House OKs title insurance reform

Title insurance reform is an issue that many in New Mexico have been working on for years, and one that gained some momentum on Friday when it was approved on a vote of 59-0 by the House.

The Business and Industry Committee substitute for House bills 488 and 357, sponsored by House Speaker Ben Lujan, D-Nambé, now heads to the Senate.

“Friday’s unanimous, bipartisan vote in favor of the speaker’s bill is a big step toward lowering title insurance costs for homebuyers and homeowners seeking to refinance a mortgage. It is especially urgent given this challenging economic environment,” said Fred Nathan, executive director of Think New Mexico, which has led the charge for title insurance reform.

New Mexico has the eighth-highest closing costs in the nation. One of the largest elements is title insurance. The state currently allows the state insurance superintendent to set rates for title insurance, which eliminates the cost-reducing effect of competition.

The reform bill would still allow the superintendent to set a rate, but companies could propose charging lower rates, so in essence the superintendent would be setting the highest allowable rate possible.

The bill has not yet been scheduled for any Senate hearing, and must make its way through two committees before a full Senate vote.

This article has been updated to clarify what the bill would allow.