Causes Of Title Company Problems

Added October 1, 2004 by Ilyce R. Glink

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Summary: A former title insurance processor comments on the causes of title insurance problems and gives a bit of advice that may help you with your title problems. While some of the problems are with the title companies themselves, many filter down from the mortgage companies. The biggest piece of advice from someone in the industry is to remain polite. A good attitude will help your deal much more than getting angry.

Several weeks ago, I ran a letter from a real estate agent who has been having difficulties with her title company. The letter writer was frustrated with the number of mistakes being made, including HUD-1 statements being delivered late and riddled with errors, property taxes not credited correctly, and good faith estimates being off by hundreds or thousands of dollars. I suggested that the real estate "gold rush" of the past few years has seen thousands of newcomers flock to the field. The letter has generated a number of thoughtful responses. Here is one of them.

Q: I wanted to respond to the letter from the broker who has trouble with local title companies and lenders. This was a problem when I left the industry two years ago to raise my daughter and I am sure it is getting worse. I was the title insurance processor and sometimes loan package processor with an attorney in South Carolina, where only attorneys may close loans.

While some of the problems are with the title companies themselves, many filter down from the mortgage companies.

We often did not get closing instructions until hours before a closing so we could not complete the HUD-1 any sooner. Often, mortgage companies located out-of-state wanted us to put things on the HUD-1 in a way that was illegal in our state. They wanted revisions and changes and would not wire the money or give the "okay" to disburse without these, but would not get back to us once the changes were made.

Once I even had a lender question the client's right to have scheduled his closing for that day. Many times, the real estate agents would agree to a closing date on a schedule the lender would not or could not meet.

As far as not returning phone calls, more than once I had to say to a real estate agent that if they wanted the HUD-1 then they had to get off the phone and let me work. It is impossible to process the paper work correctly while trying to return calls from two agents, a buyer and a seller.

Multiply that by the number of closings being prepared! Also, our hands we often tied because the lenders were not returning our calls.

As for problems with property taxes, the county in which I live can be several months behind in posting tax payments. I often questioned how the county was able to get away with it, but they did. When this happened, we had to collect the taxes again, although sometimes if the client had a receipt the lender would accept it.

I could go on forever with examples, but none of us have that much time. One other bit of advice I would give brokers in this position: Try to remain polite and use your "honey." Most of the people doing the work are paralegals, and they are doing the best they can with what they have to work with.

But rude clients (including those who say "Joe Closer would have done it") get put on the bottom of the pile every time.

A: Thanks for your insight.

Published: Oct 1, 2004

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