(Left to right): Assemblyman Michael Montesano, Assemblywoman Melissa Miller, Assemblyman Andrew Garbarino, Assemblyman Brian Curran and Assemblyman Ed Ra at a forum on proposed regulations for title closers.
Recently, Assemblyman Brian Curran (Lynbrook-21st A.D.) along with Assembly members Michael Montessano, Melissa Miller, Andrew Garbarino, Dave McDonough and Ed Ra hosted a forum on the Department of Financial Services proposed regulations for title closers at the Lynbrook Library. Both the governor and the DFS were invited to attend to hear comments.
The proposed regulations are well-intentioned, said Curran. However, they jeopardize small, local real estate companies that do not engage in questionable practices. This practice is commonplace in the real estate industry. These referrals are how industry professionals get business. If the proposed DFS regulations are allowed to pass, local, small real estate companies will be put out of business and, while hurting for business because they cant get referrals, the remaining real estate agencies will be forced to charge double the fees on consumers. The state Legislature is working to pass legislation to counter the DFS regulations to benefit consumers and real estate professionals.
The proposed regulations, 206 and 208 are meant to stop abuses by large title closing companies that provide kickbacks to real estate professionals for purchasing title insurance from their company on behalf of their clients, the homebuyer. The costs for these quid pro quo expenditures are then put on homebuyers.
I along with rest of my Assembly Minority colleagues recognize that new homebuyers feel that they get taken advantage of with undisclosed fees and charges at time of closing, said Curran. Like DFS, we want to put an end to these excessive charges by implementing changes that will target the abusive title companies and closers. However, based upon the testimony we received at the forum, the proposed regulations will have the opposite effect by creating the unintended consequences of increased closing costs and putting small, non-abusive companies and title closers out of business. No matter how well intended these regulations are, that is definitely not what we want.
The regulation changes proposed by the Department of Financial Services will put small title businesses and independent title closers out of business, said Jim Hunter, a realtor at Ed McNulty Realty. The way they are written displays an ignorance of how the title industry functions; how it protects consumers and helps keep costs down. No effort was made to consult our industry in the drafting of these regulations and that will be reflected in the dangers to the public and the industry which will become reality once they go into effect.
The July 29 forum was vital. It allowed small title company owners and closers to speak directly to our legislators and the public. We were able to explain our roles in real estate transactions and demonstrate how we contribute to the welfare of our communities in performing our jobs.
More than 75 concerned individuals attended the forum with at least 10 real estate professionals testifying as to how the proposed DFS regulations will hurt both industry professionals and, in the end, consumers.