FTC Staff and Justice Department Urge Massachusetts Legislature to Allow Nonlawyers to Compete with Lawyers For Real Estate Closing Services

Federal Trade Commission staff and the Justice Department today announced a letter urging the Massachusetts House of Representatives to adopt a bill that would enable nonlawyers to compete with lawyers to perform certain real estate closing services. According to the agencies, competition is likely to lower prices and enable consumers to receive better services.

The bill, HB 180, would amend the General Laws of Massachusetts to authorize nonlawyers to perform real estate closing services, such as drafting deeds, mortgages, leases and agreements; examining titles; issuing title certification or policies of title insurance; and representing lenders as their closing agents.

“As the staff analysis shows, HB 180 is likely to benefit consumers in Massachusetts by encouraging competition that leads to lower prices, more convenient services, and the option to use Internet-based loan services,” noted FTC Chairman Deborah Platt Majoras.

“The bill likely will lower prices for real estate closings for Massachusetts consumers in two ways,” said R. Hewitt Pate, Assistant Attorney General in charge of the Justice Department's Antitrust Division. “First, consumers will be able to choose to use a nonlawyer instead of an attorney for their closings. Historically, lawyers charge more than lay providers. Second, with competition from nonlawyers, lawyers’ fees are likely to decrease.”

The letter also pointed to state supreme court decisions and scholarly studies indicating that consumers are not likely to face additional risk of harm from nonlawyer closings.

The Commission vote authorizing staff to file the comments was 5-0.

Copies of the letter mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov, the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, and from the Justice Department’s Web site at www.usdoj.gov/atr. The FTC’s Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Ave., N.W., Washington, D.C. 20580, Electronic Mail: antitrust@ftc.gov – Telephone (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws, which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.

(FTC File No. V040025)