11.12.07

Are Artificial Intelligence and Outsourcing our Competition?

Posted in 60 second title work at 5:00 pm by Jeanne

The Real Estate Market has crashed. Most of our abstracting, searching and examining work is now foreclosures or other serious title problems. The Title Underwriters have cut their biggest expense – staff. So there should be some opportunities for us. Why - because Underwriters LOVE volume-related expenses – i.e. if they don’t have an order, they don’t have the expense.

But it seems to me that the Big Five have changed our Industry. They are no longer looking for the quality many of us are used to providing. (Funny, we thought quality work done in the best interest of the consumer was our goal. We thought identifying and solving problems to keep title losses low was the goal.) But our Underwriters have become risk underwriters, not risk-avoidance underwriters, and they are looking for cheap. While they don’t openly advocate cheap, they are quietly changing to overseas outsourcing.

To be honest, for some reason, I don’t have a problem with Title Plants being posted outside the U.S. so long as- it is just the Indices; the actual documents are available online to look at; and the quality of work is good. Perhaps I am a fatalist. After all, Public and Private Title Plants all over the US have successfully been posted outside the Country for years. The County Administrators point to the cost savings and the volume-related expense. And I remember times when the Public Record in the Recorders office was behind, like way behind, like a year behind. That was a nightmare. So, posting it outside the Country caused them to catch up and stay caught up. That is good. Original Document copies were sent via internet, input (overnight US time) and returned the next day. Fast is good. Quality – not too bad. Perhaps not as good as done by seasoned staff, but current. And that is worth a lot, especially in the crazy market we had. And, as county administrators advised, it meant recording fees did not have to continue to rise, and they did not have to fight for tax increases to keep hiring and training staff to keep up with the heavy-volume market.

But now I see the fairly simple mass data input being combined with “Artificial Intelligence” (AI) where some believe a computer can ID the problems from the data input records to do most of the underwriting and create title work. Enough so that they claim they can do most titles without needing human intervention, or at least minimum human intervention. So back comes the outsourcing. It would seem to me that using staff in India, China, the Philippines in combination with AI are taking our profession down a new path. I do not believe that quality title abstracting, title searching, title examining, or title insuring can be done in 15 minutes by artificial intelligence with a minimum of oversight. Quality can only be accomplished with the human intervention of someone who is extremely familiar the specific location of the property being searched. There are just too many State, County and Municipal issues. What is customary in one state is a problem in another. Laws vary, laws change. Title Standards vary and change. The use of Artificial Intelligence, Outsourcing title abstracting and exams, and Title work in 60 seconds is an insult to the industry and damnation of the product.

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