There is something greatly wrong here and I have never been able to get my mind around it properly. If I do a search for a $1Million closing - say a loan - and I miss a prior open mortgage for $100k. The closing occurs; a claim is filed and ultimately I am called upon to "pay off" the old mortgage (whether by filing a claim against E&O or whatever).
I received $150.00 for the search
The Title Company receives $3,500.00
The Underwriter receives $2,100.00
What the hell is fair about this? In order for the Title Company to receive their portion of the title insurance premium they must perform certain "core services". When they buy a search from me - they are doing just that; purchasing a search in order to aid them in determining insurablility (part of the core services) whether I spell it out for them or not.
I am very careful not to state "Title is held by...or.. title is vested in', and equally cautious when pointing out items to be corrected to insure - I just note defects as "problems" and let the title company "examine".
If I hire a painter and he screws up the color I don't sue him for the cost of the house - maybe his fees and my trouble - but nothing else.
I think we all too easily accept the financial responsibilty of errors - they happen. They should ultimately be paid by those selling the insurance (and collecting the big bucks)!
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