NJ Title Insurer Class Action Lawsuit

UPDATE: On November 16, 2009, the U.S District Court denied the title insurance companies' motion to dismiss the Plaintiffs' breach of contract case. The court ruled that the title companies' Closing Service Letters ("CSLs") issued to borrowers are indemnification contracts meant to protect the borrowers against misappropriation of funds by the borrowers' settlement agent (attorney or title agency). The court further ruled that the protection provided under the CSL for any "misapplication of the Issuing Agent or Attorney in handling your funds" applies to overcharges for recording fees. The Plaintiffs in this case will now proceed and seek to certify a class action on their breach of contract claims.

This website provides information about a class action lawsuit to compensate consumers who were overcharged on recording fees when they purchased or refinanced residential real estate in New Jersey after January 22, 2003.    The case is currently pending in the U.S. District Court for the District of New Jersey.   The defendants are major title insurance companies.

The State of New Jersey sets the amounts that county clerks charge for recording deeds, mortgages and other documents signed during a real estate closing.   In most real estate closings the amounts of all fees and costs associated with buying or refinancing property are written out on a HUD-1 Uniform Settlement Statement. The HUD-1 Uniform Settlement Statement is a form created by the United States Department of Housing and Urban Development in accordance with the Real Estate Settlement Procedures Act ("RESPA").

The HUD-1 itemizes all costs and fees. It states, for example, the amount paid by a buyer to purchase the property, the amount of the realtor's commission paid by the seller, the amounts of fees charged by lawyers and title insurers, adjustments for real estate taxes, the amount paid in transfer fees, etc.

The HUD-1 is prepared by the "Settlement Agent" whose name appears on the first page. The Settlement Agent disburses the funds paid by the buyer.   The Settlement Agent is also required to truthfully and accurately disclose all fees, charges and disbursements made in the closing.   In most residential real estate closings the Settlement Agent is either an attorney, title agency, title closing service or title insurance company.

Line 1201 of the HUD-1 sets forth the amounts to be paid by the Settlement Agent to the county clerk to record the buyer's deed and mortgage.

This lawsuit has been filed on behalf of consumers who purchased or refinanced homes, condominiums and other residential real estate in New Jersey after January 22, 2003, and were charged more by the Settlement Agent for recording deeds and mortgages than the Settlement Agent actually paid to the county clerk.   In many cases these overcharges have been substantial.   The lawsuit seeks to reimburse consumers for the amount they were overcharged for these recording fees as well as attorneys fees and costs under New Jersey law.    The lawsuit also seeks to stop the defendants and the Settlement Agents from continuing to overcharge consumers for recording fees.

Potentially more than one million New Jersey consumers may have been victimized by these overcharging practices by the defendants and their Settlement Agents. The class of consumers that the lawsuit looks to protect include current and former property owners. Even if a consumer has sold his or her property since January 22, 2003 or has relocated outside of New Jersey, that consumer can still be a member of the class. If you purchased or refinanced residential real estate in New Jersey since January 22, 2003, and want to know if you were overcharged, click on the "DO YOU QUALIFY" link below. If you qualify and would like to provide information about your residential real estate closing, please click the "CONTACT US" button below and submit the requested information.

This website will be updated as further information becomes available.

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