A real-life example of why the New York State Department of Financial Services has stepped-in to oversee the title insurance industry in New York State!
The case involving NYS Senate majority leader Dean Skelos and his son Adam alleging pay-to-play in real estate transactions, also serves as an example of why Governor Cuomo last week announced “Anti-inducement” regulations and broader reforms expected to cut title insurance closing costs up to 20 percent for new purchases, up to 60 percent for refinances…’ (Source)
At the time of the Governor’s remarks Hallmark Abstract Service issued a rebuttal, stating in part…
‘…before getting to our take on the Governor’s proposal, we feel that it’s important for us to clearly state that in our opinion the vast majority of firms who work and compete in the title insurance space in New York State are honest and hard working men and women who do business the right way!
Of course, as you will find in any industry, there will always be some bad actors.
It is our sincere hope that Governor Cuomo does not attempt to unfairly penalize the majority simply to make a political point.
For any small business a significant reduction in earnings power as described in the Governor’s press release, particularly if unwarranted, could never be viewed as a positive!
This is particularly true when it is our belief that title insurance firms like ours are currently being fairly compensated for the level of expertise that we bring to what could be the most significant financial expenditure of our clients lives!
That said, if the Governor’s claim of kickbacks being paid by some firms to acquire business proves to be accurate, his proposal if enacted would be a de facto leveling of the playing field negating pay-to-play as a part of anyones business model…‘ (Source)
Dean Skelos Indictment
While the example below describes allegations only with the court system ultimately tasked with determining an actual outcome, pay-to-play and influence peddling unfortunately does seem to be part of the business model for some in the title insurance industry.
“…Senator Skelos is currently on a leave of absence from the firm,” the firm said in a statement Ms. Heaviside provided. “Dean has been a tireless advocate for Long Island and a valued and trusted colleague for over 20 years.”
But the criminal complaint in the case — which cataloged a series of accusations centered on the senator’s efforts to use his official position to extort money for his son — did not reflect well on the firm.
The complaint said that at the senator’s request, the law firm “steered title insurance work” to his son, Adam B. Skelos, “including at least one real estate transaction” for over $32.6 million.
The complaint also said that since the senator began working at the firm in 1994, he has been paid more than $2.6 million, despite the fact that it appears, based on evidence gathered during the investigation, that Mr. Skelos “did not perform any actual legal work” for the firm. In 2013, he earned between $150,000 and $250,000 from the firm, according to his financial disclosure filing. None of the criminal charges are related to Mr. Skelos’s work with the firm…‘ (Source)
And politically speaking, as a result of the complaint Dean Skelos’ hold on power in Albany is quickly eroding.
Michael Haltman, President of Hallmark Abstract Service, New York.
HAS is a provider of title insurance in New York State for residential and commercial real estate transactions.
And, for anyone either buying a property or refinancing, remember that although your attorney will likely recommend a title insurance provider you always have the right to choose your own (click here to learn more)!
If you have any questions you can reach Michael by email at email@example.com.Google+