Why is attorney-controlled Title insurance tolerated in a free market society where in theory a consumer is able to shop & compare services in a competitive market?South Carolina: a State full...
Why is attorney-controlled Title insurance tolerated in a free market society where in theory a consumer is able to shop & compare services in a competitive market?
South Carolina: a State full of contradictions as they are always lobbying for less regulations, smaller government, etc., yet simultaneously limit consumer power & choices via various laws & regulations.
I practiced Law in South Carolina for twenty years, and was also a Title Insurance Agent. I am not sure why you see an issue with this, as attorneys act only as agents for the Title Insurance Company. There is no law or statute that requires you to purchase title insurance; but if there is a mortgage involved, the mortgage company will require title insurance as a condition of your obtaining the loan. By the same token, since we live in a competitive market economy as you point out, you certainly have the right to shop for Title Insurance elsewhere. However, the rates of Title Insurance Companies are largely the same; there is very little difference in the premiums charged. Also, any Title Insurance Company you choose will require that an attorney certify title to the Company and that you pay the cost of the certification; so there is no advantage to your shopping for Title Insurance, although you have every right to do so.
I should also point out that in South Carolina, attorneys act as closing agents for loans; in other states independent Title Companies close loans, but require certification from an attorney. The total cost is probably cheaper in South Carolina than in other areas.
So, by all means feel free to insist upon your own Title Insurance Agent, or no title insurance at all if you are paying cash and are willing to assume the risk. I doubt you will see any advantage other than the satisfaction of freedom of choice.
There's very limited competition in the very lucrative Title insurance market & lobbyists constantly prevent progressive changes. State of Iowa doesn't even have Title Insurance. Lawyer's receive undisclosed commissions from Title Insurance companies. This issue is so dubious that the Fed. Gov & HUD have attempted to protect consumers from overpaying & encourage comparative shopping via RESPA & GFE standardizations. Also, massive mortgage fraud is reported by the FBI, especially in this state. Statistics are facts. The system is out dated, not efficient, not transparent & I expect to see more outrage, protest & eventually some changes. Companies like "Entitle Direct" are leading the movement, but are still getting resistance. Many highly educated, professional Real Estate lawyers I spoke with so far haven't heard of Entitle or knew about Iowa - ignorance or not in their best financial interest to admit consumer friendly changes?