Governor Denies Request to Put Title Insurance Reform on Legislature's Agenda This Session
|January 22, 2008|
The Associated Press
SANTA FE — Gov. Bill Richardson has turned down requests from state regulators, the attorney general and others to have the Legislature consider reforms of the title insurance industry, which contributed to Richardson's presidential campaign.
Advocates say legislation is needed to bring price competition to the title insurance system, which could lower closing costs for home buyers.
Richardson will not put title insurance on the agenda of the 30-day session, but the industry's political contributions played no role in the governor's decision, according to a Richardson spokesman, Allan Oliver.
"The governor only works in the best interests of New Mexicans. That's how he makes his decisions. No other way," Oliver said.
Title insurance company officials and their family members contributed at least $30,000 to Richardson's presidential campaign through September, according to a review of campaign finance records by The Associated Press. Richardson's campaign collected about $18 million through the third quarter of 2007, which is the most recent time period available for Federal
One of Richardson's top political aides also has ties to the industry.
Dave Contarino, Richardson's presidential campaign manager and the governor's former chief of staff, and his wife started a title company in Santa Fe. His wife, Linda Marquette, is president of the business.
"The governor doesn't oppose the concept of title insurance reform, but any reform effort will be complex, will take time, and must be sure not to increase costs for consumers," Oliver said in a statement.
"A hectic 30-day session is simply not enough time for a full and fair hearing on the issue. The governor believes that title insurance reform should be thoroughly studied during the 2008 interim."
During 30-day sessions, lawmakers can consider only budget and tax proposals and those issues allowed by the governor. Richardson wants the Legislature to focus on his proposal for extending health coverage to all New Mexicans.
The Public Regulation Commission, Attorney General Gary King, Think New Mexico — an independent think tank — and AARP of New Mexico were among those asking Richardson to allow lawmakers to consider proposed title insurance changes this session.
Fred Nathan, executive director of the think tank, said Monday he hoped Richardson would reconsider his decision about title insurance in the session.
"Governor Richardson has always been an effective fighter for working middle class families, who would benefit most from title insurance reform. This reform is increasingly urgent, given the widening recession and the deepening crisis in the housing market," Nathan said.
Typically, people buying a home must pay for title insurance when obtaining a mortgage or refinancing a home. The insurance is to provide a guarantee against losses in case of a problem with the ownership records of the property.
Currently, the state determines the cost of title insurance and sets a uniform rate that all title insurance companies must charge.
In a report last year, Think New Mexico concluded that consumers could save millions of dollars if there was competition in the title insurance market.
Legislation developed by the PRC, Superintendent of Insurance Morris "Mo" Chavez and Think New Mexico would establish a cap on title insurance rates and allow competition among companies on prices below the maximum premium. In addition, the legislation would eliminate immunity for title insurers from damage lawsuits by home buyers when there was a negligent title search.
Copyright 2008 Associated Press