Tag Archives: Lender

Title Insurance And Flying: It’s Not All Burritos And Love

Title Insurance & Flying: It’s Not All Burritos And Love

Walking From Money Requires a Walk!

Walking From Money Requires a Walk!

Walking from a multi million dollar deal isn’t easy when you’re paid on commission. But I did it today.

I’ll tell you why, then you tell me if you would’ve done the same.

Flying

Years ago I gave a few flying lessons to a student who seemed heavy on the confidence side. Unusually confident. Most students walking into a flight school for the first time are demure. This guy was cocky and demanding. Loudly he announced that he pretty much knew how to fly an airplane; he just needed a good instructor. By “good” he meant an instructor good enough to recognize his extraordinary talents and after maybe one or two flights would sign him off for a final FAA checkride.

When we got in the airplane I realized Mr. Confident had a perspective rich with fantasy. Someone had given him a few lessons but he had a long way to go before becoming a pilot.

When Mr. Confident  asked if he could buzz the school where his sister worked as a teacher, I became suspicious. Before 9-11 I would’ve been concerned about his judgment but post 9-11, as this was, I had several concerns. Is he just an idiot or could he be dangerous?

No Shoes No Service

You’ve seen the sign, No Shoes No Service? There should be a sign at flight schools, no common sense, no flying lessons!

I wasn’t making much in those days and I hated the idea of losing a student/client. On the other hand, I didn’t want to wake up to find CNN on my front lawn!

I talked with Mr. Confident over a delicious burrito lunch. Sometimes it’s best to interview students on the ground in a common environment.  They’ll open up and give you insight.  About half way through my burrito I determined he was surely an  idiot but not intentionally dangerous. In fact in my estimation I deemed him too stupid to be dangerous.

About a year later I got a call from the FBI. But first…

Title Insurance And $xMM

There’s a lot of energy around any high value Real Estate transaction. Emotions and ego’s can ratchet up as the stakes get higher. A multi million dollar deal can sometimes get exciting.

In this case the listing agent was yelling at me.

Not always but often I’ve noticed when voices get loud facts get soft.

Mr. Loud was trying to bully his way through the transaction, a common old-school tactic. But in today’s world there are checks and balances in place to protect the consumer. There’s no room for old school tactics.

I held my ground

Stepping back and assessing the situation, here’s what troubled me:

The seller was well past 80 years old and a much younger relative stepped in to handle his affairs.

Red flag #1.

Anytime a party to a transaction is elderly there is concern about potential elder abuse. There are laws to protect the elderly because, believe it or not, there are bad people who prey on them!

Next: The buying agent stopped communicating.

Red flag #2.

Why would an agent stop communicating days before closing? Why wouldn’t the selling agent issue a notice to perform?

Next: The selling agent said it was an all cash deal. Escrow said there was a lender.

Red flag #3.

Why is there a breakdown on the most basic components of a transaction days before closing?

Next: The Title Unit asked for a copy of the appraisal. Common on high value deals because a property value has to be established in order for Title to issue a policy. Simply put, the insurer needs to know for certain how much risk they are incurring.

The buyer had an appraisal done but in this transaction no one except the lender is talking to the buyer, not even the buyers agent!

Of course the lender has a copy of the appraisal but the lender can’t provide it to anyone without the buyers permission. But remember the buyers agent is MIA!

So: The request for the appraisal somehow goes to the sellers younger relative who refuses to provide it because, well, without having a Real Estate License, unilaterally decides providing a copy of the appraisal just isn’t necessary.

Red flag #4.

Who’s controlling this transaction anyway? And why can’t we see the appraisal?

Three Strikes Your Out. Four Strikes I’m Out

I decided there was too much rick in this transaction and when I stood firm with my request for the appraisal the seller’s agent threatened to pull the deal and take it to another Title company. I surprised him by agreeing.  I suggested he do just that.

Most Title Reps would sell-out before walking from a deal this big. In my less experienced days I would’ve done anything to keep this deal alive. But as you mature, you begin to see that shortcuts don’t necessarily bring  you to success. Doing the right thing – counts.

In a previous post, Seduce Your Wicked Imagination / Reduce The Risk I wrote: Insurance company’s are in the business of managing risk, not taking on risk.

The selling agent continued to yell. He told me he’d have the deal closed in two days with another Title company. I told him to do it.

Flying And Mr. Confident

A year after asking Mr. Confident to find another flight school,  I got a call from the FBI.  Mr. Confident was being investigated for suspicious activity consistent with possible terrorist planning. I’m not at liberty to give up the details but I can tell you this much. My statement to the FBI suggested that if Mr. Confident were doing the things they were investigating him for in order to impress girls in a bar I’d say they were on right on track. But knowing how utterly incompetent he is I figured he’s not much of a threat to anyone other than himself. I never heard from the FBI again so I’ll pretend they came to the same conclusion.

What Would You Have Done?

Pick your area of interest:

Real Estate or Flying

Tell me below in the comments section what you would have done. Would you have closed the Real Estate transaction in-spite of the red flags? Would you have continued to give Mr. Confident flying lessons?

 

Epilogue

Mr. Loud came back a few days later and asked to keep the deal open. He would provide the appraisal. After three weeks he did provide the appraisal and we closed the deal successfully with all boxes properly checked. I can only presume the other Title company asked for the same documentation.

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If A Butterfly Flaps Its Wings, Or, Zero Demand

Landing

One Degree Off Here Makes A Difference

When you pay-off a lien holder on your home make certain you record a reconveyance and save the zero demand! Let me explain.

Pop Culture loves the “butterfly effect”.  You’ve heard the catch phrase, “If a butterfly flaps it’s wings…” Edward Lorenz, an American mathematician and meteorologist pioneered the chaos theory. In simplest terms, in a deterministic nonlinear system, a very small change in one location can have a very large dramatic effect in another location. I’ll tell you why this is relevant in a moment.

One Degree Off Course

The cool air held our wings seemingly motionless even as we were being pulled through the failing light toward evening by the forgiving single engine Cessna 172 Superhawk. Twilight infiltrated the San Fernando Valley like a quite ghost, colors drained from objects on the ground making the trees, buildings, homes, and roads monochromatic in grays and black. I settled back in my seat and watched Dan (pseudonym) spin dials on the control panel.

Dan punched in locations on the GPS, set the heading bug on the HSI (Horizontal Situation Indicator) and promised Air Route Traffic Control that he’d fly directly to our next expected location.  Only I knew he wouldn’t. Dan was my student. I’m a CFII (Certified Flight Instructor). Oh I know Dan can fly to his next destination. I taught him well. But I also know he won’t fly a straight line. Flying a straight line takes more than a hundred or so hours of practice.

Here’s An Interesting Flying Fact

For every one degree you fly off course you’ll miss your intended destination by 92 feet per mile flown, or about one mile off course for every sixty miles flown.  For example, if you took off from LA and wanted to fly to New York, but flew one degree off, you’d be 40 miles off course before you reached the East Coast!

One degree doesn’t seem like much. But over time it can make a very big change in your life. How about a Real Estate example?

Zero Demand

I got a call from a home owner yesterday. She wants to refinance her home and take advantage of these historically low interest rates.  I reassured her with sincere enthusiasm, “Great idea!”  There’s just one problem. Cynthia (another pseudonym) explained she had borrowed money from a private lender more than 20 years ago.  She insists she never used the money and returned it to the lender. Loan paid in full. No problem, right?

Wrong.  Cynthia may have paid that loan in full but she never recorded a reconveyance some 20 years ago.  A simple one page form that lets the world know she paid her loan in full and no longer owes the debt.  The lender would have then issued a zero demand meaning, nothing else owed. Recording the recon, that one degree, a one page form, literally takes a minute to fill out and less than $20 to record with the County.

If A Butterfly Flaps It’s Wings

Or should I say, if only the butterfly had flapped it’s wings 20 years ago?  Today, Cynthia has a problem. The person who loaned her the money and recorded a lien on her home, back in the day, is now 20 years later; dead.  And there are no apparent survivors who can attest to Cynthia’s claim the money was returned.  Getting that streamlined refinance just got complicated. Cynthia could buy a bond to insure against any claims that she owes money– but who wants to do that? She has a few other options, there always are, but none of them as smooth as a butterfly’s wings. If only she hadn’t strayed that one degree off – 20 years ago.

Stay On Course

In your life, in your relationships, in your marriage, in your personal affairs and finances, isn’t it easier to stay on course than deal with the ramifications later?  Stay focused. Remember, one degree off course today may seem inconsequential but if the chaos theory is correct, and physics proves it is, one degree off course is going to change something big in your future.

Please feel free to leave comments. And Remember, Sharing is Caring. Thank you.

Note:  Besides being a Flight Instructor, I’m a Title Company Account Executive. In other words, I sell Title Insurance. Comments made here are my own and do not necessarily belong to my employer; Chicago Title & Escrow.

Chicago Title has been in business for more than 160 years. It’s a company you can trust.

For more information about Title Insurance contact me directly at:
Ric Lippincott or leave a comment below

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Stats Be Damned. The Fear of Flying & Real Estate

Adored When Needed For Immediate Rescue

I’m standing within arms reach of a fully equipped, reasonably self-sufficient, mostly educated, all faculties operable, grown man with a full-time job and a car, who is telling me he’s afraid of flying. I’m a Certified Flight Instructor. I get this a lot.  And I understand.

“You’ve got a better chance of being struck by lightning than of crashing in a jet. In fact, you’ve got a better chance of being struck twice by lightning than of going down with one of the big commercial operators.”  The Unfriendly Skies by Willie Stern, The Weekly Standard.

The stats be damned. Math isn’t a subject most of us grasped in school. How can we be expected to embrace it later in life?  Few of us have any trouble driving our cars yet nearly 33,000 people were killed in 2010, one of the best years on our nations roads according to the NHTSA, (National Highway Transportation and Safety Administration). There were no, none, zero airline fatalities in 2010. None. See USA Today Travel. Does knowing this chase away the fear of flying? Hell no.

Real Estate is scary too, until you’ve traversed it a few times and start to understand what makes it fly. I remember buying my first condo. I knew nothing. Didn’t understand a single thing. I was told to sign here, and here, and here… and the next thing I knew I was a homeowner. I blindly bought a home.

Most of the non-pilot population will do the same thing with flying. You’re told to get onboard, fasten your seatbelt, put your stuff under the seat or in the overhead bin and turn off your phone. The next thing you know you’re in Kansas!

In Real Estate transactions I try to explain what’s going on in the simplest terms. But sometimes what I have to say isn’t what the person wants to hear. That’s when ego’s step up and logic runs for cover. Besides flight Instructing, I’m in Title, so I get to work with all sides of a Real Estate transaction. Not just the buyers and sellers, but mostly the Realtors and Lenders.

Title guys like me are similar to lifeguards on the beach. We’re hated when we’re telling people they can’t swim because the water is too rough but adored when someone is drowning and needs immediate rescue.  An astute Realtor once told me, “I don’t even think about Title unless the $*** hits the fan. Then Title suddenly becomes the most important aspect of the Real Estate transaction.” Well said.

When teaching people to overcome their fear of flying I start by showing how and why airplanes fly. And, once we get in the air, I let students take the controls and actually fly the airplane themselves. We conclude with looking out the window and enjoying the perspective few people have the privilege of experiencing. If you’ve ever flown an airplane, even if for a few short minutes, you are one of the elite. Most people in the world will never have that story to share.

There hasn’t been a nicer time to buy Real Estate than right now. Home prices are low and money is cheap. If you need someone to walk  you through it, contact me. If I can’t walk you through to your goals, I have many experts in every area of Real Estate I can refer to you. See, “Does Your Realtor / Lender Know What You Drive“.  Once you’ve signed here, here and here, look out of the window in your new home and enjoy the view. You’re now part of the American Dream.

Flying airplanes, buying a home; scary at first. But once you understand the basics it’ll become second nature. It might even become enjoyable.

Please feel free to leave comments.  And Remember, Sharing is Caring.  Thank you.

Note: Besides being a CFII, MEI, Pilot, I’m a Title Rep.  In other words, I sell Title Insurance. Comments made here are my own and do not necessarily belong to my employer; Chicago Title & Escrow.

Chicago Title has been in business for more than 160 years. It’s a company you can trust.

For more information about Title Insurance or flying airplanes, contact me directly at ric.Lippincott@ctt.com.

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Seduce Your Wicked Imagination / Reduce The Risk

Learning to Fly Brings a Sense of Freedom

If you’re anything like me, when you walked out of the DMV with your first ever drivers license in hand, you could almost see those once inhibiting metaphoric corral fences getting sucked into the ground, pushed away, and the freedom to drive – anywhere – seduced your wicked imagination.

I could drive my car anywhere. Well, I wasn’t really unbridled, not just then. I still had limits. Parents. But the possibilities were rapidly solidifying from mirage to reality. I could now feel the wanderlust right under the surface of my skin.
 
When you first get your Private Pilots license that feeling of freedom jumps to a magnitude only birds and a flier can know. The once two-dimensional ground magically morphs into a magnificent world of 3D and you’re now pals with Peter Pan on your way toward earning a seat next to the likes of Chuck Yeager.  You even have a new vocabulary. The language of flying airplanes.
 
The distance you could travel in your car, lets say driving for one hour, suddenly doubled itself with a small airplane. Your territory, now larger, sparked dreams of weekends away. Further away. To places you wouldn’t have considered going for just a weekend trip.
 
Flying airplanes spawns those kinds of dreams. And in my years of flying I’ve brought many of those wonderings to life. From airplane camping in Northern Wisconsin to weekends on Catalina Island and aerobatics in-between, flying airplanes gets into your blood and becomes a habit you’ll never fully purge, as if you’d ever want to. But there are limits. Not parents (unless you’re under age) but a host of other overseers who are there to protect us from ourselves or passengers we may innocently enchant with our magic carpets.
 

It’s not always the FAA clipping our wings.

 
The FAA (Federal Aviation Administration) has volumes of restrictions, most are clearly in our best interests.  After the FAA I’d have to say Insurance Companies play a large role. For example, if you have a pilot’s license and a valid medical certificate the FAA says you’re qualified to fly to a destination like Big Bear City where the runway is fairly short and narrow, the winds are unpredictable, and the airport is surrounded by trees. However your insurance company is going to say, “Ah, excuse me. You need to go there with a CFI (Certified Flight Instructor) first before you can go off on your own.”
 

Why would your insurance company make that a requirement when the FAA doesn’t?

 
The insurance company is managing risk. If you crash they are the ones paying the bill. So they’d like an extra layer of assurance you’re up for the challenge before they’ll issue insuance (take the bet) you can do so safely. It’s hard to blame them really.
 

Title Insurance Like Aviation Insurance

 
Back to my recent flight to Big Bear in a second. First lets take a quick look at Title Insurance. When you get a mortgage to buy property the bank is going to require you to have Title Insurance. That’s because your lender knows how much risk there can be if the Title of your property isn’t free and clear.  And un unclear Title, or clouded title, happens all too often for Title Insurance companies to recklessly take that risk. But before a Title company will issue a policy, they are going to do a thorough search of the Title chain. Why? Once again, to mitigate risk. A lot of pre-flight happens before you get the policy.
 

Would You Take This Bet?

 
Lets say you’re going to refinance a million dollar loan. The Title Insurance policy will cost approximately $1,345.  It’s a one-time cost, good for as long as you own your property. If there’s a default and a claim is made, the Title company may have to pay a one million dollar liability when they only took in $1,345.  Not a good bet!  To cover that loss the Title company will have to sell 743, one million dollar policies that will never have claims, in order to cover that one loss!  That’s why Title companies do Preliminary Title Reports before issuing policies, and that’s why Aviation Insurance Companies require rated pilots to fly with experienced flight instructors to difficult airports before allowing pilots to fly there on their own.
 

Ready For Take-Off

 
Flying Into L35 (Big Bear) Can Be Challenging

Flying Into L35 Can Be Challenging

“Shuttle One fly the runway heading, climb to and maintain 9,500′, contact SoCal on 124.7 prior to entering class Charlie airspace, squak 7220.”  The pilot I was flying with read back the instructions and the reply over the radio was familiar.  “Shuttle One read-back is correct have a nice flight.”

Before getting into the cockpit I reviewed all aspects of the flight with the flying pilot. Weather conditions, runway lengths, aircraft weight and balance, fuel requirements, take-off distances, density altitude and the affects on aircraft performance, and so on. We were well prepared to make this flight and, like a Title Company, mitigated our risk with thorough investigation.
 
The retarding forces are at max when the airplane is lined up on the runway center line and the power leavers are pushed forward. The airplane is at its heaviest (it becomes lighter as you burn off fuel) and there is rolling resistance (the coefficient of friction for that particular runway) as well as aerodynamic drag (the wind resistance against the aircraft). As the airplane accelerates rolling resistance plays the biggest role at first, but diminishes as speed is increased until rolling resistance becomes zero at Vr (rotate speed) and the wheels leave the ground.
 
Once airborne I felt, I always feel, that rush of freedom entering my bloodstream like a drug administered intravenously.  The feeling crescendos as we, the airplane and me, leave the ground and climb above the silent scream of humanities internal dialogue, the constant voice, longing for flight.
 
Please feel free to leave comments below and remember, sharing is caring. Thank you.

Note: Besides being a CFII, MEI, Pilot, I’m a Title Rep.  In other words, I sell Title Insurance. Comments made here are my own and do not necessarily belong to my employer; Chicago Title & Escrow.

Chicago Title has been in business for more than 160 years. It’s a company you can trust.

For more information about Title Insurance or flying airplanes, contact me directly at: ric.lippincott@ctt.com

 
 
 
 
 
 
 

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The Reincarnation of Bonnie and Clyde (The Modern Day Bank Robber)

A Bank Robbers Hide-A-Way

In many ways The Reincarnation of Bonnie & Clyde is a tale of bank robbery.  Instead of walking into a bank wielding a gun, the modern day bank robber uses Real Estate.

Much like the romanticized movie version of Bonnie & Clyde’s true life crime spree, I’m leaving out details because this case is presently under investigation by the FBI. What’s more I simply don’t think like a larcenist; a prerequisite for understanding the nuances of the crime I’m about to share with you.

The somewhat slow and murky work day, now commuted to early evening, hadn’t done much to help me toward my personal goals. Business was dragging as it frequently does near holidays. Tired and just hungry enough to be skeptical, iPhone alerted me to an e-mail with the familiar ‘ding’.

The e-mail, from a Real Estate Agent, simply read, “I need a Prelim on these two properties.”

A Prelim, short for Preliminary Title Report, is an extensive search on a subject property, sometimes going back 30 or more years, to determine the rightful owner without so much as a drop of ambiguity. There can’t be any unexplained breaks in the Chain of Title, liens, judgments, etc. As long as there’s no discourse a Prelim is an offer from the Title Company to insure the property. The Prelim is often the most time-consuming and expensive cost to the Title Company which, if a policy is purchased, is rolled into the cost of that policy.  But if a policy isn’t purchased the now lame-duck Prelim is nothing short of a non recoupable elephant expense.

A request for two Prelims coming from one agent can be cause for joy but in this case (I know this particular agent doesn’t normally do that kind of business) it was cause for question. I asked Siri to call the agent and like a faithful secretary she dialed the number for me. After a few simple and friendly questions I took a deep breath and ordered the Prelims. Maybe the day had been worthwhile after all.

Not so fast there sizzle britches.

Within a few days the Real Estate Agent was asking me odd questions. And I had a few questions of my own. For one thing, why was there an opened order from another Title Company on one of the two properties I was asked to search?

It took awhile to understand what was going on.  In a nutshell one of the two properties had just sold but was up for sale again. The other property was up for sale too but not having been flipped.  Another odd occurence, why was the lender on the first property calling the original owners demanding payment?  None of this made sense.

The Real Estate Agent who ordered the Prelims kept telling me the bank who loaned money on the first property was calling the original owners, demanding payment, or the bank would foreclose. But wait. Everyone knows when you sell property all liens, loans, judgments, etc., must be paid off or cleared before the property can transfer to new ownership. So why would the “old” bank be asking for payment after the closing?

I asked the Real Estate Agent why they used a smaller off-beat Title company on the first sale.  Why didn’t they just call me in the first place? This agent always uses me and I was a little surprised to see I’d been left out of the first transaction. The Agent explained the Escrow company had demanded they use the smaller Title company. Red flag. Escrow can recommend but not demand the use of a specific Title Insurance company.

Exasperated I suggested the Realtor drive to Escrow and find out what was going on.

The next phone call I got from the Real Estate Agent was sobering. The Escrow Office was shut down. Closed. Gone. Packed up and moved out. History. See ya!

Here’s what happened.

Fake Escrow gets a license for two months, opens an office, takes in as many orders as possible, directs payoff funds from legitimate banks (the new lender) to a fake lien holders (the supposed old lender), grabs the money and books out-of-town.

The perfect bank job?

There are probably others involved in this scam. Like I said, I don’t think like a larcenist so I don’t know for sure. But here’s what I do know. This type of crime is ramping up. This isn’t the first case we as Title Company’s have seen like this. As the economy languishes, people grow desperate. And when people get desperate they are more willing to believe what sounds too good to be true.

Here’s my advice.

If you’re getting involved in a Real Estate transaction today make sure the people you’re working with have the expertise necessary to watch for traps. I’m not suggesting you can’t trust someone just getting into the business, we all had to start somewhere, but if they are new in the business make sure they have a reputable, well established company behind them. The Title Insurance company you choose is probably the most important decision you’ll make during a Real Estate transaction. (See, “Does Your Realtor or Lender Know What You Drive?”)

In a perfect world the original owners of the first property would get their home back, the old lien holder will get paid from the owners on the normal payment plan, the buyers will be reimbursed by the Title Company (That’s one of the 21 reasons for having Title Insurance), the Title Company has to pay another claim and the FBI gets the bad guys.  In a perfect world.

Beware of the modern day bank robber.  They aren’t in the bank with a gun anymore!

Please feel free to leave comments. Thank you.

Note: Besides being a CFII, MEI, Pilot, I’m a Title Rep.  In other words, I sell Title Insurance. Comments made here are my own and do not necessarily belong to my employer; Chicago Title & Escrow.

Chicago Title has been in business for more than 150 years. It’s a company you can trust.

For more information about Title Insurance or flying airplanes, contact me directly at ric.Lippincott@ctt.com.

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Does your Realtor or Lender Know What You Drive?

Popular assumption: There are only three reasons a man drives an expensive car. (1) Small tallywhacker, (2) Big Ego, or (3) Midlife crisis. But popular assumptions aren’t true all the time.

I buy the nicest certified preowned cars I can afford, not because I have an oversize ego or under sized something else. I buy nice cars because I don’t want car problems. Period. I want the car to start, go, never need maintenance, and never fail me. I don’t want to wait for tow trucks. I don’t want to haggle with mechanics while they experiment on my car. I don’t want these things because I value my time. Time I spend worrying about my car is time I’m not able to work or be with my family. Simple.

I Don't Want To Be Broken Down Guy

Lets Talk Title Insurance and Cars for a moment.

When you buy a house, or refinance the house you own, you’re going to need Title Insurance. The lender will require it. So here’s the question. Do you want good Title Insurance or cheap Title Insurance? The answer is, you probably haven’t thought about it.

In California it’s customary for Listing Agents to pick your Title Insurance. In the case of a refi it’s your lender who decides. You pay for it. They pick it.  Do they know what you’d pick – if you were to pick? (By the way, you can pick your Title Insurance but most people don’t.)

For my fancy preowned cars I buy insurance from a large reputable insurance company. I do this because I’ve had experience with cheaper companies. I’ve spent hours on hold, trying to get a call back, filling out forms, waiting for appraisals, and finding out things I thought were covered really weren’t. Since I value my time I’d rather pay a little more for my car insurance knowing that if something happens, it’s handled. No fuss. No mess. No hassle. No broken down guy.

How does my Real Estate Agent or Lender Choose My Title Insurance?

Ask them. I have. And here are some of the answers I’ve heard:

My office requires me to use our own in-house company (This is very common)
The Rep is really cute (I swear I’ve heard this)
The Rep is a friend of mine from High School
They are cheaper
(From a lender) When we do those no cost refi’s I have to use the cheap guys otherwise I have to pay the cost and I’m not doing that!

Another untruth:

All Title Companies are the same. No, they aren’t. While most Title Companies offer the same type of coverage, sorta like Car Insurance companies, Title Insurance companies aren’t the same and neither are car insurance companies.

Let’s go back to premium cars. I pay extra for a premium car because I value my time and I don’t want to be the broken down guy. Same for Car Insurance. I go with reputable companies because I hate getting the runaround, sitting on hold, finding out what I thought was covered really isn’t and never getting callbacks.
Title Insurance companies are just like every other business. Some companies are in business for years, others come and go. Chicago Title, for example, has been in business for almost 200 years! Many others like United Title, Investors, Micro General, Pacific Title, American Title and National Title were flashes in the pan.

Quick- why do so many Title Companies go under?

Well, it’s easy math. If they are trying to gather market share with pricing and don’t charge enough for their product, they won’t have enough in reserve to pay claims.

What happens if my Title Insurance company goes down?

In most cases a larger Title company will buy the underwriting like in the case of Lawyers Title. When Lawyers went BK,  FNF, (Fidelity National Financial) the parent company that owns Chicago Title, bought the underwriting from Lawyers Title for pennies on the dollar.

So what’s the problem?

Your time and stress level. If your Title company fails you will most likely still be insured. But good luck finding someone to help you with the claim! Your first call will go to, “I’m sorry, you’ve reached a number that is no longer in service.”

Another untruth.

Title companies never pay claims. Oh really? Last year Chicago Title paid $500MM in claims. That’s a half a billion dollars!

Just the other day a lender at a large bank told me he’s only had one claim in eight years, so he’s using the cheaper on-line Title Company for his customers. Does he really know that to be true? Some homeowners will I guess call their Lender if a Title dispute pops up. But I think more people would contact their insurance company instead. In the case of my friend the Lender his customers may be suffering with claims he’s unaware of.

The full circle.

People who buy premium cars don’t often skimp on their cars or their car insurance. Your house is your largest expenditure. Bigger than a car. If you can afford the house do you really want go cheap on the Insurance that insures you as the rightful owner? Is your Realtor or Lender really doing you a favor by making you the broken down guy?

At the end of the day you might save a few hundred dollars on a cheaper Title Insurance policy. But I’m willing to bet if you ever have a claim you’d trade that two hundred bucks in a heart beat for a reputable Title Insurance Company who will be there to defend you.

Please feel free to leave comments. Thank you.

Note: Besides being a CFII, MEI, Pilot, I’m a Title Rep.  In other words, I sell Title Insurance. Comments made here are my own and do not necessarily belong to my employer; Chicago Title & Escrow.

Chicago Title has been in business for more than 160 years. It’s a company you can trust.

For more information about Title Insurance or flying airplanes, contact me directly at ric.Lippincott@ctt.com.

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