Saturday, November 26, 2011

My friend was steered against his will and used the incident to teach the title agent a lesson or two.

I have a long time friend who is a savvy consumer of real estate.  He, like me, comes from a family familiar with the business of real estate from the inside.  So any provider of settlement services had better be on the up and up or else. ;)

Since we introduced our Choose and Save Program several years ago, we've processed many transactions for my friend who has argued with me that we aren't charging enough.  He may be right but I like the structure of the program and am convinced it's a good win-win for The Closing Specialists and our customers.  We get alot of repeat business through this program. ;)

At any rate, my friend was assisting his son and daughter-in-law through a refinance and planned as usual to take advantage of Choose and Save.  When they selected a mortgage lender, the loan officer presented a REPSA affiliated business disclosure.  My friend drew a big X over the form and added the language that they would be using The Closing Specialists for title insurance and closing.  The loan officer said okay.

Three weeks later my friend called to say the file was in underwriting and that he wanted to await the final approval before placing the order through Choose and Save.  He was waiting because there is a $300 non-refundable deposit paid when you order title in our program.  I said he needed to check with his lender because a file in underwriting typically has a title insurance commitment in place.  He checked and yes, the loan officer had forgotten and placed the title order with his affiliated company.

There were some other complications including a rate lock expiration and so I said that though I'd like the business, I'd also enjoy helping them get the title agency to give them pricing that was equal to our Choose and Save plan. The day before closing, my friend obtained the draft HUD.  We identified the fees that would have been waived under Choose and Save and he insisted that the title agency waive the fees.  They objected but the loan officer absorbed the cost.  The savings was around $250.

Then we checked the title insurance premium.  Since my friend's son had an unsatisfied mortgage with a local bank on record that had been originated within the last two years, we new they qualified for the PA refinance rate of 70% of reissue rate.  Check our title premium calculator to see the difference.  The title agent wanted to charge the reissue rate and was refusing to follow TIRBOP rules.  It took a few emails of the language in section 2.8 of TIRBOP and finally my friend had to read the sentence word by word and get the title agent to understand the simple language contained in the rule.

My friend offered to close in protest and resolve the matter post closing with the appropriate regulatory authority and with that the HUD-1 was adjusted by the title agent and they moved forward with a closing priced as it would have been if he used our Choose and Save Program.

Let this be a lesson to consumers to not give up and to stand your ground.  You can shop for title insurance and settlement services.  Do not allow someone to make these decisions for you.  ;)

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