Posted by Art_MD on 1/5/06 8:01am
Msg #86186

Indiana Title Insurance License - added exposure

I do not know the details of the new requirements in Indiana, but, from experience with the way things work in MD, which requires licensing, you might want to consider the following.

(I will explain how MD works and it might apply)

1. To do a closing where XYZ title is the title insurance underwriter, we have to be appointed by XYZ as an "associate" and a letter has to be sent by XYZ to the state insuance board. So, at the table you represent the title underwriter - a principle in the loan transaction.
2. As an associate, we are still on our own regarding liability for errors.
3. If there is a title problem and it goes to court, we could be named as a party to the action since we "produced" the insurance policy when we conducted the closing (as a rep of XYZ).
4. I take care to give a short explaination of title insurance and the difference between lender and owner policies.
5. The state has, in standard unclear government language, alluded that we are doing "settlement work". It is unclear enough that we could be brought into any lawsuit that arises from the closing paperwork.
6. #5 is very scary. If you really want to CYA, do you explain every document in detail? Remember you are a party to the transaction in your role as the rep of the title insurance underwriter. Do you have the obligation/right to explain all the docs?
7. If you explain all the docs to CYA, are you practicing law? My opinion, is you are not. You are a rep of a party to the transaction. Explaining an agreement between 2 parties (one of whom you represent) is not, in my opinion UPL.
8. How detailed in the explaination do you go in order to CYA.

I think I've rambled enough. This is food for thought.

Art
8.

Reply by Janlee_MI on 1/5/06 8:48am
Msg #86194

Art,

Being a Closing Agent, I was to explain docs. Now has a Signing Agent I am not. Closing is the same, which makes it very diffcult when someone ask questions. I want to answer in detail but cant. Feel stupid saying lets call Lender. Who normally have never seen the documents. Normally they have a closing department that handles on the docs and they don't know why the documents are used. Closing Agents have to go thru lots of training to give details.

Frustrating sometimes.

Reply by Art_MD on 1/5/06 9:07am
Msg #86203

What I was trying to say, is that as the Title Insurance Producer, your exposure is much greater and you have to do more to CYA.

Art

Reply by Traci/MD on 1/5/06 9:41am
Msg #86222

What are the requirements ? Do they require the 100k bond & EO. The class time is less. My suggestion is start shopping for bond insurance before you take the class or test. I received so many phone calls from notaries who spent money on the class and took the test. They could not get a surety bond.

Reply by Sherri_IN on 1/5/06 2:34pm
Msg #86308

At this time there are no special bond or E&O requirements. I can see this coming in the future.

It is required that that you take a 2 day pre-license course (no test at the end of the course). The problem that some people have is the course is only being offered by ILTA and not always at a location that is convient to them. I have heard that they are making a video of the course so that it will be available online. Not sure how that is going to work.