In the past, when you refinanced a loan in Virginia or Washington DC you used to have to have an existing title policy that was less than 10 years old in order to get the reissue rate. And you had to produce a copy for the title company. Then either the original title company, or even a new one, would be able to issue you a title policy with a reissue rate, which saves quite a bit of money. Now it is not required to have the old title policy at all, so the age of the policy or the issuing company of the prior policy are no longer relevant.
Now in Washington DC and Virginia the reissue rate will automatically apply. This means the borrower is no longer required to provide a copy of an existing owner’s title insurance policy to obtain the full reissue rate. A 40% discount for the “reissue rate” is automatically applied against the lender’s title insurance premium. Previously, without an existing owner’s title insurance policy, a DC refinance for $500,000 would have cost $2,100 for the lender’s title insurance premium. As of April 1, 2011, the same transaction will cost only $1,260 in premium, a savings of $840!
I suspect that eventually this will be true in Maryland as well, and my understanding is that a large title insurer, First American Title Insurance, is pushing for it in MD also. However, MD has traditionally been the strictest of the three jurisdictions in the Washington DC Metro area when it comes to title insurance rates, so it may take some time.
In order to get a reissue rate in California, normally a client would have to refinance with the same lender. But in the last few years the title companies are giving the same rate whether people refinance with the same lender or not. I spoke to a CA Escrow company about this and was told, “I am an independent escrow company, I do not have an affiliation with a title company or real estate company. I can use any title company borrowers tell me to use.” So in CA it would help to ask about the reissue rate in advance, and potentially make sure you are using an independent escrow company.