A lawsuit has been filed and is seeking class action status against the title insurance company for allegedly charging consumers higher fees on home refinancings than allowed by Idaho law. The lawsuit was filed in US District Court and claims First American Title has reaped enormous financial gains by bending the law and charging consumers as much as 25 percent more than state law allows for title insurance on the refinance of a home. It also alleges that since the mid-1990s, the title insurance industry has ignored the explicit legal limitations on their premium fees, and has knowingly overcharged untold individual homeowners by hundreds of dollars.
Title insurance companies are required to file a schedule of rates with each state's department of insurance. The rates set out basic fees for title insurance on multiparty transactions; they also include discounted rates for refinancing homes. In Idaho, the refinancing rate is 25 percent below the basic rate. Record-low interest rates in recent years have encouraged US homeowners to refinance their homes.
