Wednesday, February 27, 2008

query: lawyers that collect money for title insurance and don't write a policy

They ought to be tarred and feathered, right? Well, someone should take responsibility for such a bad move. Anyway, the good news is that YOU, as the consumer, can prove that title insurance was purchased by presenting a copy of your HUD-1 Settlement Statement. This is your official receipt.

I do hope that you also received a copy of your title insurance commitment before you closed, but I'll bet that you did not. If you have the title insurance commitment, notice the name of the title company on the jacket. Contact them and present the commitment and the HUD-1.

If you do not have a commitment but you DO have the HUD-1, look to see if the title company is named on the HUD and contact them with the HUD as proof of payment.

If you are striking out left and right here, try contacting your state department of insurance or attorney general's office for assistance.

This query reminds us that there are TWO very important steps a wise consumer of title insurance should follow.

First, always get a copy of your title insurance commitment to review BEFORE you close. If the attorney or title agent gives you any grief over this request, fire them and get back any money you have already paid. It's their job to give you this commitment. If they are not willing to produce the commitment, there's a good chance they won't get around to writing the actual title insurance. Got it?

OK, next, look very carefully at the HUD-1 to make certain you are paying for title insurance and not just a search. Also, confirm that there is OWNER coverage and not just LENDER coverage. There are ignorant attorneys and title agents who think they are doing you a favor by only issuing the lender coverage. I know it sounds idiotic but they think you want to save two bucks and go unprotected but they are afraid to ask you point blank so they just make the decision for you.

Be your own best friend and pay attention.

And good luck to you, my friend. I hope they catch that dirty rotten crook.

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