I've read that title insurance charges here in Florida are much higher than in other states. I haven't compared them myself, so I don't know that. And it's not the point of this post.
We always review the HUD statements for our clients, prior to closing.
This week we were reviewing a HUD statement for our buyer, and noticed that the title company was charging a $450 "processing fee". We objected, and so - independently - did our client.
Title companies used to charge, say, $325 for "title insurance" for a simultaneous issue. Since the actual cost to the title company was $25, this was considered an "Upcharge", allowed by the underwriter. In the last few months, the underwriters announced to the title companies that they would take their share, probably 33%, of the whole "title insurance" cost. To avoid this, many title companies are now charging $25 for title insurance, and switching the remainder to "processing fee". They explain that "it's the same charge, just in a different place". And how do we explain this to our clients? And what about cases like this one when it's not $300 being switched, but $450?
It seems our buyers are being held hostage by title insurors that the seller chooses (since using a separate title company instead of a simultaneous issue would be prohibitially expensive. A few agents are now inserting a clause in their offers that restrict the amount the buyer will pay for title services.
Are you dealing with this? How?
