The Real Estate Attorneys Coalition for Housing (REACH) has released the results of an new study that calls into question the assertions of the Federal Trade Commission (FTC) and Department of Justice (DOJ) that attorneys charge more than non-attorney settlement agents to close residential real estate loans, and that state regulations limiting the provision of settlement services to lawyers increase the costs to consumers.

The study, which was directed by Michael Kemp of CRA International (CRA), a leading global economics and business consulting firm, is based on a detailed survey of 1,260 residential borrowers across the country. It finds that closing costs are influenced by a wide range of factors, and that it is rare either for the type of firm performing the settlement or for regulatory considerations to be the most important influences on costs. These results do not provide support for the FTC and DOJ position, set out in widely circulated letters and amicus briefs, that contends that regulatory regimes such as "unauthorized practice of law" rules are anti-competitive and result in higher costs to consumers. But the new study's findings are consistent with previous research performed by HUD and the Veterans Administration in 1970 and by Peat, Marwick, Mitchell in 1980.

Unlike the much more fragmentary empirical evidence cited in the FTC/DOJ letters and briefs, the REACH study is based on a carefully designed survey, using a randomly selected, nationally representative panel of individuals maintained by Knowledge Networks. The survey was completed on-line and required the respondents to enter information from the Uniform Settlement Statements (Forms HUD-1 or HUD-1A) used in their purchase or refinance transactions. The data collected from the borrowers were analyzed using standard econometric methods to explore how variations in the reported closing costs relate to the characteristics of the transaction, the characteristics of the borrower, and the characteristics of the geographic region (including, importantly, the regulations about who may legally provide settlement services).

The members of REACH include: Attorneys' Title Insurance Fund; CATIC^®; North American Bar-Related^® Title Insurers; Real Estate Bar Association of Massachusetts; Attorneys' Title Guaranty Fund; Illinois Real Estate Lawyers Association; Professional National Title Network; and the General Practice Section of the American Bar Association.

About CATIC

CATIC is the major operating subsidiary of its parent holding company, CATIC Financial, Inc. CATIC is New England's largest domestic and only Bar-Related^® title insurance underwriter. The Company has seven offices throughout New England and issues its policies through a network of more than 3,000 attorney agents.

CATIC is currently licensed in Connecticut, Massachusetts, Rhode Island, Vermont, Maine, New Hampshire and New Jersey. The Company is an underwriting member of the American Land Title Association (ALTA) and the North American Bar-Related^® Title Insurers. Through an affiliate, the Company also provides services in connection with tax-deferred exchanges of like-kind property.

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