Submitted Letter to the Editor to the Houston Chronicle
April 12, 2010
An article titled “Control of title insurance costs during closing now sought,” which appeared in the April 4 edition of the Houston Chronicle, fails to mention the many benefits title insurance provides for homebuyers and misrepresents the reality of title insurance in Texas.
It was only last month that Texas’ attorney general noted the importance of protecting one’s property rights by purchasing an owner’s title insurance policy following the announcement that a Texas developer was charged with defrauding homebuyers by selling houses that were encumbered by undisclosed liens.
Despite advances in technology, there is a great deal of work that goes into the production of a title insurance policy. For a one-time fee, a title agent examines the history of a property contained in public records, where they find issues in one out of every three title searches. This work is needed to ensure clear ownership to a property.
In addition to the purchase price of the home, there are fees paid at the closing table including taxes, real estate commissions and mortgage fees. Title insurance is only a small fraction of these other expenses associated with closing on a home.
Most states, including Texas, require that rates not be excessive, inadequate or unfairly discriminatory. In Texas, title insurance rates are regulated and set in a contested public hearing after examining extensive economic data. According to the Texas Department of Insurance, rates were actually lowered by 17 percent from 2001 to 2009.
For more information on title insurance, visit www.homeclosing101.org.
Mark Winter, president, American Land Title Association