HOUSE JOINT MEMORIAL 48

49th legislature - STATE OF NEW MEXICO - first session, 2009

INTRODUCED BY

Mimi Stewart

A JOINT MEMORIAL

REQUESTING THE INSURANCE DIVISION OF THE PUBLIC REGULATION COMMISSION TO STUDY THE IOWA TITLE GUARANTY SYSTEM AND MAKE RECOMMENDATIONS REGARDING HOW SUCH A SYSTEM COULD BE IMPLEMENTED IN NEW MEXICO.

     WHEREAS, the state of Iowa in 1947 outlawed the private sale of title insurance and since 1985 has issued title guarantees through the title guaranty division of the Iowa finance authority; and

     WHEREAS, Iowa's system offers the most affordable title protection of any state in the country, with a lender's title insurance policy costing one hundred ten dollars ($110) for up to five hundred thousand dollars ($500,000) of coverage and an owner's policy issued at no charge for residential property; and

     WHEREAS, in New Mexico, a lender's policy for five hundred thousand dollars ($500,000) coverage costs thirty dollars ($30.00) and an owner's policy costs two thousand four hundred forty-eight dollars ($2,448); and

     WHEREAS, under the Iowa title guaranty system, a policy purchased by a homeowner who is refinancing a mortgage costs ninety dollars ($90.00); and

     WHEREAS, in New Mexico, the discounts for reissue policies range from only twenty-five percent of the policy price for a homeowner refinancing within one year of purchase to ten percent for a homeowner refinancing three or more years after purchasing a home; and

     WHEREAS, the Iowa title guaranty nets an average of two million two hundred fifty thousand dollars ($2,250,000) annually for the state, which invests the money in affordable housing initiatives; and

     WHEREAS, New Mexico's title insurance system is too expensive for potential homebuyers and homeowners wishing to refinance mortgages, fails to adequately protect consumers and exports too much money out of state to national insurance underwriters;

     NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO that the insurance division of the public regulation commission be requested to study how a system similar to the Iowa title guaranty system could be implemented in New Mexico; and

     BE IT FURTHER RESOLVED that the insurance division be requested to report its findings and recommendations, if any, to the Mortgage Finance Authority Act oversight committee by November 30, 2009; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the superintendent of insurance and the chair of the Mortgage Finance Authority Act oversight committee.

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