Real Estate News

Title insurance proposal would tighten regulations in New York

Published: 06 May 2017

Because much of the details of title insurance vary from state to state, even those that aren't affected by a particular bill might want to watch for new ones. The state of New York now has some possible proposals in the wings which would help it address possible corruption within the title insurance industry.

In a pair of plans, both currently under consideration, the state government put forth amendments around subjects such as how title insurance professionals charge applicants or inducements for prospective business.

A big part of one of these proposals included numerous provisions regarding the way expenses are reported and allocated. Several circumstances would be added to affect when an agent could complete an "ancillary or discretionary" fee, enhancing the amount of checks in place. It could also target possible relationships between real estate and title insurance professionals.

New York Gov. Andrew Cuomo explained the hopeful impact of these measures in a Department of Financial Services statement.

"These new protections will help ensure New Yorkers aren't forced to shoulder outrageous and exorbitant expenses while pursuing the American Dream of home ownership," he said. "The industry-wide practices uncovered by Department of Financial Services were nothing short of shocking, and these reforms will help ensure perspective homeowners will be charged their fair share of title insurance fees and not a penny more."

The Wall Street Journal said that the American Land Title Association has yet to comment on this officially. However, on April 4 the organization spoke out against possible wire fraud actions which could hurt consumers financially.

To this end, it urged the Consumer Financial Protection Bureau to inform buyers about this threat. Based off of this, it's probable the organization could support any move that would ultimately be in the consumer's interest.