4 ms·

You really haven’t added anything. You’ve just restated that people that own the mortgage want title insurance to protect them. It isn’t for the home owners p

You really haven’t added anything. You’ve just restated that people that own the mortgage want title insurance to protect them. It isn’t for the home owners protection. It’s the same with PMI. That’s another insurance the lender requires a buyer to purchase to protect them. Title insurance is relatively cheap compared to home or auto insurance. It’s a one time purchase cheaper than the 6 month premium of either of the others.

nrb 3y ago
> You really haven’t added anything. Are you intentionally glossing over that it could/should cost less than 1 month of premiums of either of the other types of insurance?
- frumper 3y ago
  They aren't saying it's priced a little too high, they're saying it's a scam. Compared to those other insurances, it's very cheap. Over a 30 year mortgage you'll pay tens of thousands of dollars in home owners insurance. For title insurance you'll pay a few hundred dollars for the average house. For my house, which is close enough to the national average, it was about 2 months worth of home owners premiums.
pxx 3y ago
Title insurance is part of a weird subsidy that is US-unique. The fact that it's part of a weird subsidy means the terms are subject to politics. Fannie/Freddie can easily self-insure against title risk but the political winds are against it, though maybe recent developments will allow them to finally do this [0]. I don't think you've quite understood the idea of looking at loss ratio. On the aggregate, title insurance is incredibly expensive compared to home or auto insurance. These bits of friction add up over an entire market, especially in states where title insurance is fixed by regulation at an extraordinarily high price. The weirdest thing I've found about title insurance is that people who have purchased it come out of the woodwork to try to convince themselves they weren't scammed. It's not just title insurance salesmen astroturfing; people honestly just never want to admit they were scammed and will somehow fight tooth and nail against cold hard mathematical facts. On that note, I can also offer you rapture insurance for $10/lifetime! That's cheaper than even a day of your homeowner's insurance and it's a one time purchase! By your logic, this insurance is therefore a good deal and totally not a scam! [0] https://subscriber.politicopro.com/article/2023/03/fannie-moves-to-revamp-title-insurance-despite-gop-warnings-of-risk-00085030?source=email https://subscriber.politicopro.com/article/2023/03/fannie-mo...

nrb 3y ago

> You really haven’t added anything. Are you intentionally glossing over that it could/should cost less than 1 month of premiums of either of the other types of insurance?

frumper 3y ago
They aren't saying it's priced a little too high, they're saying it's a scam. Compared to those other insurances, it's very cheap. Over a 30 year mortgage you'll pay tens of thousands of dollars in home owners insurance. For title insurance you'll pay a few hundred dollars for the average house. For my house, which is close enough to the national average, it was about 2 months worth of home owners premiums.

pxx 3y ago

Title insurance is part of a weird subsidy that is US-unique. The fact that it's part of a weird subsidy means the terms are subject to politics. Fannie/Freddie can easily self-insure against title risk but the political winds are against it, though maybe recent developments will allow them to finally do this [0]. I don't think you've quite understood the idea of looking at loss ratio. On the aggregate, title insurance is incredibly expensive compared to home or auto insurance. These bits of friction add up over an entire market, especially in states where title insurance is fixed by regulation at an extraordinarily high price. The weirdest thing I've found about title insurance is that people who have purchased it come out of the woodwork to try to convince themselves they weren't scammed. It's not just title insurance salesmen astroturfing; people honestly just never want to admit they were scammed and will somehow fight tooth and nail against cold hard mathematical facts. On that note, I can also offer you rapture insurance for $10/lifetime! That's cheaper than even a day of your homeowner's insurance and it's a one time purchase! By your logic, this insurance is therefore a good deal and totally not a scam! [0] https://subscriber.politicopro.com/article/2023/03/fannie-moves-to-revamp-title-insurance-despite-gop-warnings-of-risk-00085030?source=email https://subscriber.politicopro.com/article/2023/03/fannie-mo...