Overvalued!

• Ask for references. "I would ask if they have banks or credit unions they're working for," Hummel says. "They'll typically hire the competent appraisers."

• Be wary of out-of-area appraisers who aren't familiar with your neighborhood. Go online and figure out the sale prices of homes nearby.

"I'd say most [appraisers] are trying to do the right thing," says Charles Drecksler, a Marietta, Ga., appraiser. "But you have those who are skirting the issue."

From coast to coast, the arcane world of title insurance is coming under intense scrutiny amid allegations of kickbacks and overpricing. One major title insurer has agreed to refund millions of dollars to customers nationwide, and several large insurers face investigations in several states including California, Florida, and Colorado.

The main charges involve alleged kickback schemes involving insurers, real estate brokers, lenders, and homebuilders. Questions remain about whether insurers charged too much for too little.

Title insurance is designed to protect homebuyers and lenders if a property is linked to past problems. If the title company misses a problem that's discovered later, the insurer provides reimbursement in the event of a loss. Problems title examiners search for include liens - essentially IOUs to the government for things like unpaid taxes or parking fines. Issues may also arise when a previous owner sells a house without a co-owner's permission, or someone makes a belated probate claim on the property. "These are things that happened in the past that should have been caught, but were not for one reason or another," says Lorri Ragan, spokeswoman for the American Land Title Association, which represents title insurers.

Depending on the size of a mortgage, title insurance can cost from a few hundred dollars to more than $1,400. In some states, especially on the West Coast, homesellers pay for the insurance, says Ms. Ragan. On the East Coast, it's more common for buyers to pick up the cost, she adds.

In recent years, title insurers have begun seeking reinsurance, essentially a form of insurance for insurers. While reinsurance helps insurers spread their risk, some investigators wondered if it was necessary in the title insurance industry, where the number of claims are low and premiums are high. Obtaining reinsurance when the risk of claims is low is "like paying someone $100,000 for an insurance policy when everyone knows there won't be a single claim," says Peter Rousmaniere, a consultant in Woodstock, Vt., who writes about title insurance.

Title insurers pay claims on only about 5 percent of their policies, adds Norman Williams, a spokesman for the California Department of Insurance. To make matters more suspicious, some reinsurance companies were in partnerships with lenders, brokers, and homebuilders. California investigators allege that they steered their customers to title insurers in return for half the premiums. "It was a quid pro quo, a kickback," Mr. Williams says.

Ragan of the title insurance trade group declined to comment about the accusations against several major title insurers. The companies have reportedly denied wrongdoing, but some have stopped their reinsurance operations, and one, First American Title Insurance, is paying $24 million in refunds to customers nationwide as part of a settlement with the state of Colorado.

A First American spokesman wasn't available for comment. But a company official told the Arizona Republic newspaper that the payments were "the right thing to do. We want to put it behind us and take this step."

Meanwhile, First American announced that it's instituting a standard rate for title insurance for refinancing in California. In a statement, the company said the rate should result in an average price drop of 30 percent.

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