ALTA® Letter to Rick Lazio - RE: RESPA (3/28/00)

March 28, 2000

March 28, 2000

The Honorable Rick Lazio
Chairman, Banking Subcommittee on
Housing and Community Opportunity
U.S. House of Representatives
Washington, DC 20515

Dear Chairman Lazio,

I am writing to urge your support for consumer choice in title insurance and other settlement services if the Banking Committee takes up reform of the 1974 Real Estate Settlement Procedures Act (RESPA) and the 1968 Truth in Lending Act (TILA). Specifically, if a RESPA Section 8 (anti-kickback prohibition) exemption is proposed for bundling of closing costs, I am concerned such bundling may discourage consumers from doing the shopping necessary to obtain a high-quality title insurance product and competitive closing services.

Title insurance is a policy home loan borrowers purchase for both themselves and for their lender to protect both of their interests in the property. Because title insurance is purchased only once, during the mortgage loan closing, it is a product for which borrowers should spend time shopping among providers to ensure the purchase of a high quality policy. A Gallup poll showing that 50 percent of home loan borrowers shop for title insurance demonstrates the importance consumers hold for freedom of choice in title. Allowing settlement service providers such as lenders not only to package closing costs but also to pay referral fees without fear of Section 8 violations, could discourage consumer shopping for title insurance and lower the quality of the title insurance product. Thus it is important to maintain current law disclosures for title insurance and other settlement services to ensure effective consumer shopping and preserve quality.

I would be pleased to discuss this matter further with you. I appreciate your time and consideration on this matter.


Contact ALTA at 202-296-3671 or

North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.