A Denver man is trying to form a class action for a lawsuit against a title insurance company that he claims is overcharging homeowners.
David Resnick filed suit in Denver District Court last week against Land Title Guarantee Co., saying it overcharged him and other homeowners.
His attorney, Jeffrey Berens, said he will ask a judge to certify a class of all people overcharged by Land Title, but that could take as long as a year.
“For years, the title insurance industry (including Defendant) has overcharged certain individual homeowners hundreds of dollars each for title insurance by failing to pass along the statutorily-mandated Reissue Rate discounts,” Berens wrote in the lawsuit, filed Sept. 13.
Peter Griffiths, in-house counsel at Land Title, declined to comment on the specifics.
“We’re reviewing all the issues raised, and they’re under investigation by us,” he said.
Resnick, who could not be reached for comment, refinanced his mortgage in 2006 and 2007 and was charged the full amount of title insurance of $1,330, the lawsuit alleges. Land Title should have charged him a lesser amount for the reissue, according to the suit.
Resnick also charges that, unlike property and casualty insurance companies that pay out an average of 70 percent of what they collect in claims, title insurance companies pay only a maximum of $125 for the title check and an average of $74 in claims, leaving them a profit of more than 90 percent, the lawsuit says.
Almost a decade ago, the Colorado Division of Insurance fined Land Title $20,500 for, in part, having a 68 percent error rate in what it charges compared with its filings with insurance regulators, according to stipulated order and division official Bobbie Baca.
Baca said Land Title’s filing covering 2006 and 2007 says it will provide a 50 percent discount for a policy reissued within five years.
Griffiths said he couldn’t comment on the insurance department stipulation because he did not know about it.