Over the past several years, we’ve noticed a storm brewing in the real estate and title insurance industry. More Affiliated Business Arrangements (AfBAs) have sprung up in the title space. An AfBA is an arrangement made between a title company and real estate agents or lenders that provides financial incentives for referring a consumer to their title company. Unfortunately, there has been a decrease in consumer awareness of these arrangements.  This has led to the perfect storm of a precipitous increase in split closings. Like thunderstorms, split closings are scary.

So…what’s a split closing and why is it so scary?

A “split closing” is when two title agencies are involved in a closing (one handles the sale transaction and one handles the mortgage transaction). Split closings not only cause delayed closings, but they also lead to a higher risk of identity theft and an increased vulnerability to wire fraud. What would you expect to happen if your bank information, personal data (like your social security number), and other non-public information is passed between two companies? And what if one of those companies has lax security protocol and insufficient data protection controls?

The need for top-tier security protection is no passing rain cloud: according to the FBI, there has been an 1,100 percent rise in cyber crime from 2015-2018. Cyber crime victim losses totaled 2.71 billion dollars in 2018 alone.

The risks that come along with a split closing are not necessary. Consumers have the right to choose their own title company. In fact, it is in their best interest to do so.

Many real estate agents and lenders have an AfBA with a title company, which provides them with financial incentives to use said title company’s closing services. These agents and lenders then encourage their clients to use the partner title agency to make more profit, whether or not the title company has the correct security controls, industry experience, or ethical standards for issuing a policy. Neither the Seller nor Buyer receive any specific financial gain from splitting a closing. It’s important to keep in mind that a real estate agent or lender cannot legally require you to use their affiliated title agency.

To keep you out of closing storms, Liberty Title has developed an innovative new program that provides the Buyer, the Seller, and their agents with enhanced security protections and added benefits before, during, and after closing: Umbrella by Liberty Title.

Liberty Title is an independent title agency with 45 years in the business. We can close your deal safely and on time. It is in our customers’ best interest to close both sides of the deal with us. To help our customers negotiate for both sides of the deal, we created a premiere program for closing with no additional cost to the Buyer or Seller. With Umbrella by Liberty Title, you will have the most secure closing experience possible. You are automatically enrolled in Umbrella when we have both sides of the deal and there is no charge for the program. We encourage our customers to review the many benefits of Umbrella, some of which include: an upgraded Owner’s Policy to the Buyer, coverage under our Lloyd’s of London cybersecurity policy, and secure wiring through SafeWire, to help ensure your funds will be wired safely.

We are confident that we can keep you safe under our umbrella – and even catch sight of a rainbow. To learn more about Umbrella and how to negotiate enrollment in the program, please contact us today! We are here to help.