‘Puter’s work background is, very broadly defined, in financial services. In ‘Puter’s job, he has the misfortune of dealing daily with people involved in the real estate industry. Top to bottom, the real estate industry has nothing to do with protecting buyers and sellers. Industry participants are only concerned with lining their pockets, clients be damned. ‘Puter’s loathing is industry wide. Buyers’ agents, sellers’ agents, title insurers, attorneys, banks and everyone else doesn’t care about the buyers and the seller. They just want to get paid. Yesterday. And God help you if you get between them and their commission/premium/fee.
So it was with great interest that ‘Puter spied in today’s Wall Street Journal this article concerning the title insurance industry abusing consumers.
Generally, lenders require a mortgagee title policy on all transactions, and the borrower/consumer has to pay for the required mortgagee policy. Many times, homeowners also purchase owners title policies. An owners policy insures that owners take the property free and clear of all liens, easements and restrictions. A mortgagee policy insures a specific lien position. That is, if lender assumes a first mortgage on a certain property, the title policy will, in effect, pay the lender its damages if there are prior liens.
Unsurprisingly to ‘Puter, states are finding that rates charged to consumers on title policies are unrelated to actual risks and costs. ‘Puter’s always said that title insurance should cost next to nothing, as it is not really insurance at all. That is, title insurance only insures against liens and easements of record: restrictions, mortgages and tax liens, etc. recorded in the county clerk’s office. Anything else is excluded from coverage. So, if the title company does its job properly (i.e., correctly reads the relevant records), there is no risk of having to pay out on any policy. All of the premiums charged (net of actual costs) should be profit. Unfortunately for the title companies, they sometimes screw up and have to pay out. But that’s beside the point.
‘Puter was saddened to see the article left out one of the biggest abuses of title companies: cheaper rates for simultaneously issued mortgagee policies. This is a sop to mortgage lenders, plain and simple.
Here’s how it works. Title company receives an order for an owner policy and a mortgagee policy on the same transaction. Seller agrees to pay the owner policy, and buyer pays the mortgagee policy. Most states permit radically different per $1,000 rates for owners policies and mortgagee policies, in favor of the mortgagee policy. In some states, insurers are permitted to charge a per $1,000 rate on an owners policy and a lower flat fee on a mortgagee policy. In ‘Puter’s experience in the approximately 40 states he’s done closings, the mortgagee policy is always significantly less expensive than the owners policy on a per $1,000 basis for the same conditions of coverage.
This discrepancy is a state sanctioned (rates must be approved by the state insurance commissioner) seller subsidization of mortgage lenders. Sellers are paying for the title work on which both the owners and mortgagee policies are issued; buyers/lenders contribute nothing. Mortgage lenders already are not paying for their mortgagee policies; buyers are paying. Now, sellers are subsidizing buyers specifically, and the mortgage industry generally, in the form of lowering costs.
It’s a relatively complex issue, but another example of industry capture of regulators. And, come to think of it, government indifference toward consumers.
Now back to Hello Kitty.
Always right, unless he isn’t, the infallible Ghettoputer F. X. Gormogons claims to be an in-law of the Volgi, although no one really believes this.
’Puter carefully follows economic and financial trends, legal affairs, and serves as the Gormogons’ financial and legal advisor. He successfully defended us against a lawsuit from a liquor distributor worth hundreds of thousands of dollars in unpaid deliveries of bootleg shandies.
The Geep has an IQ so high it is untestable and attempts to measure it have resulted in dangerously unstable results as well as injuries to researchers. Coincidentally, he publishes intelligence tests as a side gig.
His sarcasm is so highly developed it borders on the psychic, and he is often able to insult a person even before meeting them. ’Puter enjoys hunting small game with 000 slugs and punt guns, correcting homilies in real time at Mass, and undermining unions. ’Puter likes to wear a hockey mask and carry an axe into public campgrounds, where he bursts into people’s tents and screams. As you might expect, he has been shot several times but remains completely undeterred.
He assures us that his obsessive fawning over news stories involving women teachers sleeping with young students is not Freudian in any way, although he admits something similar once happened to him. Uniquely, ’Puter is unable to speak, read, or write Russian, but he is able to sing it fluently.
Geep joined the order in the mid-1980s. He arrived at the Castle door with dozens of steamer trunks and an inarticulate hissing creature of astonishingly low intelligence he calls “Sleestak.” Ghettoputer appears to make his wishes known to Sleestak, although no one is sure whether this is the result of complex sign language, expert body posture reading, or simply beating Sleestak with a rubber mallet.
‘Puter suggests the Czar suck it.