05.12.08
Posted in Education at 11:20 am by Jeanne
A small group(15 of us) gathered for two days last week to go through the annual MN “Principles of Abstracting, Searching and Land Records Management” seminar. Three County Recorders, one auditor-treaurer, one Indian Reservation, 3 abstractors, 2 IT software professionals who work with land records, 4 title insurance people and me. The group was really a quick study. I have never moved so seamlessly through a class, especially teaching legal descriptions, where I could read a line, and the class drew the description as we went along - WOW!
Comments on the program evaluation were excellent, including my favorite - “Stangely enough, I will strongly recommend this class to others…”
Thanks everyone. I enjoyed your comraderie and hope to see you all again!
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05.03.08
Posted in Industry News at 2:36 pm by Jeanne
I sometimes feel that life in the title industry is like life in a soap opera! Times are always either TOO good or TOO bad. We are always looking to hire, or looking to fire. For those who follow the Title Industry as a whole, lots of news arrived May 1st as the status of the industry swung once again the 1st quarter. There were a few positives and certainly many signs of corrections made. Here are some updates:
TradingMarkets reported that Title insurers as a whole again saw significant job declines, down 12.1% from March 2007 to 87,100. Title insurance employees saw weekly earnings fall 5.4%
HousingWire said LandAmerica posted a net loss of $24.2 million in the 1st quarter. The company cut 300 employees during the quarter, and has cut staffing by 25.4 percent of staff since the start of 2007. The company’s lender services division, that houses default outsourcing businesses, posted pretax earnings of $10.1 million, with increased demand for its lien monitoring, appraisal, foreclosure and reconveyance services as a driving factor. No surprise here. Meanwhile, it reports Stewart Title revenues at fell 25.9 percent, driving a net loss of $22.3 million for the first quarter.
However, First American posted a small profit in spite of the fact that its revenue fell 22 percent. Factors contributing to the poor revenue stream were the obvious decline in the number of title orders closed, decreases in the average revenue per order (housing prices are dropping after all) and the reduction of certain agency relationships (certainly a good thing.) On the other hand, profitable results demonstrate that the company made deep cuts to its expenses in the 1st quarter including salary and other personnel costs, which, according to PRNewswire, were down 26 percent from the same quarter of 2007. Also, First American’s information services group, that supplies information on defaults also had significant increased volume.
Yet, Demotech, reports that the financial solvency of the industry as a whole has rarely been better saying
2007 results provided dramatic observations for the Title insurance industry, with premiums decreasing by 14 percent as losses increased 32 percent over 2006 results. While the recent financial challenges are not to be minimized and recent forecasts point to a long and slow recovery, from a historical perspective, the Title industry remains near its peak. Since 1995, the industry increased its Direct Written Premiums and Policyholders’ Surplus an unprecedented 228 percent and 129 percent, respectively. This broader perspective reveals a cyclical industry in a down cycle, but also reveals an industry that is maintaining exceptional financial stability and is still near record performance.
For those of us who have seen the pendulum swing over the last 35 years, this swing in the market is nothing new. However, we have never seen mortgage defaults at such extremes, or the immediate horizon so bleak. Many in the trade will move on to other occupations – by choice, or not. Much of this will actually improve the industry, by weeding out the week and inexperienced, and illuminating for Underwriters those title agents who were problem children because of their ethics, or rather lack of ethics. Have we hit bottom yet? Who knows, probably not. It still looks depressing out there. But, being an optimist, I look forward to a sunrise with better times. As the proverb says…and this too shall pass.
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05.02.08
Posted in Don't underestimate a title searcher! at 3:21 pm by Jeanne
A federal bankruptcy judge in Massachusetts sanctioned two law firms with $150,000 fine for incorrectly claiming that their client owned a mortgage that had been reassigned at least twice according to the ABA journal
The judge found that lawyers at both law firms, had continually represented that Ameriquest was the holder of a mortgage, when in fact it had been assigned to Norwest.
The judge held:
“At a time when mortgages and notes are bought and sold at a pace so swiftly that the assignor and assignee cannot keep up with the paperwork, had the attorneys at the firm checked the firm’s file, they would have seen that Norwest was perhaps the real party interest. . . . The firm cannot shield itself from institutional knowledge.”
I have to agree that it is pretty difficult to keep track of who’s on first right now. With all the foreclosures, assigning of mortgages, and documents under wrap inside of MERS, who knows who’s on first. And with the phenomenal volume of foreclosures these days, the attorneys, it seems, seem to be cranking them out like hotcakes. Foreclosures are NOT that simple, that they should be turned over to inexperienced staff. It makes it especially important, I think, for law firms to rely on abstractors and title companies to at least get the latest correct information as filed at the Courthouse.
In a related event, A Wall street journal blog, says a bankruptcy judge admonishes that Wells Fargo “turned all responsibilities over” to a mortgage servicer and was willing to “turn a blind eye” to the servicer’s mistakes. Had WFC” shown even a modicum of oversight or review” of the servicer’s behavior, “it should have been able to correct the misrepresentations” made to the court. He stated “This court will not allow Wells Fargo or any other [mortgage holder] to shirk responsibility by pointing fingers at their servicers.”
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04.21.08
Posted in Damage to Title Industry, Don't underestimate a title searcher! at 9:53 am by Jeanne
I believe in automated title plants. They are a good thing. Not to have to drive to the Courthouse every day, not having to physically handle musty, dusty, not to mention heavy old books. Not having to pull microfilm, aperture cards, paper copies, all of which deteriorate as they are handled. Not to worry about natural disasters - like fires and floods that wipe out public records. These are all good things.
But I hold the line when a company, like TitleEDGE, advertises it can provide:
“complete automated searches and preliminary examinations via a variety of title and foreclosure products in an average of five minutes. These results include the chain of title, general or name index, taxes maps, and other items are then, according to the company, “reviewed by a qualified title professional and delivered to title company customers in as little as 15 minutes.” After a review by the title company, the completed title product can be delivered to their customers in as little as one hour.
Once again, it would appear that whomever is using this product is providing casualty insurance. Yes, you can tell me that a competent title search, one showing all easements, restrictions, judgments, special assessments and dozens of other potential hazards is available in 5 minutes, but I do not believe it. I know from experience, a good title commitment and policy require significantly more oversight than that. It makes me angry to suggest that a 5 minute title commitment is accurate and true. What is true, is that the resulting product is a weak, cheapened version of what was a formerly strong, healthy title insurance product.
Why not admit it, creators and users, that the goal of this product is to simply keep costs down, and give faster delivery time. Keeping costs down and fast delivery are good things! Things a computerized title plant can offer. However, the claim of “improved accuracy,” in a title commitment? Now that is a fallacy. A good title product requires spending time to LOOK at each of the actual documents. That is the POINT of the recording system, to put in writing the intentions of the buyers, sellers, lenders, easement holders, etc. etc. etc. If you do not take a GOOD look, and use your noodle to figure out what is missing or wrong in the picture when examining title, the work is worthless.
I applaud those title agents and underwriters who take time to thoroughly LOOK at the documents, the good old-fashioned way…those who use their knowledge and expertise to put out a worthy product. We know legal documents contain a wealth of important information for our clientss and we need to inform our customers of what those complex documents mean to them. But, those who endorse and use of Five Minute Title Searches - beware. You will suffer mightlily with higher claims and your customers will suffer too.
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04.20.08
Posted in Industry News, Mortgage and title Fraud at 12:56 pm by Jeanne
Thieves knowledgeable in searching the public record, and recording documents, secretly stole title to 25 vacant parcels by searching the land records, creating matching documents, forging signatures, and recording them. The fraud workers transferred properties worth more than $23 million from the rightful owners into names of “straw” buyers. One of the Counties involved says it received about 1,000 complaints about deed forgeries on properties in the last few years. Although the district attorney’s office in Riverside County, CA successfully prosecuted the forgery ring, the rightful landowners learned that it takes a lot of grief, money and time to undo a phony transaction once filed with the county recorder. Albert and Joy Rivera, scammed owners of the real estate with forged deeds filed to a straw buyer, said they feel lucky that they got their land back six months ago after 3 stressful years and paying out $20,000 in lawyer fees.
Among eight defendants who pleaded guilty in the fraud cases, the notary was sentenced to prison for 3 years, 4 months, while the real estate agent who helped to find vacant parcels, got 9 years, 4 months. The last defendant, thought to be the instigator, got 15 years 4 months in state prison as his sentence.
Los Angeles County, CA has obtained legislation to notify residents when deeds are recorded against their property. “I think we have a very successful program and it is a good model for other counties to implement,” said Mr. Herrera, director of the Los Angeles County Department of Consumer Affairs. The legislation allows charging a fee to fund the program.
Another remarkable story for WHY people should purchase a title policy. To see the more details of the story see FRAUD CASES
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04.16.08
Posted in Industry News at 6:31 pm by Jeanne
A 3 question survey has been sent out to about 300 of our “regulars.” The questions are to try to give us some sense of the market at this moment. The questions are:
1. Which of the following categories best describes the industry you work in? (Check all that apply)
Independent Abstractor
Independent Closer
Consulting Services
Education
Financial Services
Government Services
Information Technology
Marketing/Sales
Non-Profit
Public Relations
Technical Services
Title Insurer/Agent
Other
2. What best describes your employment status?
Employed full-time
Employed part-time
Self-employed
Not employed, but looking for work
Not employed, not looking for work
Retired
Student
Military
Homemaker
Prefer not to answer
Other _______________
3. What best describes your current employment condition?
Currently looking for qualified personnel
Have adequate staff
Need to cut hours of staff
Need to lay off staff
Have laid off staff
Have laid off staff, may need to lay off more staff
With Just a hand full of responses so far, it’s not as bad for us as I had expected!
The first 12 responses are as follows: 11 Abstractors, 1 Title Agent;
all 12 employed Full Time; 3 Looking for Qualified Staff, 5 with adequate staff and 4 are one person operations. Keep the answers coming in. It is encouraging!
To get the numbers as they roll in follow this survey link
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