Sky-high closing costs for buying — or refinancing — a home in New York are about to be cut sharply under a plan Gov. Cuomo will unveil in his budget Tuesday, The Post has learned.
The governor will propose legislation allowing the state Department of Financial Services to slice title-insurance fees by 20 percent for new home purchases and by more than 60 percent for refinancings, sources said.
Homeowners in New York state take a shellacking every time they go in for a mortgage.
They pay an average of $5,435 in closing costs on a $200,000 home, compared with the national average of $3,754 — a difference of more than 30 percent, according to bankrate.com.
If Cuomo gets his way, costs in the downstate region would drop by an average of $823 for new home closings and an astonishing $1,873 for refinancings.
The savings upstate would be more modest, averaging $358 for new homes, and $407 for the refinancings.
Under the governor's plan, Financial Services would for the first time license title-insurance agents, just as it does all other insurance agents and brokers.
New York is one of only two states — along with Kentucky — that doesn't regulate title agents.
State officials say extra oversight can't come quickly enough.
A recent probe by Financial Services Superintendent Ben Lawsky found that insurers and brokers secretly added the cost of pricey meals and entertainment for lawyers and agents who steer them business into their bills for title searches.
Among the outrageous padded bills was a $1,675.14 dinner at Nobu, one of the city's top restaurants. The new Cuomo licensing proposal would require that agents have minimum qualifications and undergo regular training.
The state would have authority to monitor abuses and to yank licenses.
The reform plan also would beef up anti-kickback penalties to deter pay-to-play practices and overcharging.
Lawyers and brokers who are gaming the system won't be too happy.
They'll have to disclose affiliated business arrangements so that clients are aware when their attorneys and brokers are getting referral fees from title agencies.In other budget matters, Cuomo and state Attorney General Eric Schneiderman reached a truce Monday on how to spend part of a $613 million windfall from a housing foreclosure settlement with JPMorgan Chase.
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