Notice: Function _load_textdomain_just_in_time was called incorrectly. Translation loading for the wp-migrate-db domain was triggered too early. This is usually an indicator for some code in the plugin or theme running too early. Translations should be loaded at the init action or later. Please see Debugging in WordPress for more information. (This message was added in version 6.7.0.) in /srv/app/gotoiba-dev/htdocs/web/wp-includes/functions.php on line 6121
Can lenders require borrowers to use particular title insurers? – IBA Compliance Connection

IBA Compliance Connection

Your go to source for compliance!

Can lenders require borrowers to use particular title insurers?

—

by

For consumer mortgage loans secured by the borrower’s principal residence, Illinois law prohibits lenders from requiring borrowers to use a particular title insurance company.

  • The Title Insurance Act prohibits lenders from requiring a party to a contract for the sale of residential real property to use a particular title insurance company or agent. 215 ILCS 155/18.1. This provision is limited to purchase loans for “residential real property,” defined as a building with one to four residential units where at least one unit will be owner-occupied. 215 ILCS 155/3(14). The IDFPR confirmed this in its Statement Regarding Consumers’ Right to Choose Title Provider.
  • The Consumer Fraud and Deceptive Business Practices Act prohibits lenders from requiring borrowers to use a particular title insurance insurer, agent, or broker, unless the lender has “reasonable grounds” to reject the title insurer because it will “afford insufficient protection to the lender.” 815 ILCS 505/2T. This provision is limited to loans secured by an owner-occupied single family residence or owner-occupied residential condominium unit.