-
Despite calls by industry trade groups to slow down, the consumer bureau said Wednesday that it will release a consolidated disclosure form by its July 21 deadline.
June 20 -
The Supreme Court punts on resolving an eagerly watched RESPA lawsuit.
August 1 -
The title insurance unit of First American Financial Corp. has agreed to acquire Hexter-Fair Title Co. in Dallas.
December 23
The discount title insurance company Entitle Direct Group announced a $20 million investment by a major reinsurance company on Wednesday, raising the prospects of a challenge to the incumbent players in the title industry.
While paid for by borrowers taking out a mortgage loan, title insurance is typically procured with the help of banks and their loan officers. Because insurers play an essential role in closing loans, a national push by Entitle Direct could provide loan officers with a discount option or spur the development of a direct-to-consumer title insurance market.
Entitle Direct's expansion is being funded by PartnerRe (PRE), a Bermuda-based reinsurer with a $4.6 billion market capitalization.
"This cements our presence in the market and provides us with growth capital," says Timothy Dwyer, the founder and chief executive of Entitle Direct. "We intend to reach more lenders and mortgage brokers."
Four major insurers hold a sizable majority of the title insurance market, with regional insurers filling out the rest of the ranks. Three years after its founding, Entitle Direct accounts for just 0.12% of the overall market.
The Stamford, Conn., company arguably holds more significance than its market share due to its combative approach to pricing. Entitle Direct promises a 35% discount to the major title insurers in every state where prices are not fixed, even as it provides what it bills as "all inclusive" closing services.
Some of the capital provided to Entitle Direct will be used to triple the company's four-person business development team within the next year, Dwyer says. The company markets itself to banks and mortgage brokers as a way to bring down closing costs and thereby increase their competitiveness.
Pricing may not be the only factor in determining title industry market share. Birny Birnbaum, who runs the Center for Economic Justice, a consumer advocacy organization, has argued that the title insurance market has become largely price insensitive. Established relationships between title companies and lenders can be hard to overcome, he says.
"The fact that [Entitle Direct] hasn't already grown dramatically, despite offering such a steep discount, is a testament to the nature of the market," Birnbaum says.
Dwyer says he's hopeful that both banks and consumers will view his company as a value proposition.
"Price insensitivity may only be judged if the message has gotten through," he says. "Now we will have a true marketing budget."
