Title Insurance And Reissue Rates.

April 20th, 2011

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.

Brian Martucci is a loan officer for Capital Bank Home Loans, a division of Capital Bank, N.A. He has been in the mortgage industry since 1986 and has served in a number of roles, including loan processor, loan officer, mortgage broker, branch manager, and vice president. Brian Martucci – NMLS# 185421. His opinions do not necessarily reflect the opinions and beliefs of Capital Bank Home Loans or Capital Bank. Capital Bank, N.A.- NMLS# 401599. Click here for the Capital Bank, N.A. “Privacy Policy”.​

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2 Responses to “Title Insurance And Reissue Rates.”

  1. Brian:

    We’re looking into this. We’ve asked all of the major title insurers to review their rates and so far, legal counsel response is that reissue rates ARE NOT automatically given. All of the major underwriters rely on the purchase of an owner’s policy as criteria for reducing the lender’s title insurance premium by 40% for a refinance and that the policy be less than 10 years old (although that provision has tended to be flexible). I have to believe that Federal Title as agent for First American Title Insurance Co., is basing this across the board policy on the statistic that it is rare that a purchaser DOESN’T purchase owner’s title insurance and with our online resources, we all have the ability to obtain copies of policies from the underwriters’ database.

  2. Joe Gentile says:

    Janelle,

    First American recently changed its procedures in regards to refinances in both Virginia and DC. In both those jurisdictions, they have lowered their refinance loan policy title insurance rates to equal what previously was known as a reissue discount. So every refinance in VA and DC receives the equivalent of the reissue discount, without having to provide a back policy. Maybe the confusion is over the word “reissue”, since First American no longer gives a “reissue”, they have just lowered their refinance rates so that everybody receives what was previously called a “reissue” discount.

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