RESPA Statute 12 USCS Section 2608
Title Companies; liability of seller.
(a) No Seller of property that will be purchased with the assistance of a "federally related mortgage loan" shall require directly or indirectly, as a condition to selling the property, that title insurance covering the property be purchased by the Buyer from any particular company.
(b) Any Seller who violates the provisions of subsection (a) shall be liable to the Buyer in an amount equal to three times all charges made for such title insurance.
Thus, the Buyer has the choice of which title company to use if a "federally related mortgage loan" is used; which is broadly defined and merely excludes seller-carry financing arrangements and all-cash deals.
Many Sellers either misunderstand or fail to consider this statute. Often times, Sellers contract to pay for the premiums on the title insurance and falsely assume that this also gives them the right to choose the title insurance company.
Bottom line: in most real estate transactions, the Buyer has the right to choose the title insurance company despite the Seller's obligation to pay the premium.
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