California’s Insurance Commissioner John Garamendi has had enough with the title and escrow industry. He views the California system as dysfunctional and spotted with illegal kickbacks, gratuities and questionable partnerships all designed to squeeze consumers. Multi-million dollar penalty and fines don’t seem to change their practices so he’s decided to hit them where it hurts and lower escrow and title fees.
According to a recent Realty Times article, Garamendi wants to:
Set “interim maximum rates” based on each company’s rates in 2000, before the sharp rise in home prices. This would result in an immediate 23 percent reduction in title insurance rates for a home purchase, a 16 percent reduction in the cost of title policies for refinancing, and a 27 percent decrease in the cost of escrow services provided through escrow companies controlled by title insurers.
Beginning in 2008, require that companies report to the insurance department comprehensive data showing their costs and operations to help the commissioner better determine reasonable cost-based rates for title insurance.
Needless to say, the title and escrow industry vow to vehemently fight these measures calling them unfair and “draconian”. A public hearing on the new rules is scheduled for August 30.
This entry was posted
on Monday, July 24th, 2006 at 2:00 pm and is filed under News.
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