07.31.07
Your Title Policy - Does it Tell the Whole Truth…?
In researching the book “Title Insurance for Real Estate Professionals” for Dearborn Real Estate Education, I contacted ALTA, asking for updated claims data. I had an old Pie Chart showing claims history by category from a major Underwriter from the 90’s, but it was outdated, and I wanted new data. ALTA verbally told me that the Underwriters “had collectively decided to no longer share that information.” (They did not wish to put that statement in writing.)
I for one would love to know what is causing claims. I would rather learn from someone else than the hard way - by making the mistake myself!
I am not sure what the Underwriters are hiding, but my guess would be that some (many?) of the Underwriters and Agents have blatantly bought into a wholesale disregard for good abstracting and title underwriting standards.
As the market demands Faster, Cheaper, many seem to have decided to cut costs by basically “not telling the whole truth” about the title. By merely giving a cursory sketch, they can simply use a current owner search, done cheaply offshore in many cases. They can then use pure risk underwriting, and when errors come up - as they do in one out of three cases, says ALTA, they can just give each other “insured closing letters,” guaranteeing, that if the problem rears its ugly head before the expiration date of the lien (or whatever the problem is…)the first company who made the mistake (and gets caught) will fix it.
The sad thing for those of us who are abstractors and title searchers, and understand the business, is that the consumer is no longer informed about easements, restrictions or other key data, because the policies are being done from a last record owner search.
I, for one, want to know “the whole truth” about the title and what I am buying. I believe that we as an industry are getting a black eye, and the consumer is getting the shaft with a poor quality product by NOT telling the whole truth… and all for the almighty buck.
Your comments would be appreciated!