Florida's Insurance Commissioner Kevin McCarty announced Monday that the Office of Insurance Regulation has approved a new, cheaper product for title insurance that could help shave costs for homeowners doing a mortgage modification.
“This product is being offered at a time when innovative solutions from the insurance industry are needed to assist businesses and consumers,” said McCarty. “I appreciate the title insurance industry for taking the initiative on this effort.”
See the press release from the Office of Insurance Regulation below:
Office Announces a Reduced Cost Mortgage Title Insurance Product Available to Assist Lenders
TALLAHASSEE, Fla. – Florida Insurance Commissioner Kevin McCarty today announced the Florida Office of Insurance Regulation has approved several title insurers’ requests to offer an alternative title insurance product for loan modifications at a reduced cost to lenders. The new product is called a Mortgage Priority Guarantee policy and is used when lenders amend an existing mortgage loan agreement in order to help a struggling homeowner remain in their home and prevent a foreclosure of the property.
“This product is being offered at a time when innovative solutions from the insurance industry are needed to assist businesses and consumers,” said Florida’s Insurance Commissioner, Kevin M. McCarty. “I appreciate the title insurance industry for taking the initiative on this effort.”
Due to recent economic trends and record mortgage defaults, lenders are looking for ways to work with homeowners who may be experiencing difficulty in making their mortgage payments. A lender may do this by offering to modify the original mortgage loan agreement, which could include lowering the principal or interest on the loan, extending the loan payment period, or modifying the loan’s variable rates.
The lender can utilize the Mortgage Priority Guarantee policy to protect the mortgage lien’s priority at a minimal flat cost of $125, in lieu of the many hundreds of dollars otherwise required for a full lender’s title insurance policy. This can represent big savings for borrowers who amend their mortgages, because they are often required to pay the lender’s title insurance premium as part of the transaction.
To date, the Office has approved three companies to sell this form of insurance in Florida: Old Republic National Title Insurance Company (Minnesota), Westcor Land Title Insurance Company (California), and WFG National Title Insurance Company (South Carolina).
To review more information on title insurance, please visit the Office’s Title Insurance Page.