Title Insurance Is A Scam. Help Is Coming. In 2009.

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We’ve wanted to weigh in on the title insurance scam for a while now, but Blown Mortgage beat us to the punch with this excellent piece that should make your blood boil, unless of course you are part of the title insurance game.

As Kenneth Harney pointed out here six weeks ago, a Congressional report concluded that title agents pocket up to 90% of your premiums, and the business is rife with scams, kickbacks, and inside deals that prevent competition and consumer choice.

What confuses us (and we are easily confused) is the behavior of California’s new insurance commissioner, Steve Poizner. On one hand, he says California home-buyers are paying ‘unnecessarily high rates’ for title insurance, and that in general the industry ‘is broken and I intend to fix it.’

OK. So why not order changes in industry behavior right now? Poizner’s new regulations take effect in 2009. And according to Inman.com, he delayed until 2011 implementation of the rate caps pushed by his predecessor, John Garamendi.

So if you buy a house between now and 2009, expect to pay ‘unnecessarily high rates’ for title insurance.

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