Title Insurance 101 from a St. Louis Title Professional – Part 1 of a series

Dennis Norman

Dennis Norman

By: Dennis Norman

When it comes to buying a home probably one of the least understood aspects of the process is title insurance.  The buyer’s real estate agent tells them it is necessary recommends a company and the buyer moves forward.

Over the past couple of years home owners became more aware of title companies as headlines were made when a few of them went out of business sometimes causing buyers and sellers to lose money.  This was part of the reason for some recent legislation in Missouri to protect consumers in situations such as that.

Wendy Cromer, Vice-President of Marketing, Security Title Insurance Agency LLC

Wendy Cromer, Vice-President of Marketing, Security Title Insurance Agency LLC

To find out more about title insurance and what consumers need to know I turned to a twenty-five year veteran of the title insurance industry, Wendy Cromer, Vice-President of Marketing for Security Title Insurance Agency, LLC in St. Louis, Missouri. Wendy has worked in all aspects of the title business from production and closing to operations. Wendy currently serves as 2nd Vice President of the Missouri Land Title Association and serves as a director for the St. Louis Association of REALTORS(R) and the Missouri Association of Mortgage Brokers.

Wendy agreed to do an E-View TM with me about title insurance, the new laws affecting it and things consumers should know.  I really got a wealth of information from Wendy so I’m going to cover the information over the next few days in a series of posts.  Now for part 1: 

Dennis-Wendy, In the past there were several title companies failures with buyers and sellers losing money.  Lately, in spite of the current market conditions, title company failures does not seem to be a problem.  What do you attribute this to?  Is this a direct result of the new title insurance law that went into effect January 1, 2008?  

Wendy-I do believe that the new title insurance law had an impact on the losses the consumer could realize in today’s market versus the possible losses the consumer faced years ago. 

I attribute this to the mandatory Closing Protection Letter that is issued in relation to settlement services.  Prior to the new legislation, closing protection letters were not issued in the majority of transactions that occurred.  Therefore, in order for a loss to be covered by the underwriter it had to fall under the coverages of the policy.  The closing protection letter, while not insurance, provides additional protection to the consumer and the lender on a transaction so their losses are minimized if there is a title company failure.  The biggest drawback to this is that the coverage can be waived by the consumer by signing a document at closing.  I believe that there are consumers that are waiving this coverage but not understanding all that they are giving up.

Dennis-Speaking of the new title insurance law, other than what you addressed in number 2 above, please describe how you think it has changed/impacted the industry as well as how it has impacted the consumer.  What are the positives?  Any negatives to it?

Wendy-I do think that there are positives and negatives to the new title insurance law.  On the positive side, it is now harder to get into the title business and continuing education is mandatory.  Another plus is that final policies of title insurance are to be issued within 45 days of the requirements being met on the commitment (which typically takes place at closing). Therefore, the consumer is getting the product that they pay for more quickly.  I also view the fact that an underwriter needs to communicate with the Department of Insurance the termination of an agent very significant. 

From the negative side, I think any time legislation is passed it is very confusing for those left to implement those changes in their day to day operations.  Also, there are additional forms and procedures that are now required- which creates additional costs to the title insurance industry – I believe that this will lead to higher prices for the consumer.

I’m going to stop here for today.  Tomorrow I will pick up from where I left off.

If you are considering buying or selling a home, or refinancing your mortgage and would like to talk with Wendy about title insurance, her contact info is below.

Wendy Cromer,
Vice President of Marketing
Security Title Insurance Agency, LLC
email: wcromer@securitytitlestl.com
website: www.securitytitlestl.com
phone: 314.402.6626
business address: 11884 Gravois Rd., St. Louis, MO 63127

Wendy Cromer, Security Title Insurance Agency LLC, St Louis, MO

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