When you file a mortgage application with an out-of-state lender (including the big national banks), the lender typically orders title insurance through an out-of-state title insurance agency located in some place like Nebraska. And in some cases, the lender has an ownership interest in the title agency so it is making money off your loan and your title insurance. That’s why they push so hard for you to use the “in-house” company.

How the real estate closing works

The Nebraska title insurance agent doesn’t have a physical presence in Pennsylvania so how will it handle your real estate settlement? Quite simple – but it is going to cost you! It will find a nearby person who is a Notary Public. This Notary may have a printer in the trunk of his car or on top of his clothes dryer. When he receives the call to show up at your closing, he prints the mortgage documents containing all your personal financial information and shows up at your door. Why your door? Do you think it is because he is making it convenient for you? No, it is because he doesn’t have a local office. And guess what, the only way he is paid is by charging you a settlement fee anywhere from $150 -$350 to come to your home. This is how the Notary gets paid – you pay him – not the title agency that contracted with him. And unlike if you used someone local, the fee is not included in the title insurance premium you are paying. In most cases, he has very limited knowledge and expertise. He is not employed by the title agency.

Save yourself money

How can you save money? You simply select a local provider and attend settlement in their office during normal business hours and not pay a closing fee.

Avoid risk

And don’t forget, the Notary Signing Agents as they are sometimes referred to don’t own a community business, don’t have an office in the Commonwealth of Pennsylvania, and do not have a title insurance license. They are NOT employed by a local business owner or a large title insurance underwriter. They are simply independent contractors. But what they do have is your personal financial information including your Social Security Number, income, and birth date. And without a business office, who else in their home has access to your financial information? And what protocols do they have in place to keep the information safe?

A local title insurance agent

The local title insurance agent is part of your community, who pays local and state taxes, sponsors your child’s little league team, pays your neighbor’s salary, supports your local business, and he or she knows the local rules and regulations. He or she is the independent eye that you want for your real estate transaction. A licensed agent is required to attend continuing education courses. They interact daily with the court house, Recorder of Deeds, and the local real estate industry.

Help yourself and your community. No one can remove your right to choose a title insurance provider. Use a local independent (not affiliated with your lender or real estate agent), licensed title insurance provider who has the knowledge and expertise that will benefit you.

You may find it convenient to have someone come to your home with notary stamp in hand and a pile of papers for you to sign.  What you might not realize is:

1. You may be charged a significant settlement fee – sometimes costing you several hundred dollars.  While the fee is allowable in Pennsylvania under certain circumstances, the borrower must be informed of the cost in advance.
2. The “closer” may only be authorized to witness your signatures and not be able to describe or explain any of the documents.
3. The notary might not have sufficient liability insurance coverage – leaving you out in the cold if they make a mistake.
4. This person might not have any knowledge or experience in real estate closings – possibly causing errors or not noticing errors that may cause your appointment to be rescheduled.

While a number of individuals may identify themselves as “notary signing agents” or “certified signing agents” don’t be fooled – these are self-awarded titles and are not certified or recognized by any regulatory body.

Avoid the additional cost and increased risks of an at home closing by choosing a settlement service provider with local offices who offers closings using licensed title insurance agents.