Mortgage and title - you always have a choice

I'll call this post a public service message to buyers and sellers of real estate.  You always have a choice when it comes to title companies and mortgage lenders.  When dealing with a real estate agent they may suggest or recommend a mortgage or title company,  but in the end the choice is yours. 

When buying new construction, the builder may specify which title company the buyer will use, this is illegal, yet I have seen new construction contracts that come from builders that specify buyers title company.   It is still the buyers choice.

It is not unusual for a real estate company to have an ownership interest in a title company,  an affiliated business relationship.  Both the state of Minnesota and Hud are cracking down on and watching affiliated business arrangements.

Under the federal Real Estate Settlement Procedures Act (RESPA), builders and realty brokers are prohibited from requiring customers to use their own affiliates or subsidiaries for mortgage, title or other settlement-related services.   They are also required to use an affiliated business disclosure which names their affiliates.

Here is an excerpt from the standard disclosure: "THERE ARE FREQUENTLY OTHER SETTLEMENT SERVICE PROVIDERS AVAILABLE WITH SIMILAR  SERVICES. YOU ARE FREE TO SHOP AROUND TO DETERMINE THAT YOU ARE  RECEIVING THE BEST SERVICES AND THE BEST RATE FOR THESE SERVICES."