Saw your blog online, as I was searching for information.
What happens if the closing attorney, who is also a title agent, never files the title insurance policy with the title company, and therefore never pays the title company for the policy that a client has purchased? Is it unethical to do this, and is there an amount of time that the attorney has to file? I'm referring to cases in which the attorney has many, many, many unfiled policies. Does that mean the property isn't protected, and/or that the insurance hasn't been purchased?
Hi, Anon: It is illegal for a title agent to collect money from a consumer and fail to issue the policy. Title companies expect policies to be issued and premiums remitted within a reasonable period of time. Anything over 90 days would be considered too long.
Consumers are at risk and likely not covered, though there are some cases in which title companies will extend coverage with the right evidence - title commitment and a HUD-1 that identifies the title company and the purchase of coverage.
If you have evidence and can identify the title underwriter, I'd contact their office and let them know what's going on. You can also notify the state insurance department.
Bad actors like this need to be stopped. Good luck.