Title searches are paid outside of closing, they just aren't required to be itemized on the settlement statement because they are considered to be "primary title services."  POC does not mean "paid before closing," it merely means that the payment is not being charged to the borrower at the closing.  Many POC fees are fees that are picked up by the lender - such as the Yield Spread Premium, paid to the broker by the lender.

I do not necessarily agree that "unless the searcher has been black listed a title company would be able to accept it."  As an agent, I would not rely on just any search - if I am issuing a policy based on the accuracy of the search, I want to be sure that I know who did the search and they they are well qualified and competent. 

However, I disagree with RESPA rules regarding the itemization of the search fee.  I think it would be a good idea to show the parties what the cost of the search is when it is contracted out to a third party.  If not actually paying the abstractor with a separate charge on the settlement statement, a POC item that discloses the charge would be good idea, in my opinion.  That does not mean that the searcher would be paid any sooner, but at least it would inform the borrower of how much was charged for the search.

Actually including a separate charge on the settlement statement to pay the abstractor has its problems too.  If the deal never closes - how does the abstractor get paid.  If you want the title companies to charge the actual price of a search, they would not be able to collect enough on the ones that do close to pay the abstractor for the ones that do not.

Best,
Robert A. Franco
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