Title Insurance Exposed! An Open Letter to the Title Insurance Industry
In its upcoming issue, Forbes publishes an exposé on the title insurance industry's outlandish margins that seem so obvious to anyone associated with real estate. It's an "On The Cover" story and the first impact article I've seen about the industry from a major business magazine.
I've been making waves about the title insurance industry for the past couple of years so I don't need to comment on the article, it's an aggregation of these various well known facts and news items - the industry has unbelievable 5% payout ratios, kickbacks/gifting do happen, record profitability is almost analogous to the oil companies' last quarter earnings.
Instead, I'll propose what title insurance companies should do next in this open letter to them (pardon the length of the article, you may want to print it out):
Dear Title Insurance Companies:
In California, you've been under pressure from Insurance Commissioner John Garamendi to lower your rates that have been escalating proportionately with our booming housing market over the past five years. He's threatened legislative action to lower the rates, but it's possible you'll get a reprieve from the next insurance commissioner to be elected next week here.
With graphs (c/o of the Forbes article ) like the above educating the consumer, some sort of rethinking is going to happen. Parker Kennedy, CEO of First American Title , reveals as much with this quote from the Forbes article:
"Today anyone can instantly learn a property's square footage, its sales price history, even view satellite photos, at virtually no cost. If records are instantly accessible and accurate, the need for title insurance will fade away. "Eventually insurance won't be an important component of the product," he (Kennedy) allows."
Yes!! that said... read more