Required Title Insurance Disclosures

Question:

We are associated with Metro bankers for Title Insurance. The new required disclosure we received has me confused because the first disclosure says: "The lender may not condition an extention of credit, or any subsequent renewal thereof on either: (1) My purchase of an insurance product from the lender or any of it's affiliates;or (2)My agreement not to obtain, or a prohibition on my obtaining, an insurance product from an unaffiliated entity: (3) as long as the coverage provided is acceptable to the lender. I'm unclear because we require title insurance on all real estate loans. The disclosure does not say we require the insurance. Can you tell me if I'm missing either the meaning of the disclosure or is there something else we should be saying.

Answer:

From your post it appears you require title insurance, but do not require that it be purchased from your institution or an affiliate, nor do you limit the parties from whom the borrower may purchase insurance. The notice need not indicate that insurance is required.

First published on BankersOnline.com 11/5/01