How can I check to ensure that where I’m closing has a valid title insurance agents license from the Ohio Department of Insurance (ODI)?
You can either call the ODI at (614) 644-2665 or by clicking here to check the ODI’s website to look up an agents licensing credentials.
Does my title agent need E&O Insurance?
Pursuant to Section 3953.23 of the Ohio Revised Code, title insurance agents or agencies that handle escrows in real property transactions are to maintain E&O insurance, and/or a surety bond. The required limits of liability for E&O insurance or the bond is to be determined by the Ohio Department of Insurance.
Furthermore, the ODI promulgated Rule 3901-7-02 requires the following, as of February 12, 2007:
All title insurance agents or agencies handling escrows in real property transactions not involving the issuance of title insurance must have a surety bond protecting all parties to a transaction against theft, fraud or other failures in properly disbursing funds. The bond must provide a minimum of $150,000 of coverage.
All title insurance agents or agencies must maintain E&O insurance with a minimum coverage amount of $250,000.
All subcontractors of a title agent or agency must be covered by E&O insurance in the amount of at least $50,000.
Furthermore, it is a good idea to obtain a copy of the agents E&O insurance prior to your closing.
The title agent is trying to sell me Closing Protection Coverage. What is it?
Effective January 1, 2007
Pursuant to Section 3953.32 of the Ohio Revised Code, effective January 1, 2007, every real estate closing involving real property in Ohio in which title insurance is to be issued, the title insurance company or title insurance agent must offer closing protection coverage to the lender, buyer/borrower, and seller in the form of a Closing Protection Letter mandated by the Ohio Department of Insurance.
If the lender chooses to elect Closing Protection Coverage, a premium of $40.00 payable to the insurance underwriter will appear on the settlement statement. If the borrower also elects coverage, the charge will be $60.00 ($40.00 for lender’s coverage and $20.00 for borrower’s coverage). If a Seller chooses coverage their charge will be $55.00. The coverage is limited to the specific transaction and is described on the Notice of Availability, an excerpt of which follows:
Description of Coverage: The Closing Protection Coverage indemnifies you against the loss of settlement funds resulting from any of the following acts of the Licensed Agent or anyone acting on behalf of the Licensed Agent, subject to certain conditions and exclusions specified in the Closing Protection Coverage Form:
1) Theft, misappropriation, fraud, or any other failure to properly disburse settlement, closing or escrow funds; and 2) Failure to comply with any applicable written closing instructions, when agreed to by the Licensed Agent.
All parties to the transaction must complete the Notice of Availability and Offer of Closing Protection Coverage. The documents must be signed by the lender and returned to the title agent prior to the issuance of a Closing Protection Letter and prior to closing. These documents are transaction specific, and should be sent to you when title work is started. Click the following for a example copy of the Notice of Availability and Offer of Closing Protection Coverage.
Furthermore, it is a good idea to obtain a copy of the Closing Protection Letter prior to your closing.
Should I be represented by legal counsel?
It is strongly recommended that all parties to a contract be represented by legal counsel. All legal questions involving the contract should be directed to your personal real estate attorney.
I feel like I have been involved in insurance fraud, who do I contact?
Since OAITA is an association, and not a regulatory institution, we cannot provide legal counsel or recommend a particular course of action; however, we are able to provide information that might be useful to you in deciding how to handle your particular situation. However, consumers who witness instances of insurance fraud should contact the Ohio Department of Insurance Fraud Hotline at 800-686-1527. The hotline can be used to report fraud by consumers, agents, and agencies.
If I suspect someone is violating RESPA, who do I contact?
We encourage anyone who suspects someone is potentially violating RESPA to contact them directly at 1-202-708-0502 or you may send your complaint to:
Director, Office of RESPA and Interstate Land Sales, US Department of Housing and Urban Development, Room 9154, 451 7th Street, SW, Washington, DC 20410.