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.
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.