Or do you? By tradition and by ethical standards attorneys are charged with exercising their independent professional judgment in the representation of their clients. Virtually all attorneys take this charge to heart and are diligent in maintaining their practice to the highest ethical precepts. Real property attorneys face far more pressure in representing their clients than ever before.
Time parameters are dramatically shortened as the document load is reciprocally increased. The complexity of the law and corresponding regulations demands greater knowledge and closer scrutinization of all transactions. At the same time there is a material lack of understanding as to the closing attorney’s responsibilities in getting the transaction completed which in turn, fuels pressure from some lenders and real estate agents to inappropriately reduce fees.
At the same time, some of these participants in the closing process are getting into the title business. Many demand that you use their agency. They do not ask for business, they demand it. They do not try to earn business, they demand it. They do not concern themselves with conflict of interest issues as long as their interests are served. It is unlikely that some of these do more than pay lip service to the rules that require full disclosure to the consumer.
Most consumers do not know what title insurance is, and this lack of knowledge imposes greater responsibility upon the attorney than in other aspects of the closing that the consumer is more familiar with. This also calls into question the legitimacy of the title insurance selection forms presented during the application process. Did the consumers know and understand what they signed? More importantly, was the consumer under the impression that signing would facilitate approval of the loan? Consumers have the right to re-select the title insurance company. Included in this newsletter is a title insurance re-selection form.
We, in fairness, acknowledge that some of these agencies do strive to compete, hire competent staff, expend significant sums soliciting business and restrain from exerting pressure on consumers and attorneys. We believe that they would agree with our concerns.
There are some whose shrill and repeated demands to use their agencies carry with them an implicit, and sometimes explicit, threat to direct business away from the resisting attorney. It may take days instead of minutes to get a commitment. It may take repeated corrections to get a simple commitment or policy back properly. Full premiums may be charged when reissue rates are clearly applicable. Do they have adequate support for the attorney? As long as the lender is protected there will likely be little interest in looking after the interests of the consumer or lawyer when a claim arises. Unfortunately, some attorneys succumb to this pressure.
In the exercise of an attorney’s independent professional judgment, use of the lender or Realtor’s agency may not always be in the client’s best interest. The client should be advised and permitted to make an informed decision. It is not easy, but the attorney should resist pressure to conform to the lender’s wishes in such cases. Failure to do so does little to counter the arguments of those who would eliminate attorneys from the closing process.