April, 1972 a Message from the Chairman, Title Insurance and Underwriters Section
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April, 1972 A Message from the Chairman, Title Insurance and Underwriters Section APRIL, 1972 The recent Mid-Winter Conference of the Association generated the largest registration of all mid year meetings to date. Obviously, many factors contributed to this manifestation of interest and de sire for participation in the affair of our Association, including the attractiveness of a dynamic eco nomic and cultural center such as the beautiful city of Atlanta. However, I rather suspect that the greatest motivating force that served to stimulate this mass migration of title men and women to Atlanta was their sincere concern over the unprecedented and undeserved attacks recently directed against our industry from the Capitol Hill scene, and their firm resolve to unite in its support and defense. Those of us who are cognizant of the substantive and meaningful contributions made by our in dustry to the general economic progress of this nation; who understand the complexities involved in the ownership, transfer and financing of interests in real estate and the consequent need for the precise and invaluable services and assurances afforded through our industry endeavors; and who are acquainted with the dedication and professional integrity that characterize the overwhelming majority of our individual members, should not hesitate to make our beliefs known and our voices heard. The current national interest in consumerism is sound and logical and is certainly compatible with the precepts and principles that have historically undergirded our industry. As a result, our past has been noteworthy with achievement, and our future is filled with countless opportunities for profitable growth and development. Sincerely, Robert C. Dawson FIRST MAJOR "BREAN-THROIJGH'1 IN 2S YEARS IN REAl ESTATE TABlES! NEW INTEREST RATES INCLUDED Your NEW Hard-Working GIFT FOR RElllTORS! Created by Realtors for Realtors In addition to the conven tional loan amortization payment tables, the New, 240-page Realty Computer provides, in shirt-pocket size, thirty-eight tables and checklists badly needed by real estate people in their daily transactions. You owe yourself an appraisal of the REALTY COMPUTER-one of the finest professional fact finders you have ever seen. Your clientele will be asking for it. Write today for your complimentary copy PROFESSIONAL PUBLISHING CORPORATION 55 MITCHELL BOULEVARD • SAN RAFAEL, CALIFORNIA 94903 t was a proud and inspiring occasion. Hundreds were I assembled in Fairfax County, Virginia, March 12 to dedicate a magnificent new $8 million secondary school named in honor of Army Sgt. James W. Robinson, Jr., first Virginia resident to receive the Congressional Medal of Honor for Vietnam valor that in 1966 cost him his life. For those present-including ALT A Board of Governors Member James W. Robinson, Sr., and wife Alice-one thing was apparent that sunny March afternoon. By its name, the James W. Robinson, Jr., Secondary School already was endowed with a tradition of honor and leader ship for generations to come. T lltle News thf:, vfftl1.Jf µutl11.cJf1t r AmeflL n land Title A c;.s Jr.1at1un Association Officers Fe a tu res President John W. Warren Albright Title & Trust Company Outlook: HUD-VA Settlement Cost Regulation 4 Newkirk, Oklahoma Vice President Price, Reiner, Struthers Star on Radio Spots for ALTA 6 James 0. Hickman Pioneer National Title Insurance Company 'Grassroots' to Northwest 7 Los Angeles, California Chairman, Finance Committee Part Ill: ALTA Judiciary Committee Report 9 Hale Warn Title Insurance and Trust Company Los Angeles, California Treasurer James G . Schmidt Commonwealth Land Title Insurance Company Philadelphia, Pennsylvania Chairman, Abstrncters and Title Insurance Agents Section James A. Gray Departments Fidelity Abstract & Guaranty Company Benton, Arkansas Names in the News 11 Chairman, Title Insurance and Underwriters Section Timetable 16 Robert C. Dawson Meeting Lawyers Title Insurance Corporation Richmond, Virginia Immediate Past President Alvin W. Long Chicago Title and Trust Company Chicago, Illinois Association Staff Executive Vice President ON THE COVER: Sally Struthers and Bob Reiner (left), stars of CBS William J. McAuliffe, Jr. Television's "All in the Family", and Vincent Price, the interna Director of Research tionally-known actor, are featured on the 1972 ALTA home buyer Michael B. Goodin education radio announcements. For details, please see page 6. Director of Public Affairs Gary L . Garrity Business Manager David R. Mclaughlin VOLUME 51, NUMBER 4, 1972 Association General Counsel TITL/o· NEWS is p11/Jlis!iC'd by American Land Title Association, Thomas S. Jackson 1828 L Strret, N.W., Wa~liingt o n, D .C., 20036; (plwnc) 202-296-3671 Jackson, Gray & Laskey 1828 L Street, N.W. Washington, D.C. 20036 GARY L. GARRITY, Editor, ELLEN KAMPINSKY, Assistant Editor Robert Horn, Program Analyst Department of Housing and Urban Development Outlook: HUD-VA Settlement Cost Regulation (Editor's note: This article is in evaluating the- recommendations ance or guaranty during March, 1971. adapted from an address presented at contained in our report. We were The data were transferred to a code the 1972 ALTA Mid-Winter Confer faced, at the outset of the study, sheet that was specifically designed ence in Atlanta.) with the need to define settlement for this study. Several computer pro costs. In line with our understanding grams were developed to analyze the * * * of the intent of Section 701 of the data. These programs included highly appreciate your invitation to dis l 970 law, we defined "settlement sophisticated techniques that enabled I cuss the problems of mortgage costs" for the purposes of this study us to adjust for differences in sales settlement costs and to describe the as " the sum of closing cost items, price and to analyze the effects of legislative and administrative actions loan discount payments or mortgage up to six variable conditions, such as that HUD and the VA plan to take points, prepaid items and sales com the location of the property and the in order to correct the serious abuses missions." "Closing costs"-which are kind of title assurance required. that have arisen in this field. part of "settlement costs"-were de Settlement costs varied widely from As you are aware, our depart fined to include all charges paid at place to place, and even in the same ment, together with the Veterans settlement for obtaining the mortgage locality. National data from our survey Administration, has just completed loan and transferring real estate title showed that for a house that was sold and submitted to the Congress an including, among other items, the in the $20,000 to $24,000 price extensive study and report on the credit report, title examination and range, total settlement costs paid by subject of mortgage settlement costs. insurance, attorney fees and escrow both the buyer and se ll er ranged This report was called for by Section fees. from a low of less than $200 to a 701 of the Emergency Home Finance In developing the report we col high in excess of $5,000. Closing Act of 1970. lected data for over 25 separate cost costs in the same price range varied First, I would like to summarize items. The data were compiled by all from less than $50 to nearly $2,000. how the settlement cost study was HUD and VA local offices on a Variations in national data might conducted since this will be helpful sample of cases submitted for insur- be expected, hut extreme variations 4 APRIL 1972 in costs also were found within lo back to the colonial period. As real personal search, is the most expen calities as well. For example, in Los estate became more valuable and the sive form of title search, averaging Angeles County, total settlement types of interests in real property almost twice as much in cost as ab costs for a house sold in the $20,000 more diverse the recording process stracting or personal search alone. to $24,000 price range varied from became more complicated. There arc The difference between the least ex less than $1,000 to nearly $4,400, approximately 3,000 counties or their pensive (abstracting or personal and closing costs ranged from about functional equivalents in the United search) and the most expensive (title $200 to almost $1,000. In Washington, States. This means that not only is insurance alone or title insurance D. C., closing costs on a $20,000 to administration of public records with personal search) is smallest in $24,000 house ranged from $487 to heavily decentralized but there are side SMSA's but still ranges from $1,030; in Cook County, Illinois, inevitable variations in details and less than one per cent of the sales they ranged from a low of $102 to caliber of administration. Some coun price to slightly more than 1.5 per a high of $723; and in Ramsey ties do a good job, some a very cent. County, Minnesota, from $154 to poor job; and the quality and meth Total settlement costs vary by $621. ods of operation tend to vary with geographical area primarily because population size, number of land par Similar variations were found in of differences in tax escrow require cels in the county, local real estate all of the areas that were studied m ments. transfer tax payments, pre activity, competence of local govern detail for the report. vailing sales commission rates and ment personnel and the nature of mortgage market conditions. The settlement procedures are Since state statutory provisions pertaining northeastern states of Maine, New governed by local custom, an analy to public land records. As is to be Hampshire, Vermont, Massachusetts, a thorough sis of these costs required expected, public recorders' offices Connecticut, and Rhode Island have of the underlying local knowledge differ greatly in the volume of docu the lowest average settlement costs.