The American Land Title Association (ALTA), the national trade association of the land title insurance industry, released the following statement today from Chief Executive Officer Michelle Korsmo in response to Consumer Financial Protection Bureau (CFPB) Director Richard Cordray’s speech at the Brookings Institution:
“ALTA and its members support Director Cordray’s efforts to help consumers gain greater control and understanding of their real estate transaction, however, we remain concerned with the Bureau’s new Closing Disclosure, which goes into effect Aug. 1, 2015, and replaces the current HUD-1 Settlement Statement. The Closing Disclosure misleads consumers about the actual price of their title insurance policies,” said Michelle Korsmo, ALTA’s chief executive officer. “We urge the CFPB to take swift action to ensure consumers receive the most accurate information about their mortgage costs, including title insurance premiums and settlement services.”
“Unfortunately, the current Know Before You Owe forms will create confusion at the closing table for many consumers. In nearly half of the country, title companies are required by state law to charge title insurance premiums and discounts in a manner different than the Bureau would have them disclose those fees to the consumer. The Bureau must take steps to disclose accurate costs of title insurance premiums and settlement services to meet their goal of educating consumers of the true costs of owning a home.”
“Title and settlement agents will have to provide additional disclosure forms to consumers at closing to show the actual title insurance premiums charged and to prove compliance with state law governing industry-filed rates. We support a cleaner real estate transaction but not at the expense of consumers understanding of their actual mortgage costs.”
“We agree with Director Cordray that an educated consumer is a more confident and empowered consumer. Our economy can speed up its recovery if we provide more stability, growth and affordability in the mortgage market. We will continue to work with the CFPB and our industry partners toward commonsense solutions that decrease consumer uncertainty and bring demand back into housing market.”
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About ALTA
The American Land Title Association, founded in 1907, is the national trade association representing more than 5,400 title insurance companies, title and settlement agents, independent abstracters, title searchers, and real estate attorneys. With offices throughout the United States, ALTA members conduct title searches, examinations, closings, and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.
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