RESPA changes-consumers to shop title insurance costs and sign more paper!

BrokerIPTV: Today, we are talking with John Clikeman, managing partner of AfBA Meridian Title and Escrow and John, welcome to the show; thanks for being with us.

John Clikeman: Thank you.

BrokerIPTV: You know in a previous segment, we ended talking a little bit about a lot of RESPA issues, a lot of disclosure information, wanting the consumer to know more, wanting the consumer to go out and investigate things for themselves and of course this morning I read an article in Inman talking about HUD and HUD is making a real push to get consumers to shop for loans and Title Insurance. Will that work John?

John Clikeman: Well, I think it is a lofty goal at this point. I think it is important that the consumers actually realize that there are big differences in cost, not only on the loan side, but on the title insurance side. I think what HUD and RESPA is all about is making sure a consumer at least comprehends that there is available many different types of rates out there and they should be educated about those to make, I guess you would call it, an informed decision.

BrokerIPTV: You stick a GFE, a Good Faith Estimate, in front of somebody, it is two pages; apparently, it is going to go to three pages. I think the purpose of that was to make it simpler, but I am not sure that going to three pages actually accomplishes that. I mean do you find that most people kind of have that glazed over look in their face?

John Clikeman: I would say so. [Inaudible] I don't think that there are that many people who are in real estate, standard residential real estate transaction that totally comprehend it. I think most people if you are a seller, what do you want? You want your property sold, you want your proceeds, and you want to go on buy another house. As a buyer, you want to get the deal done, you want to get your loan closed, and move on. So, there is a problem there. I mean... I think they are trying to address it. I am not sure what they have done so far is solving what they are trying to do. It might be even complicating it [Voice Cross Over] more.

BrokerIPTV: Yeah. Coming in 2009 another change is that they are trying, at least in the real estate contract, to let people know that title insurance is just not the sole discretion of the seller anymore, that they buyer can purchase their own title insurance, they should be encouraged to check out title insurance and various rates and so forth; your thoughts on that.

John Clikeman: Well, again, I think that is a good goal. I think what you are going to see, the evolution of that, would be offers are going to be made by buyers, where it will actually be specified in the contract, which title company they want to use. So, it becomes a contractual issue and the assumption there would be that the buyer again has actually gone out and done his or her homework and done his shopping and selected a title company that is more attractive to the buyer from the rate structure. So, it is... the offer is made with the title company designated. That is not the way it used to be in Colorado. It used to be where the seller pretty much controlled that.

BrokerIPTV: Well, if the seller is paying for the title insurance, do you find that most buyers really care?

John Clikeman: Traditionally, honestly, no.

BrokerIPTV: Okay.

John Clikeman: I mean title insurance is a pretty generic thing. I mean you don't get different product by going to a different title company. You might get different service, you might get different rates, but the product as such is standardized. It is all the same stuff, so...

BrokerIPTV: And until recently we had some title companies that just ended up closing their doors prior to transactions closing, which was even more important that you picked a stable title insurance company.

John Clikeman: That is correct.

BrokerIPTV: John, thanks so much; really appreciate you being here.

John Clikeman: Thank you.

Posted on November 30, 2008 18:36:54 by Blog Author