 1:05 pm to rmc
Thanks. I feel better.......I think. 
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