04.15.08
RESPA - Pick your Battles
I am distressed when I hear RESPA in reference to knit-picking minor issues, and even more so when they turn to Law Suits. Point in case:
In Idaho, three Boise title companies each paid a $150 fine last year for providing gift certificates that were used as door prizes during a showcase of homes, according to orders by the Department of Insurance. They were found in violation of a 2007 rule issued by the department to address “an accumulation of past and present abuses that had previously gone unreported.”
Should items such as door prizes, presumably going to any random person who happens to attend the showcase of homes, really a RESPA violation. I mean, is that really an inducement to do business with a title company? To me is seems more like a good will gesture. Now, I don’t know if only one title company gave the door prize, and I don’t know how many builders were in the showcase, but really, don’t we have better things to worry about?
Mr. Eborall, an Idaho Land Title Association board member and an executive with Alliance Title & Escrow Corp. in Boise, makes comments in the article above are correct. The comparison to other forms of insurance is not fair. Property insurance is paid annually. Title Insurance is only paid ONCE and protects the lender for the life of the loan and owners for so long as they own, and even after they sell, if they give a Warranty deed to their buyer.
Title Insurance is a difficult business. It requires lots of skill and knowledge, and a significant cost for the research of public records. The one-time charges are generally quite reasonable for such a potentially large loss - the price of a home. Yes, there are some real issues for RESPA to protect the consumer, but please, let’s pick the battles.
Greg Knowles said,
April 15, 2008 at 3:26 pm
I agree, there are many rules out there that are too vague or don’t seem reasonable when it comes to marketing expenses. California is in for a big change probably by year end. It should be interesting.