Saving on Title Company Charges

Aside from title insurance premiums and mortgage recording taxes, title/abstract companies charge various fees related to their services. The fees are broken down into 2 categories: production fees and recording fees. Today, I will discuss the production fees.

As an aside, "title companies" are direct insurers such as First American or Old Republic. "abstract companies" are agents of the insurers. Because the premiums are regulated, you are paying the same rates regardless of who you use and so I will refer to them both as title companies. Also, for purposes of this discussion, I will assume that the borrower does not have a lawyer. I always recommend a lawyer as most of the issues to be discussed should be dealt with by your lawyer but I understand that lawyers cost money and many people do not want to spend the money on a refinance. When buying a home, you should definitely have a lawyer.

Production fees are costs associated with the underwriting process of the insurance policy. This includes researching the property and its history with the County Clerk and other agencies and which is presented to you in the form of a title report (legally known as a title commitment). The fees for a title report are not regulated and every title company charges slightly different fees. My rule of thumb is that unless there are extenuating circumstances (such as multiple owners or unusual searches requested), the title report should not cost more than $350.00-$400.00 all in. Some companies charge outrageous fees for production and mark up the fees for bankruptcy searches and patriot searches and other junk fees on top of the fee for the title report which will substantially increase the cost of the title report. This is a tell tale sign that you are probably paying too much. If you are paying more than $400.00 for the title report, ask the title company to cut the cost.

Hint 1: If you see a fee for overnight delivery or Fedex or courier, demand to know what was sent, where and how. Some companies have a standard fee for this on their invoice even if they do not send anything by courier.

When you are at a closing and you go over the title company invoice, if you think it is too high you must say something. At the very least get an explanation of each and every fee. When refinancing, most people do not use a lawyer. This is an instance where a lawyer would come in handy as he would be able to review the bill and make sure you are not being overcharged (of course, the lawyer would have to get paid for this).

During the past few years, prior to the real estate implosion, new abstract companies sprouted up every day and many are now out of business, especially the less reputable companies. I have seen many of these companies come and go and have been shocked at the prices I have seen them charge their customers for production fees. Many of these companies are still out there so be careful.

Hint 2: Ask to see the title company invoice prior to closing so that you are not caught off guard at closing. This way you can discuss the fees with the title company without the added stress of being at a closing table.

Citibank CEMA

In response to a prior comment, Citibank's fax number to order a New York CEMA is currently 866-620-7227. They require the new bank's name and address as well as a contact person (usually borrower's attorney or new lender's attorney) in order to process the request.