Title Insurance companies are licensed and regulated by each state the they are authorized to transact business in. In Illinois, that duty falls to the Department of Financial & Professional Regulation. On November 7, IDFPR announced the death of one of those companies, Guaranty Title & Trust Company.
Inquiries regarding the GTT liquidation and requests for Proofs of Claim forms should be directed to: The Office of the Ohio Insurance Liquidator, Attn: GTT, 50 W. Town Street, Third Floor, Suite 350, Columbus, OH 43215. The telephone for that office is (614) 487-9200.
SHOULD CONSUMERS TAKE ACTION? Well, that is going to depend on where you closed or who insures your title.
If your title insurance comes from Chicago Title, Ticor Title, First American, Stewart or LandAmerica, or Old Republic (which collectively control roughly 93% of the title insurance markets) you probably don't have any worries. Guaranty was not one of the "big five." Same goes for titles written by Attorneys Title Guaranty, Professional National Title, and as near as I can figure, Greater Illinois, Prairie, Mercury title too.
But if your title came from any other company, you might want to pull out that closing file and check to see if the title insurance underwriter was GTT. If so, pick up the phone and call your lawyer to get make sure you retain some insurance protection.
Thursday, November 20, 2008
Most Chicago area home closings take place at a title insurance company's office. Just setting foot into those offices these days tells you all you need to know about the current state of the Real Estate business: Still open, ready and willing to do business, but it's just not happening. Most are pretty lonely places right now.
The numbers seem to bear this out. According to the American Land Title Association and Inman News, All five of the nation's five biggest title insurers lost money during the third quarter.
Those grisly numbers:
- First American, the nation's largest, reported an $8.3 million third-quarter loss
- Fidelity, number two in 2007, lost $198 million and closed 115 title and escrow offices
- Stewart reported $30 million in losses, closed 40 branches, and canceled 1,750 independent agencies
- LandAmerica lost $599.6 million! which may explain its recent announcement that it was being acquired by Fidelity, and the urgent need for an immediate $30 million in secured credit to keep them liquid).
- Old Republic was $48 million in the red.
So what does this mean for consumers?
Well, on the down side, expect title insurance premiums and closing costs to go up. Fidelity for one is reportedly planning 10-20% price increases nationwide. Underwriting standards are going to be tightened down even tighter. Its going to get harder to "work-around" unresolved title issues. I would not be surprised to see more title companies close down and consolidate operations in their suburban and neighborhood offices. This process has already begun. Smaller title agencies are also likely to start shutting down operations as well.
On the bright side, its going to be pretty easy to schedule closings, and when you do get the deal to the table, everyone is going to be real happy to see you there .