The Other Side of New Mexico Title Insurance

A number of title insurance and real estate bloggers had publicly fretted over the apparent disservice being done to the consumers of New Mexico when Title Insurance reform wasn’t placed on the legislative calendar.  I refrained from jumping in largely because I know little about the system of title insurance in NM, and couldn’t comment on the facts.  I was troubled that the reporting I had reviewed appeared to be one sided and very light on statistical evidence, but I didn’t have any evidence to refute it.  It appears the issue may not be so cut and dry as others would have you believe.

Now the other side of the story is being presented, though apparently not getting much media attention.  In a letter to the editor in Alamogordo Daily News, a Title Insurance Professional points out some of the popular facts appear to have been misrepresented:

The press and several individuals in New Mexico have also stated that title insurance rates in New Mexico are the nations highest and are excessive based on information provided by Bankrate.com. The New Mexico Land Title Association received a letter dated Jan. 10, 2008, from the managing editor of Bankrate.com, stating the Bankrate.com study examined closing costs only, not title insurance costs. Bankrate.com’s study did not rank states by the cost of title insurance, but clearly by a “mortgage fee study by obtaining six to nine good faith estimates in each state from the Web site of online lenders.”

Bankrate.com stated in its letter “it is apparent from the articles received that there exists a number of misunderstandings and misconceptions about the nature and results of our study.”

It also appears some facts may have been overlooked in the frenzy to pillory the Title Insurance Industry:

A study required by the Legislature and commissioned by the Public Regulation Commission was conducted by UNM. Its report, dated Nov. 19, 2007, found that “the cost of title insurance in New Mexico appears to be significantly lower than neighboring states for similar transactions, particularly Texas and Utah.”

The Title Insurance Industry does have problems, but its not the monster that consumer groups and some industry professionals would have you believe.