Respa: Section 9 :: Buying Title Insuance

Section 9 of RESPA (12 U.S.C. §2608) states that:
1. No seller of property that will be purchased with the assistance of a federally related mortgage loan shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the buyer from any particular title company.

2. Any seller who violates the provisions of subsection (a) of this section shall be liable to the buyer in an amount equal to three times all charges made for such title insurance

Sellers are no longer allowed to pick the title company which the title policy will be purchased. Since the buyer is the beneficiary of the title policy it makes sense that the buyer get to pick who issues the policy. Only if the seller pays all title and related closing cost can they pick who issues the title policy.

I have a simple way of looking at this. Seller should let the buyers or buyers agent pick the title company. The buyers agent is going to be way more involved with the title company than the sellers are. We are often waiting on the buyers lenders at closing, so it makes sense to use a title company that the buyers agent is comfortable with.

Another thing is that title companies fees are very similar. Plus $5 here and minus $15 there. When it is all said and done, I think it is a wash. Sellers don’t get too hung up on your agent not knowing the people at a specific title company. They all get the job done.

Ed Neuhaus

About Ed Neuhaus

El Capitan is a nickname given to me years ago. This was just before or just after I was married. No, unfortunately it was not given to me by my wife. She has far better and worse things to call me. I sailed a lot a young man and I know a thing or two about sailboats. Maybe that is why I got the nickname. Maybe my nicknamers were thinking I was strong as a rock like El Capitan in Yosemite National Park. I hope it was because they thought of me as their leader. I am el Capitan of our ship, Broker for our company, father of two, husband, sailor, drummer, soon to be pilot, and all around bad ass. Ok maybe that last part about the bad ass is too much. But hey, why not. BTW, did I tell you I want to be a pilot? no wait, really, I want to be a pilot. You know the guys who fly planes. (this would all be a lot better in a video soliloquy than in typed form, but use the tools you got right?)

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