Kenneth R. Harney's The Nation's Housing for Sept. 17

When you spent $2,000 to $3,000 to buy title insurance and closing services on your home purchase or refinance, did you really know where your money was going?

Did you shop for competing prices? Or did you end up using the title, escrow agency or lawyer your realty agent or loan officer recommended?

Consumers' answers to these questions involve billions of dollars a year — $10 billion in title insurance premiums alone in 2010. Yet buyers and refinancers often don't shop for the most expensive item on their settlement sheets. They don't know how little of their premiums are actually paying for an insurance policy, and they're in the dark about who ends up with their money. These are not idle opinions — they're among the findings by the Government Accountability Office in a critical study of the industry and its practices.

But now, the landscape appears to be changing. The first direct-to-consumer national title insurer is offering 35 percent discounts off standard premium pricing and has been making steady inroads across the country. The first consumer-rating service solely devoted to title agencies — assigning rankings to competing firms on legal protections, services and prices — is in startup mode in Colorado.

A handful of agents in states where regulations permit discounts off closing packages are now offering them. Plus growing numbers of title agencies are preparing software platforms to provide services to consumers that have long been standard in other industries: online rate quotes, transaction updates notifying customers about the status of their title order.

Some are even emailing documents in advance of closings for customers' inspection, rather than hitting buyers with last-minute settlement surprises.

These may all sound less than extraordinary, but for the title and settlement industries, they are breakthroughs.

In contrast with other types of insurance underwriters, whose payments for claims represent a significant percentage of the premiums they charge, title insurers pay out only a tiny fraction, often less than 5 percent.

Most of the rest goes to the title and escrow agencies or attorneys who handle examinations of public records and "cure" problems they find in the chain of title, which the industry says keeps claims rates so low. Plus they conduct the closing, including document preparation.

For these services, title agents in many parts of the country pocket a big chunk of the premiums you pay — sometimes 75 to 90 percent. In a move expressly designed to disrupt this decades-old system, an underwriter called Entitle Direct, based in Stamford, Conn., has been selling insurance to consumers online.

Tim Dwyer, a former investment banker and insurance industry adviser, sees huge potential in a field that historically has had minimal price competition.

"Title insurance is an overpriced product," he said. "Our mission is to provide a more efficiently priced (policy) with the same coverages" but without the traditional middlemen. Entitle emphasizes "transparency from start to finish," he said.

In Denver, Garry Wolff is launching a different type of reform. He has created an online venture called myTitleIns.com that plans to offer consumers rankings of title agencies and price comparisons. His main obstacle, he says, is opposition from title agencies who prefer the old way of attracting customers.

In scattered locations around the country, independent agencies are also rejecting the affiliated business model and are offering discounted costs to consumers. In the metropolitan Washington area, Federal Title & Escrow Co. provides up to $1,000 off total closing costs for homebuyers who use its online "Real Credit" software platform for their transactions.

Even among traditional title agencies, there is a push under way to improve transparency — more educational content on websites and customer updates during the title and settlement process. Anne L. Anastasi, owner of Genesis Abstract LLC and 2011 president of the American Land Title Association, says her firm will shortly debut an online client update platform.

As an industry, she says, "we've got to move in this direction."

At least.