As a real estate attorney who has been practicing law for more than 30 years, and as the President of Tampa Title Company (a local title insurance agency that has been in the business of conducting real estate closings for more than 15 years), I know the important role that title insurance agents serve in every real estate transaction.
Unfortunately, title insurance agents have recently come under attack by State Senator Mike Bennett of Bradenton, who has introduced a bill (Senate Bill 260) in the 2010 legislative session which seeks to put title insurance agents out of business.
This would be an enormous mistake because title insurance agents are the persons on the front lines of every closing who are charged with the responsibility of doing all of the things that have to be done to enable a real estate closing to occur.
For years, title insurance agents have not publicized their important role in the real estate closing process. Often, we would simply do our jobs behind the scenes to correct title defects and pull potentially failed closings out of the fire, without “patting ourselves on the back.” It was simply part of the heavy lifting (and thankless job) that title insurance agents have done for years.
But, now that Senator Bennett is sticking a knife in the backs of all Florida title insurance agents, it's time to educate the public about the vital role that title agents fullfil in every real estate closing.
A title insurance agent’s job is risk elimination. We are charged with meeting a public expectation that when a person buys a home or commercial property they really do own it.
Unlike other types of insurance policies in which the agent acts primarily as a salesperson, a title insurance agent is heavily involved in the investigation of the current status of the title and all liens on the property, and it is the title agent’s job to do what is necessary to remove those liens against the property so that they will not adversely affect the new owner after they move into their home.
As if that isn’t enough, title agents are also charged with the responsibility to follow all of the lender’s tedious loan closing instructions (which are often 15 pages long), and closing the loans that fund our real estate closings. We also prepare the Settlement Statement so that the Buyers will know how much money to bring to closing and the Sellers will know how much they will receive from the closing. We obtain payoff letters from mortgage holders, homeowner’s associations, and many others whose debts have to be paid through the closing. We prepare deeds to transfer title, affidavits required for closing, supervise the execution of the documents, record the documents in the public records and file 1099 tax forms to report sales information to the IRS. We disburse the funds to close the transaction to pay off the existing mortgages against the property.
What we really provide is indemnity and security. For a one-time charge, a title insurance policy provides indemnity for as long as someone owns the property, and continuing protection after they sell it, in most cases, to cover losses arising from many sources including human error, fraud or mistakes.
Title insurance also provides coverage for things that cannot be discerned from an examination of the documents in the public records. For example, forgeries of prior documents in the chain of title are matters which are insured. In these days of increasing identity theft, title insurance coverage is even more important than ever.
And, yes, there are many title insurance claims which arise as a result of human errors in the closing process. The high volume of transactions that occurred in the last real estate boom has spawned many title claims already. However, in many cases, these errors are not discovered for many years—until the owners try to sell their property.
Another under-reported fact is that many of titles of properties that have been acquired through mortgage foreclosures have numerous title problems. With the prospect of 450,000 foreclosed properties coming back into the sales market in the coming years, it will be more important than ever to have qualified, experienced title insurance agents on the front lines, investigating the quality of the foreclosing attorney’s work, and clearing problems before they become the new buyer’s problems.
Without the skillful work that an experienced title agent performs, who will be there to ensure that the title to the home that you buy is marketable, so that you won’t have problems with your title when you want to sell your home in the future?
Please tell your legislators that title insurance agents are important--for once, we deserve a "pat on the back," not a "knife in the back."
Urge your legislators to vote against Senate Bill 260.
By the way, you may recognize Senator Mike Bennett's name. He is the author of last year's infamous Senate Bill 360 that gutted Florida's growth management laws and will now allow future development to occur virtually unchecked, without first determining if there are sufficient roads, utilities, schools, etc. to serve the new development. Senator Bennett is an electrical contractor who will likely benefit from last year's bill.
Those who have tried to educate him about this title insurance issue and who have tried to dissuade him from filing S.B. 260 this year have been repeatedly told by Senator Bennett, "I don't care."
So, last year Sen. Bennett didn't care about growth management, and this year, he doesn't care about quality real estate closings.
You should care that Sen. Bennett's term does not expire until 2012.
No comments:
Post a Comment