Chicago, ILIf you've refinanced your mortgage sometime over the last few years it is very possible that you paid more for title insurance than you should have. Homeowners that refinance an existing mortgage are entitled to a discount on their premium. But that is not always what happened. According to attorney Paul Weiss, from the Chicago firm of Freed & Weiss, some homeowners paid title insurance companies as much as 50 percent more than they had to by law. "Nobody knows about these discounts other than the folks in the industry and apparently they weren't being forthcoming with their customers," says Weiss.
The discounts vary from state to state, but the main principle applies everywhere. The problem is many homeowners didn't even know enough to ask.
When people began approaching Freed & Weiss with suspicions that they had been overcharged, Paul Weiss says he found it hard to believe such a thing could happen. However, after Weiss began investigating the case he changed his mind. "We did a lot of investigation and found out for the most part, across the board, all the big title insurance carriers simply didn't give discounts whatsoever," he says.
"They don't tell homeowners, 'by the way, your premium should be $200, $300 or $600 less than what we are charging you'." he adds. "It is really a widespread practice."
The Defendants
Weiss's firm is currently investigating or prosecuting class action suits against some of the country's biggest title insurance companies including Transnation, First American Title, Fidelity and Lawyer's Title, Chicago Title, Stewart Title, Commonwealth Title and Ticor Title for allegedly charging excessive premiums.
"Their response is 'sorry, our agents didn't do it or we made a mistake', but when you go into the records you find that thousands and thousands of people had the same problem," says Weiss.
Poor Record Keeping
According to information in the lawsuits filed by Freed & Weiss, title insurance companies repeatedly overcharged homeowners anywhere from 10 to 50 percent. "Title insurance companies file all their rates with the state and they are required to charge that rate," says Weiss.
After looking at mountains of documents from the title insurance companies, Weiss's observation is that many of the companies practiced poor record keeping. "One of the problems is that the records are so bad that it is almost impossible to tell how much they have overcharged people. We have clients who have been overcharged anywhere from $300 to $600," he says.
Bad record keeping, however, is not a defense for taking more money than they should have from homeowners. Weiss is blunt about troubles in the title insurance business. "I think that income stream was just like printing money. I think they weren't too interested in regulating their business," he says. "I think they just put all the rules to the side."
If you've refinanced over the last few years and believe you were overcharged,
Weiss's office is interested in hearing from you. Although the firm has gathered more than enough plaintiffs, Weiss says they are always interested in hearing from people who will add more ammo to the cases the firm is pursuing.
Paul Weiss attended Indiana University for both his undergraduate and law degrees. He graduated with Distinction from the School of Business (1989) and obtained a Juris Doctorate from the School of Law (1993), graduating magna cum laude.