American Land Title Association® Issues Warning On Unlicensed Activity
July 31, 2002
Consumer Protection Cited
WASHINGTON -- July 31, 2002--The American Land Title Association (ALTA), representing more than 2,000 title insurance and affiliated companies in the United States, today issued an industry-wide bulletin to its members, consumers, and the mortgage lending industry that Radian Guaranty has been officially advised by the Commonwealth of Pennsylvania not to sell its Lien Protection Policy until the company is properly licensed in that state.
This is the seventh state thus far to take such an action against the mortgage insurance company. In June of this year, the California Department of Insurance issued a cease and desist order against Radian for its Lien Protection Policy after the states of Texas, Florida, Connecticut, North Carolina and New Mexico had similarly rejected the product.
James R. Maher, executive vice president of ALTA stated: "We applaud the actions of the state insurance departments, whose mission it is to protect consumers. For more than 125 years, the title insurance industry has helped to provide stability and legitimacy to the millions of residential real estate transactions that take place every year in this country.
"Homeowners and lenders alike have learned to rely on title insurance firms for full title searches, the curing of title defects, and the defense of homeowners and lenders in the event of unexpected title challenges. We do not want to see our credibility damaged by unlicensed insurance operations and misrepresented products."
Maher went on to say that: "In the industry's view, Radian is the most aggressive of several companies offering a so-called `alternative' to title insurance. The problem is that the alternative insurance does not involve a full title search, does not provide the protection of traditional title insurance, and does not provide the industry's legal defense guarantee.
"In addition, it puts the consumer at risk for undetected liens and other title related issues on his or her property."
Finally, said Maher, "These products claim totally unsubstantiated cost savings when, in fact, our studies show that with more than half of the residential mortgages in the country, our members' costs to the borrower are either the same or less expensive than the so-called alternative."
Source: American Land Title Association®