The Consumer Real Estate Settlement Protection Act

The Consumer Real Estate Settlement Protection Act is stated in bold print in the Regional Sales Contract to clearly protect the purchaser in the Commonwealth of Virginia.  I'm sure many other states have similar laws or acts.  The Virginia Act states simply that the purchaser has their choice of Settlement Agent for the closing of the transaction.

Since the flood of foreclosures in Virginia (I sell within a commuting distance of Washington D.C.), the statement that the "Seller is to choose the Settlement Agent, " or, "Purchaser must use Seller's Title Company," has become very prominent in foreclosure listings.  While this is obviously something that cannot be forced upon a purchaser, agents have been forced time and time again to jump through hoops to use their own settlement agency.  I just recently had a deal close where I was made to write a letter, signed by my purchasers, explaining why we wanted to use our own settlement agency.

I understand that these banks have their own settlement agency, and they hand out "free title binders" to purchasers who do go along with their "in-house" settlement agent. (By the way, these "free" title binders don't always end up being free on the HUD-1 and then try getting $50 removed off the statement at the last minute when the closing agent has to travel hours to get to the settlement that is taking place 3+ weeks late).  If you have worked with these same banks, then you know as well as I do, that nothing goes as planned and that "free title binder" is nothing but an awful consolation prize as the end of a treacherous closing.  Thus, we suggest that the purchaser go with a local, reputable, settlement agent that will get the job done correctly.  I have had foreclosures close only a day or two late (as opposed to 3 weeks) soley because my title company pushed the bank's title company to get the job done!

Something must be done, not only to continue to protect our purchasers by allowing them to have their own representation, but also to cut out the hoops that we are all having to jump through to ensure that the law that is already in place is upheld! 

We should NOT have to provide any sort of documentation, besides what is already stated in our regional contract to explain why our purchasers are entitled to their own representation.  And if these foreclosure company's need a bigger reason, then they should look only at their own track records.  If their title companies could get the job done right and on time, then perhaps it wouldn't be a big deal to have our purchasers close with their title companies.

Don't these bank's hold enough power as it is?  Let's keep in mind that our fiduciary responsibility as a buyer's agent is to our buyers!