Closing Protection Coverage
Effective January 1, 2007

Pursuant to Section 3953.32 of the Ohio Revised Code, effective January 1, 2007, every real estate closing involving real property in Ohio in which title insurance is to be issued, the title insurance company or title insurance agent must offer closing protection coverage to the lender, buyer/borrower, and seller in the form of a Closing Protection Letter mandated by the Ohio Department of Insurance.

If the lender chooses to elect Closing Protection Coverage, a premium of $35.00 payable to the insurance underwriter will appear on the settlement statement. If the borrower also elects coverage, the charge will be $50.00 ($35.00 for lender's coverage and $15.00 for borrower's coverage). If a Seller chooses coverage their charge will be $50.00. The coverage is limited to the specific transaction and is described on the Notice of Availability, an excerpt of which follows:

Description of Coverage: The Closing Protection Coverage indemnifies you against the loss of settlement funds resulting from any of the following acts of the Licensed Agent or anyone acting on behalf of the Licensed Agent, subject to certain conditions and exclusions specified in the Closing Protection Coverage Form:

1) Theft, misappropriation, fraud, or any other failure to properly disburse settlement, closing or escrow funds; and 2) Failure to comply with any applicable written closing instructions, when agreed to by the Licensed Agent.

All parties to the transaction must complete the Notice of Availability and Offer of Closing Protection Coverage. The documents must be signed by the lender and returned to the title agent prior to the issuance of a Closing Protection Letter and prior to closing. These documents are transaction specific, and will be sent to you when title work is started. Click the following for a copy of the Notice of Availability and Offer of Closing Protection Coverage and an example Closing Protection Coverage.

Fraud News

If you believe that you have been a victim of predatory lending by a mortgage broker or lender, you might find the Mortgage Bankers Association website helpful.

Also, if you believe that you have been a victim of mortgage fraud and are looking for contact information for the FBI or other authorities in your area, this information is available at the Mortgage Bankers Association's Mortgage Fraud Against Lenders Resource Center.

Consumers who witness instances of insurance fraud should contact the Ohio Department of Insurance Fraud Hotline at 1-800-686-1527. The hotline can be used to report fraud by consumers, agents, and agencies.

More Consumer Information:

• Mortgage Fraud Blog - Central clearinghouse for information on recent mortgage fraud schemes, indictments and prevention
• Mortgage Fraud Resource Center
• Ohio - Mortgage Broker License Lookup
• Ohio - Mortgage Broker Enforcement Lookup
• Ohio Department of Insurance Agent/Agency Lookup

• ALTA's Consumer Initiative
• Home Loan Learning Center
• MORTGAGENewsDaily

• Ohio Association of Independent Title Agents
• Consumer Advocates in American Real Estate (CAARE)
• Independent Real Estate Settlement Professionals Association (IRESPA)

NEWS & ARTICLES

• Regulators cracking down on title kick back Schemes (11/29/07)
• Do affiliated business arrangements violate fiduciary duty laws? 05/22/06
• GAO: Title Insurance - Preliminary Views and Issues for Further Study - Testimony - 04/26/06
• GAO: Title Insurance - Preliminary Views and Issues for Further Study - Report - April 2006
• GAO: Title Insurance - Actions Needed to Improve Oversight of the Title Industry and Better Protect Consumers 04/2007
• GAO: Text Summary

• October Research Corp.: Ohio Sham AfBA hunt continues

• ABC News: Save Thousands on Closing Cost - 03/09/2006
• ABC News: Buying a House? Beware the Junk Fees - 03/09/2006
• ABC News: How to Avoid Junk Fees When Buying a House - 03/09/2006

• Money Magazine: Congressman calls for title-insurance investigation - 02/24/2006
• Money Magazine: Beat closing fees - 02/15/2006
• Money Magazine: Closing cost scams - 02/14/2006
• Money Magazine: One street's story - 02/14/2006
• Money Magazine: The bunk behind junk closing fees - 02/14/2006
• Money Magazine: Title inflation - 02/14/2006
• Money Magazine: Simple solutions to fee bloat - 02/14/2006

• HUD SETTLES CASE AGAINST NINE TENNESSEE BUILDERS POSING AS LEGITIMATE BUSINESSES IN KICKBACK SCHEME (12/11/2005)
• Franklin County Conveyance fee on home sales is doubled effective January 12, 2006. (12/14/2005).
• Feds serious about cracking down on kickbacks (12/04/2005)
• Two Indicted After Investigation into Midwest Title Agency (11/21/2005)
• Colorado Department of Insurance Takes Action Against Sham Title Insurance Agencies (11/16/2005)
• Ohio Real Estate Agency sued for alledged kickbacks (11/15/2005)
• Using title agency affiliated with broker can be mistake (09/25/2005)
• HUD Settlement With Coldwell Banker Sends "Affiliated Business" Warning to Realtors (09/19/2005)
• Major Federal Crackdown On Realty Fee Kickbacks Underway "In Every State." (07/25/2005)
• Mortgage Brokers Ask HUD To Investigate Builder "Incentives" To Homebuyers (05/09/2005)
• HUD's RESPA Effort 'Misplaced' (04/13/2005)
• RESPA "Police" Target Alleged Referral Payment Schemes (04/04/2005)
• Civil Justice Settles Class Action Lawsuit on Behalf of Real Estate Consumers (05/05/2004)
• Local Title And Settlement Agencies Begin Offering Guaranteed Mortgage Packages (01/26/2004)
• New RESPA Enforcement Pledged (04/11/2001)