Wednesday, June 23, 2010

"Sun" Shines Light On Sticky-Fingered Title Insurance, Real Estate Escrow/Settlement Agents Victimizing Homeowners

In Baltimore, Maryland, The Baltimore Sun reports:
  • It's the lesser-known side of the mortgage disaster. As lenders foisted billions of dollars in mortgage debt on unqualified borrowers buying overpriced houses, too often there was a sticky-fingered settlement agent standing nearby. Since the beginning of 2008, the Maryland Insurance Administration has revoked the licenses of or imposed penalties on more than three dozen title and real-estate settlement companies, [...].

  • In 2009 alone, the agency fielded about a dozen complaints concerning misappropriation of funds by title agents, estimates Darlene Arnold, assistant chief enforcement officer for the administration. Complaints of all kinds about title-insurance companies ballooned from 90 in 2005 to more than 600 last year, according to the agency. It had to double the number of agents investigating title complaints to four. If reform of Wall Street is a priority in Washington, stopping the homeowner heartache from title-insurance scams ought to be near the top of the list for Annapolis.


  • Government knows it has a problem. In a recently concluded report, the Commission to Study Title Insurance in Maryland, appointed by the legislature two years ago, wants the insurance commissioner to study setting up a guaranty fund to pay back future victims. It also suggests making title-insurance underwriters more responsible for the behavior of agents [...] who represent them at the closing table. Those are decent ideas. But the report lacks a sense of urgency and outrage over the mounting rip-offs. It seems far too easy to obtain a title-insurance agent's license in Maryland; there are more than 400 agencies.

For more, see Lax oversight enables title-insurance crooks.