| Radian Lien Protection Banned in California
ALTA applauds ruling; Radian to appeal July 23, 2003 By ANNE LINEBERRY |
| An alternative to title insurance has been prohibited from sale in California.
Radian Lien Protection, a product offered by Radian Guaranty Inc., has been embroiled in controversy and the subject of lawsuits. The California Insurance Commission upheld a cease-and-desist order, finalizing the ban of the product. Commissioner John Garamendi had stayed one order so that he could further study the product, according to the department. The American Land and Title Association (ALTA) issued a statement in favor of the ruling. “We applaud the Commissioner’s decision affirming the appropriateness and legality of the cease and desist order against Radian, which protects consumers against unregulated, unlicensed title insurance products,” said James Maher, executive vice president of ALTA. “Radian should become a licensed title insurer to issue this product and submit to the regulatory oversight that is in place to safeguard consumers.” According to Garamendi, his final decision was based on a California rule that prohibits a company from selling both homeowner’s insurance and title insurance. “Although Radian and some of the parties that submitted briefs on its behalf argue that the Lien Protection Policy is less expensive and therefore better for consumers, I am satisfied that this product falls within the definition of title insurance as established by the Legislature. Therefore, unless the law is changed, I am obligated to uphold it by prohibiting the sale of these policies,” he said in a statement. Radian Guaranty Inc., which sells mortgage insurance in California, issued a statement saying they would appeal the order. “We are disappointed with Commissioner Garamendi’s decision, and we respectfully disagree with his assessment of our product,” said Radian’s executive vice president and general counsel Howard S. Yaruss. “Radian, along with various consumer groups, will take this fight to the California State Legislature, in order to break the title insurance industry’s monopoly and put an end to years of price gouging.” |
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Anne Lineberry is MortgageDaily.com‘s editor. She previously worked as an online editor/producer for DallasNews.com and on the Metropolitan desk for the print edition of The Dallas Morning News. Email Anne at AnneLineberry@MortgageDaily.com |
