Press Release (June 2017)
The New York State Department of Financial Services (“DFS”) has proposed regulations which, if enacted, will have a lasting devastating effect on the title insurance industry and impair the closing of real estate transactions. To read the proposed regulations (proposed 11 NYCRR 228; INSURANCE REGULATION 208) CLICK HERE.
The proposed regulations prohibit all title industry marketing expenses, limits and substantially reduces the amount we can charge for ancillary fees (such as municipal department searches, survey inspections and the like), prohibits gratuities and pick-up fees to Title Closers. The prohibition on marketing expenses specifically eliminates our ability to provide valuable items such as Continuing Legal Education Credits (“CLE’s”), journal advertisements and sponsorship of events, to name a few. Our CLE’s provide the opportunity to educate each other on important issues such as Wire Fraud and Cybersecurity, as well as keeping all abreast of important changes to laws that impact title and real estate practice. These proposed regulations prohibit us from promoting our businesses with even a ballpoint pen!
The DFS states “Consumers typically pay any invoice presented at the closing because they lack the sophistication to challenge the invoice, and fear risking a delay in the closing in order to obtain clarification.” However, the DFS fails to recognize that the consumer is protected by their attorney at the closing table. You, as the attorney, will not allow your client to pay unearned or excessive fees and you will provide clarification on any matters your client has a question or concern about.
We fear that if these regulations are enacted we will be forced to reduce staff and services to our clients. The DFS states the regulation will result in lower costs to the consumer – we disagree. The elimination of the closer pick up fee may result in greater cost to the consumer – the seller may be forced to pay the lender to attend the closing and accept the payoff and deliver a satisfaction – similar to a COOP closing. The fee paid to a lender representative will far exceed the cost paid to a title closer for a pick up. Gratuities have always been given at the discretion of the attorney and/or the insured, and should remain that way.
We are asking that you support the closing process and the title industry by simply clicking the ‘Take Action’ button below to review a suggested message which will be automatically sent to your legislators upon approval. It only takes a minute.
We believe the fees associated with our ancillary searches, such as Municipal Department Searches, Bankruptcy Searches, Recordings and Physical Inspections are fair and commensurate with the time involved in providing them. We often spend countless hours reviewing municipal department searches and other ancillary items. The fees we charge for these services allow us to employ experienced title professionals with the necessary expertise to handle complex situations. Additionally, it is imperative that we employ knowledgeable staff to navigate the complexities of County Clerk and other government offices to ensure that closing documents are recorded timely and accurately, avoiding interest and penalties imposed by New York State and other governmental agencies and negating the necessity for correction instruments in the future.
As you know, Title Closers play a very important role in the final stages of the closing process. Eliminating gratuities and pick-up fees may force many of them to leave the field entirely, leaving all of us with inexperienced title closers.
We are asking for your support and assistance. Please contact your local legislators and voice your concern about these proposed changes using the “Take Action” button located above. If enacted as currently written, we believe they will severely weaken the industry and damage the real estate market.