Our Secret Formula
Jack Guttentag, Consumer Advocate, The Mortgage Professor (www.mtgprofessor.com)
What did Jack mean by his comment? Jack was referring to something known as "reverse competition". An expert from the Consumer Federation of America explains the meaning of "reverse competition" in the paragraph below:
"Reverse competition refers to a market structure in which the seller of a product markets the product to an intermediary instead of to the ultimate purchaser of the product. In the case of title insurance, title insurers market their products to real estate professionals - real estate agents, mortgage lenders, mortgage brokers, homebuilders - who because of their position in the real estate transaction, are able to steer the consumer who is actually paying for the product to a particular title agent or title insurer. The ultimate consumer has little or no market power in the title insurance transaction because title insurance is required for obtaining the loan or purchasing the property and because the consumer, who infrequently purchases real estate, has relatively little knowledge of title insurance."
J. Robert Hunter
Insurance Director of the Consumer Federation of America before the House Committee on Financial Services Subcommittee on Housing and Community Opportunity
April 26, 2006
At ENTITLE DIRECT, we researched the conclusions of these experts and many others to develop our secret formula and debunk the myth that title insurance rates are fixed by law. Simply put - we are a title insurance company. As such, we have established our own premium rates in adherence with state requirements across the country, but at significant savings to consumers.
In most instances, consumers buy their title insurance policy from a title agent who receives a commission from the title insurance company. This commission varies by state but is typically 65% to 90% of the premium paid.
Title agents add legitimate value to the supply chain by providing the customer to the insurance company. However, title insurance companies "compete" for business by offering higher commission rates and other perks to title agents. This drives up the cost of title insurance to the ultimate purchaser: you, the consumer. The title insurance supply chain is neither widely known nor publicized. Title agents often manifest themselves as professionals related to the real estate transaction. It is not uncommon for consumers to find out who their title agent is at the closing table when there is little choice but to move forward with the transaction.
ENTITLE DIRECT is different. As the direct issuing division of EnTitle Insurance Company, we do not issue policies through commission-based agents. As a result ENTITLE DIRECT is able to pass significant savings along to our customers. EnTitle Insurance Company has filed 35% lower premium rates with state insurance departments across the United States. These lower title insurance rates are your savings.
We encourage you to compare our rates with any company servicing your area. Please remember that EnTitle Insurance Company policies are the same industry-standard policies adopted by the American Land Title Association (ALTA).