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41 News Bull. 1 (1981)

handle is hein.barjournals/ialaw0041 and id is 1 raw text is: THE NEWS BULLETIN OF THE Iowa State Bar Association Vol. XXXXI, No. 1 1101Fieming Building, Des Moines, lowa50309 January, 1981 LEGALIZATION OF TITLE INSURANCE SALE IN IOWA OPPOSED BOARD OF GOVERNORS IN SPECIAL MEETING FTC JURISDICTION QUESTIONED A fourth and special meeting of the Board of Governors of The Iowa State Bar Association was held at tha Hotel Fort Des Moines in Des Moines, Iowa on Saturday, January 24, 1981. President Berenstein advised the Board that the special meeting was being called to discuss four specific items, being Title Insurance; FTC Investigation; Comparative Negligence; and the current status of legislative matters. Set forth below for the information of the entire membership Is a complete copy of the minutes of this special meeting. TITLEINSURANCE LeRoy Redfern, Cedar Falls, Chairman of the Committee on Title Standards, presented the report of the committee with respect to the subject of title insurance. He advised that the report and its accompanying position paper is supported by all members of the Committee MEET YOUR STAFF Roxanne Hill serves as a back-up receptionist, handles all of the legal forms and other related publications of the Association and also assists with the Lawyer Referral Service. She has been with the Association for one year. Roxanne is a native of Leon, Iowa and has one sister. She attended Central Decatur Community School. She has a very engaging personality, a fine sense of humor and we feel fortunate to have her with us. with the exception of one member who, because of a conflict of interest, disqualified himself from participating. Each member of the Board of Governors had been provided with a copy of the proposed position paper prior to the Board of Governors Meeting. He advised that the Committee feels very strongly that The Iowa State Bar Association should make every effort to oppose legislative action to legalize the sala of title insurance within the boundaries of the state of Iowa. He advised that at the heart of this whole matter is the Iowa consumer. Under the economic conditions currently existing the authorization of the sale of title insurance within the boundaries of the state would create a substantial and costly increase to the average Iowan purchasing real estate, whether such purchase be residential or farm real estate. He advised that the financial institutions are concerned about the secondary market wherein groups of mortgages are pooled and sold to financial institutions in large blocks. He advised that such institutions purchasing such mortgages can obtain title insurance covering such mortgages without any need to change the present state of Iowa law and again recommended that the Board take action on behalf of the Association to oppose all efforts to legalize the sale of title insurance in Iowa. Thereupon he presented the following position paper which has been approved by the Title Standards Committee and recommended that such position paper be approved by the Board: TITLE INSURANCE SHOULD NOT BE LEGALIZED IN IOWA In 1977 the Iowa Supreme Court approved the General Assembly's action barring title insurance, describing such coverage as a costly form of insurance for which . . . there is little need. The legalization of the purchase of title insurance in the state of Iowa would be a disservice and a low blow to homeowners, home buyers, farm owners and farm buyers of Iowa. Transfers and mortgages of real estate would be more costly to buyers purchasing title insurance than using the present wa abstract examination system. Average title related expenses could more than doub'a. Windfall profits to foreign corporations would result from legalizing title Insurance in Iowa. Title insurance would benefit, at the expense of the home buyer, only Title Insurance Companies, banks and other financial instgutions that would receive commissions and rebates as agents. Legalization of title Insurance would fan the flame of inflation by adding to the cost of purchasing a home. These facts are revealed by examining title insurance costs recently being charged by two Title Insurance Companies in contiguous states that sell, outside the state of Iowa, some title insurance on Iowa real estate. Those Title Insurance Companies' charges are substantially higher than expenses incurred under the present Iowa abstract-attorney opinion system. One company charges $242.50, and another $252.00 for owner-mort- gage title insurance on a $50,000.00 home. An attorney owner-mortgage title examination would range from $65.00 to $175.00, with a norm of only $95.00, according to a recent survey. The cost of providing a current abstract of title is the same under both systems. One company charges $372.50, and another $382.50, for owner-mortgagee title insurance on a $90,000.00 Iowa property. A copy of the closing papers on the sale of real estate for $90,000.00 in the state of Florida, dated January 4, 1980, reveals Owner Title Insurance Charge $500.00. Under the present Iowa abstract-attorney opinion system the charge for an opinion on title for real estate selling for $90,000.00 would range from $85.00 to $200.00 with a norm of only $135.00. Abstracting costs remain the same under both systems. Cont. on Page 2 NEWS BULLETIN DELAY This January Issue of The News Bulletin was intentionally delayed in order to include a full report of the Special Board Meeting held on January 24, 1981. The minutes were prepared immediately thereafter and sent to the printer for inclusion with the material he was already holding. Future issues, subject to any emergencies, will be forthcoming as in the past by approximately the 15th-20th of each month. Please Reserve June 17,18 & 19,1981 for the 108th Annual Meeting of The Iowa State Bar Association to be Held at the Marriott Hotel. (15 Hours CLE Credit Planned) n, I /

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