in NJ what's the deal with "Lender's title insurance" and "buyer's title insurance" (buyers)

[sonofagunk]

Getting confused with all of the terms in closing costs.

The buyer one is required by the state? The lender's one is 1.5X the buyers one.

[Delphi]

Originally Posted by sonofagunk

Getting confused with all of the terms in closing costs.

The buyer one is required by the state? The lender's one is 1.5X the buyers one.

There is one title insurance.

Buyer can buy from the lender or third party. However, the price is regulated by NJ law, so there should not be significant differences.

[RhysNJ]

That's not accurate.

One type of policy form is issued to the lender, one type to the buyer. Both are sold by title agencies on behalf of title insurance companies. Neither are required by the state, but the state does fix the rates in NJ, unlike some other states where rates are competitive. Some lenders own their own title agencies. However, it is the buyer's choice, and a violation of Federal law to require that it be purchased from any specific agency.

Wikipedia has a good overview of this and other issues related to title insurance in the US.

Rhys

[sonofagunk]

Originally Posted by RhysNJ

That's not accurate.

One type of policy form is issued to the lender, one type to the buyer. Both are sold by title agencies on behalf of title insurance companies. Neither are required by the state, but the state does fix the rates in NJ, unlike some other states where rates are competitive. Some lenders own their own title agencies. However, it is the buyer's choice, and a violation of Federal law to require that it be purchased from any specific agency.

Wikipedia has a good overview of this and other issues related to title insurance in the US.

Rhys

I just do not understand why both are "needed" on my closing costs. The buyer's one is the price that the state set, the lender's one is buyer's*1.5