New York has imposed new rules on title insurers that officials say could sharply reduce the cost of insurance for homebuyers.
Gov. Andrew Cuomo announced the regulations on Wednesday. The Democratic governor says the changes are meant to stop unfair charges from being passed on to homebuyers.
Benjamin Lawsky, the state’s Superintendent of Financial Services, says his office’s investigation found that some title insurers buy lavish meals and entertainment for attorneys and real estate professionals in exchange for referrals. The costs were then passed along to buyers.
The new rules also set caps on certain fees and requires insurers to submit their rates to regulators at least every three years.
The state estimates that the changes will cut title insurance closing costs by as much as 20 percent.