New York continues title insurance revolution

The state of New York is continuing in its push to revolutionize the title insurance industry.

After recently announcing a set of new “anti-inducement” regulations designed to reign in kickbacks and “other improper expenditures” in the title insurance industry, the New York state government approved new title insurance rates for mortgage refinancing transactions, which are expected to provide up to 65% savings for consumers.

Benjamin Lawksy, the superintendent of the New York Department of Financial Services, announced the changes Tuesday. In a release, Lawksy’s office said that the projected savings are a result of a series of reforms included in the state’s 2014-15 budget and broader regulatory actions by the NYDFS.

“These lower title insurance rates will provide real, significant savings to homeowners in New York,” Lawsky said. “We are pleased the title insurance industry is doing the right thing here and appreciate their cooperation with us to cut these rates. Moving forward, it is critical that we continue our efforts to clean up the title insurance industry and protect consumers.”

The NYDFS said that the specific savings will vary dependent on the term, size and duration of the loan, providing the following example for a $200,000 loan:

New York began revolutionizing the state’s title insurance industry last year, when it started requiring title insurance agents to register with the state, meet qualification standards and undergo regular training as part of the state’s new licensing process.

The recent crack down on title insurance kickbacks was the latest in the state’s push to overhaul the title insurance industry.

“New Yorkers should not have to foot the bill for outrageous or improper expenses made by title companies just to refinance or close on their home,” New York Gov. Andrew Cuomo said when the kickback changes were announced. “Our administration will not stand for that kind of abuse in the title insurance industry, and these new regulations will help ensure that New Yorkers are protected from unfair charges and get the most bang for their buck.”

Rafael Castellanos, the president of the New York State Land Title Association, said that the state’s title insurers operate with integrity.

“The New York State Land Title Association is committed to ensuring that those who work in the real estate finance community conduct themselves with integrity,” Castellanos said. “We also value the expertise and ability of licensed professionals in the title insurance industry to inform regulators of the consequences of well-intended reform efforts that unfortunately place small businesses in peril or drive business to predatory overseas companies.”