July 13, 2011
Ms. Elizabeth Warren
Assistant to the President and
Special Advisor to the Treasury Secretary
U.S. Department of the Treasury
1500 Pennsylvania Ave., N.W.
Washington, D.C. 20220
Dear Ms. Warren,
I am writing on behalf of the Texas Land Title Association (TLTA). TLTA is a statewide trade
association representing the Texas title insurance industry. Our primary membership consists of
licensed title insurance agents and title insurance underwriting companies that facilitate the safe
and efficient transfer of real estate. We were founded in 1908 and currently serve over 13,000
professionals in Texas.
Title insurance rates in Texas, under Texas State Law, are set by the Insurance Commissioner
through a hearing with input from the public. You should also be aware that in Texas the
promulgated title rate is an all-inclusive premium, meaning that it includes the charges for title
search, title examination, and “closing the transaction” on behalf of the underwriter.
We understand that you are working hard and moving quickly to complete a new Truth and
Lending/ RESPA disclosure form that will be more understandable for consumers and
We wanted to provide our thoughts on a few key issues.
First, in your latest release, we prefer the Redbud form. We believe it provides for greater and
more detailed disclosure of loan and title fees and that this is in the best interest of the consumer.
Second, we think any form should be flexible and expandable. Real estate closings take place in
thousands of jurisdictions across the U.S. and there will inevitably be a need to modify the
descriptions of fees, including, adding and deleting to meet geographic differences – expanding
and contracting the number of lines in each section. Anticipating this now will reduce burdens on
the industry in the future that otherwise may have to struggle with an inflexible document.
Third, we believe that all title charges, including “owner’s title” should be reported in the same
category under subheading “E. Title Services.” Importantly, with respect to owner’s title, we
think the words “not required” will prejudice the new homeowner against purchasing owners
title insurance to protect themselves. As you know, lenders title insurance will protect only the
lender in a title dispute and not the consumer. Without owners’ title insurance, the new
homeowner will be left with no insurance to cover title claims. As a consumer protection bureau,
we hope you will be uniquely sensitive to this perspective.
Fourth, in the subpart “B. Taxes and Other Government Fees” we would suggest a separate line
for recording fees, rather than assuming a consumer will understand that the “fees” in this
category are for recording the legal documents. This is particularly important in Texas, because
there are no other taxes or governmental fees in connection with transfer of interests in real
estate. In other jurisdictions throughout the U.S., it is common to have a “per page” “recording
fee” in addition to transfer taxes imposed by various governmental entities.
Finally, we would urge you to begin work on a Settlement Statement (or Final Disclosure) for
use at the closing table (currently the HUD-1 and HUD-1A). This is ultimately the document that
a consumer will receive when they close on their home. In order to implement your new proposal
and meet your goal of assisting a consumer to understand the transaction, this will need to be
closely aligned with the new TILA/RESPA disclosure. Please be mindful, however, of the need
for a sufficient transition period for any new Settlement Statement (HUD-1). In a time of
retrenchment in real estate activity and pricing, our industry just underwent significant change at
great expense with a new HUD-1 last year.
Thank you for your consideration of these views.