Home Buying in Berkeley>Question Details

Ben, Home Buyer in Berkeley, CA

Buyers and Lender's Title Insurance

Asked by Ben, Berkeley, CA Mon Dec 3, 2012

I received my HUD statement from the title company a day before going into sign paperwork for closing.

The title company is charging me $799 for lender's title insurance and $2,044 for buyer's title insurance. I told the title officer that i did not want the buyer's title insurance because i'm not required by law to take it. He then informed me that it would raise the price of the required lender's to over $1600. This seems completely ridiculous and like I'm being scammed since Buyer's title insurance is such a high profit center for these title guys and i'm sure he doesn't want to lose it.

My question is, is this legal? Can I tell him that he has to honor the $799 price for lenders title insurance that he quoted all along? Thanks.

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Answers

4
By the way...the title insurance rates and terms are governed by the Insuance Commissioner.

http://www.insurance.ca.gov/

Definitely not a scam and worth the cost.
The coverage on this, one time fee, is worth whatever you pay for it. Should a lien show up that had not been cleared prior to your ownership, this policy will do the work and cover the costs of clearing it for you.
0 votes Thank Flag Link Tue Dec 4, 2012
@Ron Thomas:

In Alameda County, buyer typically pays all title and escrow fees.
0 votes Thank Flag Link Tue Dec 4, 2012
In California, the Seler "normally" pays for the OWNER'S TITLE POLICY and half of the ESCROW FEE.
The Buyer pays for the LENDER'S TITLE POLICY and half of the ESCROW.

If there was some agreement that changed this, we would not be aware of it; if you agreed to pay more, how would we know.

It has been my experience that a HUD1 is given to the Buyer weeks before Closing for their perusal.

You are going to have to discuss this with your Realtor and the Title Company:
None of this is set-in-stone.
0 votes Thank Flag Link Tue Dec 4, 2012
ALTA Lender’s title insurance is always packaged concurrently with the Buyer’s title insurance – if you buy them as a package it costs less. Like any other insurance policy.

If you don’t want Buyer’s title insurance (and I can’t imagine why not – ESPECIALLY in Berkeley), then you no longer get the concurrent rate for the Lender’s policy and you have to pay full price for the Lender’s Insurance. Standard policy. Standard rates. No scamming involved. No extra effort to work their profit center. Not ridiculous. And they are not worried about losing it, either. It’s totally legal, totally right, totally normal AND, if you don’t sign off on it, the bank won’t fund your loan.

Totally simple. Totally standard. Totally legal.

And it’s not a matter of him giving you the concurrent rate because he quoted it – it was quoted concurrently. Take away the concurrent Buyer’s insurance and his hands are tied – he couldn’t charge you less even if he wanted to. Rates and policies are governed by the state.
0 votes Thank Flag Link Mon Dec 3, 2012
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