... I sometimes wonder about this, with the housing crisis: for how many families are the closing costs too prohibitive to refinance their loan? ...
I was under the impression that the closing costs were usually dumped into the new loan. Is this wrong?
Good question. I can't remember why that wasn't sufficient reason when I looked into refinancing.
The reason we can't roll them in now is that we're maxing out what they'll loan us: 80% of the assessed value. If the house had assessed an extra 10K higher, we could have rolled in the closing costs.
Maybe it was the same reason before - the outstanding mortgage might have been more than 80%, or too close, to roll in closing costs, and the second mortgage at a higher rate wouldn't have been worth it.
Speaking of closing costs, I just bought a townhouse and was charged $1965 for title insurance of which $255.45 went to the underwriter and $1709.55 went to the agent. Am I correct that the $1709.55 is a complete ripoff (the agent did nothing) and if so why aren't more people complaining?
Are you going to have to get a new title insurance policy to refinance?
Even if you can roll them in, though, it's very possible for the amount of the closing costs to outweigh the savings from a lower interest rate. We probably missed a window where refinancing would have saved us some money, but every time we did the math the closing costs made it pointless.
Yes. That's one of the ~$1500 charges. And what the hell is title insurance anyway?
I think the idea is that if whoever was responsible for searching the title missed something, and a rival claimant to be the owner of the property emerges, you're covered.
So people are usually covered against legal fees in those situations? Does the insurance actually function?
6 they'll pay out if you end up litigating whether you actually own the property. Unless there's an applicable exception. No one will lend without it, but I'm not sure why you have to buy it again if there hasn't been an intervening title action. I suppose changing loan amount and lender is sufficient reason.
1 answers 3.1.
IME, lenders and originators are very careless wrt the limits on fees in state law and/or RESPA. But then again, my experience in this area (representing lenders or assignees of lenders) would skew towards improper fees.
I think the amount of necessary insurance probably made more sense back when title searches were more a matter of leafing through handwritten documents at the courthouse. I wouldn't be surprised if it's horrifically overpriced when you do the math on how likely it is that there's a significant cloud on what looked like a clear title these days.
IANANYL and IANJBSL, but I think I'd want to compare fees in 3 to current guidance on RESPA.
8
So people are usually covered against legal fees in those situations? Does the insurance actually function?
In my case I appear to be covered up to the purchase price. There is a real albeit small risk here which the underwriting fee presumably covers. But the rate is set by law and the additional $1709.55 seems like a pure ripoff to me.
10 -- How much litigation do you think 1500 buys? I'm not sure how profitable this line is for the insurance companies, but really, if there is a claim, you're going to be awfully glad you had a one time charge that isn't enough to write an answer to a complaint.
Or, I should say, if you're the lender, you'll be glad.
How much litigation do you think 1500 buys?
It's insurance. You should get a lot more coverage than the cost of the policy.
I know somebody who bought a condo in Vail--and just after they closed but before the new deed was recorded the seller ran down to the Courthouse and mortgaged it again. (I presume someone was bribed to overlook the procedures that are supposed to keep this from happening)
Title insurance is supposed to keep that kind of thing from messing up your life...
I represented a lender in a quiet title suit brought on by the second transferee after a forged deed.
15: I think that's the point Carp was making.
I knew people that used to forge deeds in EverQuest all over the place.
Oh, and it's not worthless -- I just bet the odds of something screwy happening to your title are much lower now than they were before records were computerized, and that pricing hasn't necessarily responded to the change in odds.
OT: I hate that airlines are so fucking unreliable that I can't make a train reservation for after I land, because realistically I have no clue when that will be. Plus plane to Europe, then train from city center to other city, then bus to another city = pain in the ass trip.
Also, I'm going to be in London from Jan 3-7, anybody around?
7: Doesn't that happen in Mister Blandings Refinances His Dream Home?
If you think for even a moment about the things that are happening with money when you buy a home, it's just unbelievable that anyone would agree to it.
11
IANANYL and IANJBSL, but I think I'd want to compare fees in 3 to current guidance on RESPA.
@##$, it appears I was charged 20% extra for an enhanced policy which I didn't knowingly agree to and which I understand is an even bigger rippoff than the standard policy. What I get for not checking the figures before the closing I guess.
... and then in the end, our 30 year mortgage monthly payment is barely going up.
Will it be paid off at the same time or will you be making more payments at the end?
More payments. The clock is restarting at 0, and we bought the house 6 years ago.
13
... but really, if there is a claim, you're going to be awfully glad you had a one time charge that isn't enough to write an answer to a complaint.
So it shouldn't bother me that I paid 5 times the fair price for this coverage (if indeed I did)? Or that the excess profit is going to a bunch of polictically connected insiders?
Title insurance is a major ripoff sort of comparable to those way overpriced warranties they try to stick you with for cars, computers, etc.
Closing costs are a major reason why all the theoretical earning power locked up in today's low, low rates are not being realized for middle class consumers. It's a particularly big problem given that so many homeowners are underwater, which as Heebie points out prevents you from rolling them into the loan. Some people have proposed the government mass refinancing all Fannie/Freddie guaranteed mortgages, but Obama's actual proposal was much more modest -- it looks like the most we will get is a broad reduction on GSE fees for refinancing.
I remember seeing once that only 5 percent of title insurance premium revenues went to litigation costs or losses. Most of the rest went to the apparently incredibly labor-intensive task of looking up the title.
What you need is a land registry.
To the OP, it's a safe bet that we're all being unusually ripped off compared to Europe, similar to mobile phone services.
Closing costs are a major reason why all the theoretical earning power locked up in today's low, low rates are not being realized for middle class consumers.
My understanding from a real estate broker I chat with occasionally is that the newfound need to produce a fairly largish down payment (20%?) is a serious obstacle as well, at least for actually buying rather than refinancing.
28
... Most of the rest went to the apparently incredibly labor-intensive task of looking up the title.
This was apparently listed separately and appears to have amounted to just $100 (+$73 in government fees).
30: Yes, given the absence of a land registry per 29. Wikipedia has some a decent write-up.
How can a country as obsessed with property as the United States not have a land registry? It's the kind of thing you'd expect to find in the Bill of Rights.
Probably because we didn't have one 150 years ago when things like that all belonged to the individual states.
Christ, I thought 29 was a joke. Land titles aren't even indexed?! I just figured we had some registry that was hard to work with. And Wikipedia makes some non-neutral assertion that regiatries are worse because of the risk of forgery - as if it's nothing more robust than a bunch of file cabinets behind a desk.
36: Registries are exactly the sort of thing that the states could have set up, though.
36. You can have the land registry at city level (we do), as long as there's an obligation to maintain the thing. American revolutionaries - not just too cheap to pay for their own defense, to idle to keep a record of their own holdings.
Ireland for the last umpty years (but not much longer) has had in parallel a Land Registry and a Registry of Deeds, most property within old city/ town limits being in the older more cumbersome system. Title reinsurance still isn't a thing, though, and it would be odd for the costs of a remortgage to exceed €1,000 by much nowadays.
39: Various entities have done this in the US. Here is an interesting bit of history from Illinois where it was instituted in 1897 apparently in large part because Chicago records were destroyed in the 1871 fire (but not for all property, by 1937 20% of the land parcels in Cook County were held that way). However, it was killed in 1992--Americans aren't going to put up with some gubmint bureaucracy to trace private property for God's sake.
The use of the Torrens system began to decline during the 1930s; by then, 60 years of public records were available to private insurance companies, who competed vigorously with the Torrens system. Only 163 new registrations were filed from 1967 to 1977. Attorneys preferred the fast, efficient title insurance company methods to the slower administrative processes of the Torrens system. Also in the late 1970s the practice of selling mortgages to a secondary market became widespread, but institutional investors would not accept a Torrens certificate as a guarantee of title.
My recent half-day (and a previous one 20 years earlier) tracing back my (and sundry neighbors') records to an early 19th century grant (measured in perches and bounded two Oak trees on the Allegheny) revealed that a lot of little nuances get dropped along the way. And there clearly is a (relatively small) cadre of individuals here in Allegheny County who make their living navigating that system presumably on behalf of the title insurance folks. No idea how far back those investigations go on routine transfers. Right now, Allegheny County has them computerized back to the early '90s.
Wait, here in town you can go to the county tax assessor and look up who owns which land. What's the difference between whatever their files say, and an official land registry?
Probably that a land registry would be legally conclusive.
The tax collector's registry is sufficiently legally conclusive for tax collecting purposes. If you're claiming a long-lost claim to land, then the tax collector is at least going to know who paid taxes on it every year along the way.
What's the difference between whatever their files say, and an official land registry?
The difference is that an official land registry is socialism.
More seriously, I don't think the tax collector cares about who has a lien on the property, which is what title insurance is largely concerned with.
47: Plus easements and the like.
A national effort to put together a land registry would be a nice, useful, broad geographically based, stimulative piece of infrastructure investment, if we were the type of country interested in stimulating the economy by putting people to work at useful tasks.
To be clear, that title insurance that the lender requires generally only covers the lender in the event of a challenge to the title. If you want to be covered as well, you have to pay extra.
I'd missed that detail. I'm going to go ahead and call it bullshit, then.
49: Would it be stimulative, though? It would increase efficiency, more money going to genuinely useful things, but that's money out of the pockets of those doing the title searches etc.
I suppose it would stimulate to the extent that that money is going to profits rather than salaries.
We just bought as well, after several years renting courtesy of having to sell during the real estate apocalypse. There were similar BS charges. However, we actually got a pretty good deal because as far as we can tell the middlemen--whose cut depends on us paying more or failing to negotiate properly--are all pretty angry at us. The number of people in the brokering and realty business who really want to believe it's still 2006 is very high. They are not used to, and do not like, buyers having bargaining power.
When I had a mortgage, I had a freakishly great lender*, and was able to refinance a somewhat larger loan for something less than 3 grand. This was during the height of the housing bubble, so maybe it was easier in those days.
*when I got the original loan, other lenders told me that if I was seriously able to get that rate, they couldn't compete.
49
A national effort to put together a land registry would be a nice, useful, broad geographically based, stimulative piece of infrastructure investment, if we were the type of country interested in stimulating the economy by putting people to work at useful tasks.
This seems likely to be an example of the perfect being the enemy of the good. How about we just cut the fixed prices for title insurance to something that doesn't provide ridiculous profits?
Would it be stimulative, though?
The stimulus would be the project itself - employing all those people to get all the various titles into the registry and squared away. Once the registry is built, the stimulus would be less acute, more of an overall "our processes are way more efficient now" kind of thing.
I had to move into the basement when my mom started renting to Sergio but it's ok, I like it way more than my old room. Even though Sergio isn't sleeping in there. Except I used to like looking out the window sometimes. But instead I've got you guys, and you're THE BEST!!!
53: I didn't realize buyers had bargaining power these days, Gonerill.
How about we just cut the fixed prices for title insurance to something that doesn't provide ridiculous profits?
If only there was some kind of Consumer Financial Protection Board to make that happen....
58
... more of an overall "our processes are way more efficient now" kind of thing.
I am not convinced the current process is really inherently all that inefficient, the issue is that there is no price competition, prices are set by law at ridiculous levels.
What are the equivalent fees or taxes in land registry countries?
59
If only there was some kind of Consumer Financial Protection Board to make that happen....
Would any such board even have jurisdiction over the government insider collusion that is at issue here? I certainly haven't heard anything to that effect.
58: Well, on the one hand it was surprisingly difficult to get a mortgage because the banks are suddenly all super-responsible and not wanting to lend any money etc. On the other hand, some of the people we dealt with clearly didn't like people who could walk away at will (because renting) and who'd be quite happy to do so.
62
... On the other hand, some of the people we dealt with clearly didn't like people who could walk away at will (because renting) and who'd be quite happy to do so.
The middle people generally don't get paid unless there is a deal so they will be pressuring buyers to come up in price but they will also be pressuring sellers to come down. Sellers can rent instead also.
59, 61: Not sure / don't think the CFPB has jurisdiction here. It is a matter for state insurance regulators.
Our lender fucked up many, many things that very nearly led to our losing the house, but we were lucky enough to get through the horrible process. (Part of our problem was that we already owned a house, so we'd had to refinance that before being able to buy the new one, and it was the refinance that got held up but while the bank was willing to give us money to more than cover the amount of the two together, it wouldn't go ahead and give us the money in two chunks.)
It turns out that they also fucked up the title, only getting the signature of the son of the former (now deceased) owners who was the executor and obsessive-compulsive asshole. Fortunately in adding me to the title we found this out and were able to get them to fix their error, but we'd really have been in trouble if we'd waited years and years before finding all that out.
I can't talk about this without getting mad, so I'm out for now. Oh, it was obnoxious, all of it.
62: For a lot of sellers coming down in price equates to having to bring money, money they don't have, to the table at closing.
66
For a lot of sellers coming down in price equates to having to bring money, money they don't have, to the table at closing.
And this differs from buyers coming up in price?
We do low-value (
is there really any 'insiderism', other than needing connections to a bank/realestate agent.
21.2 yup. That's back to normal week for us (my family), so should be able to head to London one night.
re: 21.2
Ditto. I live in London, so that's no problem. Slight chance I'll be away, otherwise ...
37: And Wikipedia makes some non-neutral assertion that regiatries are worse because of the risk of forgery - as if it's nothing more robust than a bunch of file cabinets behind a desk.
If you're talking about this paragraph:
The advantage of recording versus registration, and the reason why recording is still overwhelmingly dominant in the United States (thus necessitating the use of title insurance), is that the U.S. has recognized that a property system which is inherently contingent provides a stronger guarantee of private property rights over the long run than a registration system which provides false assurance of one's rights to private property. As the title insurance industry likes to point out, the critical flaw in land registration is that it is extremely vulnerable to fraud. A forger need only sneak one false deed past one incompetent (or collusive) clerk, and the conclusive presumption accorded to the validity of land registration records means that a landowner has immediately and irrevocably lost his or her property forever.That was added in its entirety by a user going by Coolcaesar who has done a bunch of stuff with a lot of articles. He doesn't seem big on references. Oddly enough he's not a title company person - he says he's a 'young lawyer'. (No word if he likes long walks on the beach and candlelit dinners.) The title company guy who worked on the article was mainly interested in editing the section about alternative title companies (that is, ones not owned by the same company that owns the lender), which implies he is trying to drum up a little business by informing borrowers of their rights. (Hey, at least it's straightforward.) Our young lawyer friend also produced this bit in an article he says he wrote for Wikipedia about Legal Aid:
In the 20th Century the movement in favour of legal aid has been top-down, driven by those member's of the legal profession who felt that it was their responsibility to care for those on low income. Legal aid is driven by what lawyers can offer to meet the "legal needs" of those they have identified as poor, marginalised or discriminated against. Therefore legal aid provision is supply driven, not demand driven, leading to wide caps between provisions that meet perceived needs and actual demand. Legal service initiatives, such as neighbourhood mediation and legal services, frequently have to close due to lack of demand while others are overwhelmed with clients.Pseudo-neutral I suppose, but the entire article sounds like a textbook written by the sort of person who reads Claremont Review. So I assume this is all stuff he read in class. (Why is it that if you want bullshit rationalizations, one must turn away from business types and to lawyers, economists and journalists?)
51: I'd missed that detail. I'm going to go ahead and call it bullshit, then.
No one quoted the relevant line from the Wiki article!:
In 2003, according to ALTA, the industry paid out about $662 million in claims, about 4.3% percent of the $15.7 billion taken in as premiums. By comparison, the boiler insurance industry, which like title insurance requires an emphasis on inspections and risk analysis, pays 25% of its premiums in claims. However, no reference to the relationship between when claims are made and when policies are issued is found.They've got a gross markup of 1900%!
58: I am not convinced the current process is really inherently all that inefficient, the issue is that there is no price competition, prices are set by law at ridiculous levels.
Well, of course there's no price competition. There's nothing to compete over - it's a cozy quasi-cartel situation in which everyone is competing to charge as much as possible. The state insurance boards are going to be setting ceilings on prices... or the gouging, if you prefer (and I do). (Although I don't doubt some of that huge markup goes to paying for lobbying on the insurance boards.)
The whole point of the system is to troll public records maintained by local governments to protect the lender against fraud and the lender passes the costs on to you. If the states just collected the money and became responsible for certifying deeds it would cost a lot less (most of the bureaucracy and records storage already exists) an there would be a bunch of money left over to fund operations (or to simply not charge). The situation compares directly to student loans from private lenders - since the government is guaranteeing the money, it amounts to government loans to the students with extra interest charges tacked on and given to the lenders who do not actually do anything.
(And guaranteeing a purchaser isn't screwed by a bureaucratic error would be easily rectified by a fairly simple state law establishing a property recovery protection fund, with fund money collected by ... smallish title fees. Such systems exist for things like worker's comp, except with worker's comp there are real issues of insurance needing to be resolved in an ongoing way.)
Price competition for scams. {snork}
max
['C'mon down to Crazy Ivans! I will rip you off for half the price of the competition! That's a 50% off ripoff EVERY SINGLE DAY!']
71
... The state insurance boards are going to be setting ceilings on prices... or the gouging, ...
The ceilings are also floors, you are not allowed to charge less. So who gets the incredibly profitable business is determined by connections making it an insider's game.
71 is very interesting. I have been resolutely not thinking about a recent news story in which a local Registrar of Wills outlined the consequences to her department of a proposed cut in funding. I don't even want to know all the things she is in charge of because the cut-cut-cut-no-matter-what-the-consequences mentality has infected both the Ds and the Rs around these parts.
Having heard some downright petrifying lack-of-clear-title stories in my time, I'm interested in practical ways to maintain buyer protection without unnecessary padding.
Unrelatedly, I see that Vaclav Havel has died. It's strange to realize how crystal-clear in my memory some of his speeches are, given how many years ago I read them. I cited one here before. A true loss to the world.
We had title insurance pay a claim when we went to refinance, they found that a signature hadn't been recorded when the previous owner refinanced. Paid for lawyer time to go back and forth and make and record a certificate fixing the problem, I think ~$2000. Of course I had to front them the money to make the refi go through, then about 6 months later the title insurance company got around to sending me a check and that was only after I began calling them once a day.
On a refi you shouldn't have to re-purchase the portion of the title insurance that covers your loss, if you already bought that at a previous transaction. If you're refinancing with the same lender I think you can get a break there as well. I think you also have the option to name your own title insurance agent, although of course they won't tell you that. There are several items in the HUD-1 that you have the option of shopping around to get a better deal, you should ask for each one whether you have the option of finding an alternative.
I don't know what all closing costs we had to pay, but not all of it was for the transaction. We paid a point for a lower rate and 2% in transfer taxes (and 2% more paid by the seller). So, it was 3% of the house before we'd even lined the pocket of the first leech or gotten to our down payment.
My parents were about to buy a house but the title insurance people found another title in their search and so it was uninsurable. Hopefully the owners had good title insurance, cause the house is now unsellable without paying a lawyer to sort out what's going on. (The mortgage company that owned the other title no longer existed, which makes things complicated.)
If that house was a haunted house, that would be a great story.
A haunted house with a clear title is now boring.
"See that house over there, sonny boy? *Nobody* owns it, and no one ever will. And strange things happen there at night."
There's whole streets of houses like that in Pittsburgh. Depopulation is like that.
79
"See that house over there, sonny boy? *Nobody* owns it, and no one ever will. And strange things happen there at night."
Something like this can occur when the owner abandons a house (and defaults on the mortgage) but the mortgage holder refuses to take title because the property has negative value.
Pittsburgh managed to buy back it's property tax liens from a collection company. The property values dropped so fast, they weren't worth back taxes.
(How has MERS not been mentioned here yet?)
Shearer, if you got charged much more for a meaningless agent's fee than for actual insurance, even though they were both included under the rubric of insurance, economically that implies that there was an attempt at a price ceiling that failed in the implementation, affecting only terminology - and not distorting the market.
And since you still paid way too much actuarially for the insurance, that implies the problem is instead one of oligopoly or some form of collusion.
the mortgage holder refuses to take title because the property has negative value.
Barring toxic environmental liability of some sort, how many properties have negative value? I'm guessing extremely few. (And what does exactly "negative value" even mean? The current owners will actually pay someone to take the property off their hands? I find that hard to believe. If there's a section of the classified ads listing properties that people are willing to pay me to take title to, I've been missing it.)
"Negligible" value I might buy, for certain properties in certain markets. But "negative"?
someone is willing to sell the title for $1 to get it off their hands but there are tax liens and other claims in excess of $2000. negative value.
The current owners will actually pay someone to take the property off their hands?
That doesn't happen because the local governments can't make the owner pay. But it isn't all that rare that the city has to pay money in order to make a house saleable at any price. In many neighborhoods in Pittsburgh, the city will pay thousands of dollars to push down a house and then give* the lot to the people next door to use as a bigger yard.
*I think they want $600 for it or something. Well below the cost of removing the house.
What 87 said. But it is usually more than tax liens. Once house prices drop low enough that potential landlords stop worrying about resale and figure they can profit enough from rent that they don't care what happens in five years, the house is on a course to be worth less than nothing.
For example, a guy buys a $30,000 house and puts $5,000 into it to meet Section 8 standards. He can then rent it out for $1,200 a month or whatever because Section 8 is more worried about bedrooms and square feet than what the rest of the houses in the neighborhood are worth. Then, five years down the line, that guy hasn't been maintaining the house and it gets so bad that the tenant moves and he can't find a new one. Or a storm comes and he never made a single insurance payment after his Section 8 inspection. Plus, he hasn't been paying property taxes and is now $3,000 in arrears. To keep the house, he's got to put $20,000 into repairs and pay the taxes. If enough people on the street have been acting like this, or if the city has lost another 10,000 households, the rest of the houses on the street will have dropped in price and instead of paying $23,000 to fix the house he has, he'll just buy a different house, one that someone maintained, for $15,000 and let the other one go. He's doubled his money in five years on the house he dumped. The dumped house is already uneconomical to fix with $20,000 in deferred maintenance. After a year with a hole in the roof, that figure will rise especially after it sits empty long enough for somebody to remove the copper.
sits empty long enough for somebody to remove the copper
I've heard the air conditioner coils are where the quick copper money is.
Air conditioner coils and the Chicago Merc.
86
"Negligible" value I might buy, for certain properties in certain markets. But "negative"?
An article about bank walkaways in Cleveland.
Lenders or mortgage companies decide they don't want homes they have already foreclosed on, sometimes because the value has plummeted or they believe the homes could become costly liabilities if they are socked with housing code violations.
But without that sale, the property can languish abandoned and ripe for vandalism. As liens and liabilities mount -- creating a so-called "toxic title" -- it becomes even harder to transfer the property. Neighborhoods and local governments are left to deal with the mess.
...
But now, he says, when a growing number of properties are worth only a few thousand dollars, it doesn't make sense for mortgage companies to take title to properties with little value and the potential for costly city code violations.
...
Another slice of the dismal pie: In Cleveland more than 60 percent of the foreclosed homes sold by mortgage companies went for $10,000 or less.
26 -- I wasn't suggesting you suck it up. I'm suggesting you look at RESPA and other rules on the exact fee, and if they are excessive, raise a stink about it.
Anyway, look at this article, in the price listings at the bottom. When the median sales price for a whole neighborhood is $5,400, it would seem to imply strong odds that many houses are worth less than nothing. A roof costs more and they almost always last less than 30 years.
93
I wasn't suggesting you suck it up. I'm suggesting you look at RESPA and other rules on the exact fee, and if they are excessive, raise a stink about it.
The fee was the fee (for an enhanced policy) set by New Jersey regulations based on the sales price. It appears to have been grossly excessive but I don't see much point in trying to complain on an individual basis, every buyer is being charged the same excessive rates.
Including the agent fee? What a rip.
But I still think you should work through RESPA, if it applies. Just because a fee is set by the state doesn't mean it's ok under federal law. Look at the language in 12 USC 1207(c)(1)(B).
96
Including the agent fee? What a rip.
Yes the $1965 total was the amount set by regulation based on the sales price. Apparently the title insurance companies compete for agents by giving them bigger slices. So the title insurance companies themselves aren't making excessive profits but the local connected agents cleanup.
http://www.law.cornell.edu/uscode/usc_sec_12_00002607----000-.html
James, be the change you want to see in the world.
100
This section says these payments are ok.
by a title company to its duly appointed agent for services actually performed in the issuance of a policy of title insurance or
I said the agent did nothing, this was hyperbole, the agent did perform some actual services like taking the order. But it's hard for me to believe that $1700 was anything like a fair price for them.
It's entirely possible that there's a rule of reason in there somewhere: the idea of RESPA isn't that if someone licks a stamp and affixes it to an envelope, they get to charge whatever they want. Fees are supposed to be related to the value of the services performed. There will be some federal guidance on this.
Or maybe there's some kind of deal between Bush-era HUD and NJ -- former Sec. Jackson might, if only half the things one hears about him are true, be qualified to give advanced seminars in petty corruption to the bureaucrats of NJ.
Mr. Shearer, I'm surprised to hear you raise your voice in an utterance that smacks of the concerns of the 99 percent. I always thought you were on the side of the middlemen: the corn-jobbers and the stock-brokers and the land agents of Sir Rackrent, and etc.
104: The point of these utterances is that the left-wing state of New Jersey is bleeding its citizens dry because of parasitic bureaucrats and featherbedding rent-seekers.
advanced seminars in petty corruption to the bureaucrats of NJ
Like they need them.
I worked for a title insurance company for a while. It was years ago, but I doubt much has changed.
Short version:
1) this is a very, very profitable business; it's basically an oligopoly with a bunch of interlocking cartels. There is not little or no real competition. Regulation is at the state level and is generally not very good.
2) Someone is making a lot of money, but that money is not trickling down to the folks who actually do the work. Title searchers are moderately skilled white collar workers who are generally pretty poorly paid. As a twentysomething trainee searcher, I was making a couple of bucks over minimum wage. My boss, a senior searcher with ~10 years of experience who was supervising several people, was making around the equivalent of $40k today. Benefits were nothing special. The professionals (accountants, lawyers and analysts) are not particularly well paid by the standards of the industry. Nobody tells you "work for a title company, it's cush" -- it isn't. Though you do gain an encyclopedic knowledge of the history of land development in your region, for what that's worth.
3) Most people only have contact with title insurance companies two or three times in their lives, as a single line in a complex invoice for closing costs. So there's almost no public pressure to change things. Reforming title insurance is one of those things that everyone who is familiar with the industry agrees really should be done, but it hasn't happened in 50 years and seems unlikely to happen any time soon.
Doug M.
As a Brit, I'd like to point out that although we have a proper land registry, we also have chancel-repair liability, which is the weirdest fucking thing ever and essentially a subsidy to insurers very much like title insurance. Some properties in the UK come with an unlimited liability to pay for repairs to your local church and nobody has a list except maybe the church and it ain't telling.
Chancel repair liability (unless recorded in the register) comes to an end on 13 October 2013: see item 16 of schedule 1 to the Land Registration Act 2002.
Alex, do you actually know of anybody who's in fact been hit up for repairs to their local chancel since the war?
The case of Andrew and Gail Wallbank, which went all the way to the House of Lords, made the news.
I can't find the final House of Lords decision online, but here's the decision to allow their appeal, which covers the issues.
110: I don't know anyone personally, but I think that I heard about some cases on the BBC. This was over 10 years ago, though.
In that case, everybody come repair me now.
The church started trying to get after it once the 2002 Act was passed, knowing that there was now a finite end date.
I'm not that regular here but isn't this "Opinionated X"- thing becoming rather unhelpful? I apologize if I broke some agreement not to bring this up.
I didn't know we weren't supposed to be unhelpful.
OT: My foreign-born and raised colleague has just forwarded his first faux-warning email. ("Don't ever stop the car. It's a trick to rob and murder you.") He's already naturalized, but if he weren't, I'd like to think I could just forward that warning to the INS and they'd give him a free pass on the test as he's obviously acculturated.
"Faux warning" may not be the right term, since it is a real warning but for a very unlikely danger.
We had a chancel liability thread before, right?
116: so I was spot on, good to know that.
One of my partners makes a good living bringing class actions against title insurance companies. For many reasons noted above, there are many opportunities to overcharge and many ways to sue them, sometimes getting a cash recovery for class members. If Shearer or anyone is interested in the the fun and potential cash recovery (if the case works out you might be reimbursed for your time in additon to the amount the Class Members get) of being a class action plaintiff, my email is on ths post.
For the beneift of anyone who represents class action defendants, I state the obvious that I have no idea whether Shearer or anyone else has a legitimate case, and won't bring a case unless it is.
The title company sales reps come by every week, much like pharma reps call on doctors. Most of the time the work is routine, but I just had a deal that had some title issues, so choosing which title company was more than just who gave the best swag.
Title Reps used to be very generous to real estate agents that gave them a lot of business with trips to Vegas or Hawaii, golf trips, etc., but the Department of Real Estate put the kibosh on that a couple of years ago.
This thread might be dead, but it's a good place for a semi-related query to the mineshaft. I'm in the US right now, and setting up a bank account to pay my student loans from. I'll be semi-regularly putting money into it from my German account (euros->dollars). The exchange rate they'll charge me is a good bit worse than the market rate (ex. current market rate is $1.30/1 euro, but their rate is about $1.22/1 euro). The currency trader at the bank says that this is standard unless you're trading at commercial scale, and I probably won't find a significantly better deal than what they have. But of course he would say that.
Has anyone had experience doing this kind of thing?
Finding a bank with branches in depositing and receiving countries has helped me in the past-- have you checked with US banks that cater to international people? HSBC maybe?
Also, many foreign banks offer the option of dollar-denominated accounts, so then you're just dealing with the transfer fee and the foreign bank's exchange rate.
current market rate is $1.30/1 euro, but their rate is about $1.22/1 euro
The Yen version is the opening line of a racist joke. But I know that you guys frown on such, so no punchline for you.
There are some online forex brokers that do retail business and might be worth checking out. xe.com is one, although I presume it's the sort of thing where there are a lot of scam sites floating about. The Guardian's money pages are a pretty good basic resource, obviously UK-centred.
You should use a Greek bank so that you get more excitement out of reading the news.
"And since you still paid way too much actuarially for the insurance, that implies the problem is instead one of oligopoly or some form of collusion."
This sounds improbable. The reason the payout is so low is that mistakes are so rare that the overhead ends up consuming most of the revenue. Like how the cost of molasses isn't really a major portion of the cost of getting some rum at an nice bar. The difference with 200 years ago is that one portion of the cost has dropped dramatically.
LB: NY closing costs for refi are, like many things in NY, a bit more expensive.
Also, rather than getting a truly new mortgage, it is common to assign the existing mortgage to the new bank and then execute a Mortgage Extension Consolidation Agreement (MECA).
I think this choice has something to do with mortgage taxes or mansion taxes on median apartments.