Fidelity National Title set to Acquire LandAmerica Title

How will this impact home buyers and home sellers? The immediate impact will be in the lending industry. Several banks have refused to approve home loans for funding with LandAmerica Title policies. If your home is currently in escrow and LandAmerica (Lawyers Title) is the title insurance company, you better check with the bank making the loan for your transaction to see if they will accept a LandAmerica policy.

This merger will create the largest title insurer in the country. The largest is not always the best. Think of any insurance policy you have, whether for your car, home or life. Those types of policies have a loss payout ratio. Think of the ratio of car insurance policies to accident claims against those policies. Now think about a Title insurance policy and how often home owners make claims against their title insurance policy. I bet you know people directly that have made a claim against a car insurance policy, but how many people do you know that have needed to make a claim on a title insurance policy?

On its most basic principle your Title Insurance Policy insures that the chain of title (the ownership from each owner to owner) is legal and accurate. The polices can cover encroachments and other property related issues, but when you really look long and hard the loss ratio for a title insurance company on these policies; that loss ratio is extremely low.

If you are asking why a home seller would need this knowledge, the answer is that your real estate agent will suggest which company to use and the fees are different. My main point of contention is, that if you can significantly save money on a policy then the relationship your Real estate agent has with any particular title insurance company is something to pay attention to. If you are a seller, your buyer pays for a lender’s title insurance policy and the buyer and the seller deserve the best most competitive rate from a competent title insurance company.

One last note. It is against the law for insurance companies to match the rate of their competitors, so if this is a suggestion from a real estate agent that values the relationship with their title insurance rep more than their relationship with you (the buyer or seller) it might be time to find a new real estate agent.

In Simi Valley there are several title companies that have been very active in this area over many years, unfortunately lawyers was one of those companies. First American and Fidelity are two others. Chicago Title and Ticor are under the Fidelity umbrella. This is very important for home sellers, when the real estate agent is in your home giving you the estimated cost sheet to sell your home, ask to see a quote on the Title Policy from two or three of the companies so you know you are getting the best rate.