Title Insurance Reforms Put Squeeze on Closers

Sometimes, high-minded reforms have unintended consequences. That seems to be the case with new reforms to the state’s title insurance industry, which forbid insurers from passing along marketing costs – gifts, trips, sporting event tickets – to homebuyers in the form of “fees.” Those reforms, the result of a state investigation into industry abuses, also include a ban on gratuities and attendance fees for closers, independent contractors who perform numerous tasks at every real estate closing. 

“I’m working harder for less money,” title closer Beth Hazan tells the Real Deal. “How am I going to pay my mortgage on my co-op? I’m being squeezed.” 

The job of a title closer isn’t glamorous, but it’s vital to the transfer of New York real estate. Title closers are present at all closings, transferring checks and documents and performing other tasks. Typically, title companies pay closers $35 to $50 per closing, and closers rely heavily on tips – ranging from $150 to $250 – paid by the seller. An enterprising closer can make around $100,000 a year, according to interviews with several closers. Though closers weren’t part of the problem that led to the new reforms, they’re paying a stiff price. 

Adding insult to injury, the New York State Land Title Association, the industry’s trade group, isn’t going to bat for title closers. “Our litigation strategy must be based upon the strongest arguments with the highest likelihood of success,” the trade group wrote in a memo, “and unfortunately that does not include closer gratuities.” 

“They threw us under the bus,” says Linda Hall, who has been a title closer since 1974 and says she expects her income to drop by more than half because of the ban on gratuities.

Some title insurance companies have signaled their intention to help pick up the slack. Hallmark Abstract is upping its rate from $50 to $250 when the closer has to physically bring a check to the bank to satisfy a loan.