Title costs tied to property’s value

GazetteXtra.com reports, "The cost of title insurance is based on the price of the property being bought or sold or the amount of the mortgage being refinanced. It starts with a base fee and then goes up based on the value, with specific price points along the way."

"The Web site www.bankrate.com said that in 2006 the average cost of title work in Wisconsin was about a half percent of the loan value."

"Profitability for the title insurance industry is cyclical. The booming housing market of the early 2000s, coupled with increased mortgage refinancing, benefited title insurers. In fact, the industry posted $16.6 billion in revenue in 2006, up from $5.1 billion 10 years earlier."

"But the housing pendulum has swung, and revenues are shrinking and costs rising as home prices have decreased and increases in foreclosures have lead to more title disputes. Several local title insurance companies have laid off employees or cut hours and benefits."

"The profits of the good years are expected to cover the lean years, when fixed costs driven by evolving technology continue with little regard to revenues."

"Competition in the local marketplace also has increased. Many companies with no real ties to the community have entered the market in search of real estate agents and mortgage lenders to send title insurance business their way."

"The result has been a drop in prices and quality, long-time Janesville title agents said."