There is a growing trend for title companies to include additional fees for endorsements that the lender didn’t request, and the borrower didn’t ask for. Darrin Carey of Dayton Capital Partners explains this further in his
website blog.
Ideally, your lender should send the title company very detailed and specific requirements about what endorsements they require. Usually that includes a lender’s title insurance policy from a well rated company. Unless the lender requires it, there should be no additional insurance endorsements. If the borrower is getting an owner’s title insurance policy, it’s only an extra $100 (Ohio pricing) for the lender’s insurance.
Some common endorsements that may not be needed:
- OH ALTA Endorsement (Survey) – insurance in case survey was not done correctly.
- OH ALTA Endorsement (Environmental Protection Lien) – insurance against liens relating to EPA / environmental protection.
- OH ALTA Endorsement (Mineral Rights Restrictions) – insurance in case some owner in the past sold the mineral rights underneath the property.
Another fee (not an endorsement) that may not be needed is the Closing Protection Fee. This is a fee the title company charges as insurance that the the title company did their job correctly and completely.
Many title companies automatically add these charges to the HUD statement as additional closing costs. Most buyers don’t notice them. If you nor your lender require these fees or endorsements, you should contact the title company and ask them to be removed.
This is probably not a complete list. Have you ever noticed other unnecessary costs?