06.06.08
Posted in 60 second title work, Industry News at 3:46 pm by Jeanne
The future of a Title Plant is no longer in Title Insurance; it is in Real Estate Information (REI). Real Estate Information is a huge market, much bigger than title insurance. After all, real estate is our country’s biggest asset by far. Every day we see examples of farming REI - First American just signed a contract with the SBA to develop a way to farm information to quickly identify properties and owners in a flood, hurricane or other natural disaster. On June 4th, Prudential launched free property-valuation and property-profiles for consumers on its new web site where one can simply key in a residential address to get property data. However, besides the standard deed, mortgage and judgment information found in title plants, census information has been added on neighborhoods by zip code. This includes meaningful data that really tells you about a neighborhood: median age; percentage of homes rented vs. owned; average family size; average salary; average household income; home values; taxes; year built; amenities; density of housing; distance to colleges; average education of people in the zip code (% with hi-school, college or post grad); climate by month; and much, much more. Everything you want to know about that new house and you are considering.
By taking advantage of technology and implementing direct operations with vastly expanded and consistent data, underwriters can still produce title plants, but no longer just for title insurance, but rather to farm and package Real Estate Information for all sorts of needs. Finding new uses for the information and selling that information, title plants have become not a burden, but a piece of a serious REI revenue making machine. And, by replacing agent data with underwriter REI technology and owned branches, the insurers are building a long term solution both to off-setting the expense of the old title plant, and to the challenge of staffing, because fewer personnel can now be busy mufti-tasking. One minute producing title commitments and policies, the next minute putting out a report for a Credit collection agency of the judgments recently recorded that need to be collected. Underwriters can use REI to help control costs and to improve revenue. As I have said in the past – that is their job. They owe it to their stockholders to control costs and to make money.
REI companies make sense. Technology can and does do remarkable and wonderful things for us every day. So, if you are still running your title plant like you did 20 years ago – with books and paper; by going to the courthouse to get name searches and taxes; if you are still using microfilm; you better give it up –NOW. Think about what you have, or you may be putting yourself out of business.
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06.05.08
Posted in 60 second title work, E-recording, Value of a title searcher at 4:54 pm by Jeanne
As is typical of our industry, we are always engrossed in something. Currently the talk is potential RESPA changes, Fraud, and the Woes of a Weak Market (along with that age old fist-fight about the fairness of aba’s of course.) And these issues certainly do affecting our day to day business lives. But the relationship between the non-affiliated agent and his or her underwriter is a much bigger long-term issue for the agent. Independent agents, who think they can not be replaced by national REI plants, captive agencies or your Underwriter, beware.
I started in the title business in 1976. We believed then that abstracts of title were doomed and could be replaced at any moment with title insurance, or something else. We were right – it just took about 20 years longer than we thought. (Things changed a lot slower then.) In those days, the insurer insured the policies and the agent brought in the business and sold the policies. Today, with technology, things are changing at warp speed. The Underwriter is completely in the driver’s seat and there is no choice, title agents, so get used to it.
Insurers have changed the way business is done. The public wanted title work faster and cheaper. The insurers accommodated the public. Experienced, long-term agents with high quality standards were forced to undermine their standards in order to compete. The thorough, thoughtful search of the past is gone, replaced by a quick and dirty rendition put out with a cursory title search, i.e. risk underwriting.
The independent agent that was once the cornerstone of the title industry is disappearing, partially due to the surge in affiliated businesses that shepherded the business away; partially due to a very poor market; and also because Underwriters have been growing by gobbling up agencies and turning them into branches. Underwriters today are no longer dependent on local agents. The days of title underwriters worrying about quirks in each county are gone, again, risk underwriting. And in the future they will be even less dependent, as technology and electronic recordings allow information to be recorded and made available within minutes, perhaps even with little human intervention. Moreover, due to high agency defalcations and the claims in the last few years, it makes sense. Underwriters can have more control over day to day operations. Plus, by replacing an agent’s traditional title plant with the underwriter’s superior Real Estate Information (REI) technology, adding flood information, tax information, assessor information, maps and more it becomes salable as many products instead of one.
Yes, I believe the days of the independent, non-affiliated title agent are limited. But then again, I thought abstracts would be gone overnight, and it took 20 years.
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04.21.08
Posted in 60 second title work at 4:59 pm 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, heavy old books. Not having 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 moving towards 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. A good title commitment and policy require significantly more oversight than that. It makes me angry to suggest that a 5 minute search is accurate and true. What is true, is that the product spit out is a weak, cheapened version of what was a formerly strong, healthy product.
Why not admit, 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, However, the claim is also “improved accuracy,” and 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, the work is worthless.
The hands-on method is still the best. I applaud those who take the time to LOOK at ALL the information. Underwriters and agents who endorse use of such Five Minute Title Searches beware. You will have higher claims, and ultimately both you and your customers will pay an enormous price.
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11.12.07
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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10.03.07
Posted in 60 second title work, Value of a title searcher at 4:17 pm by Jeanne
I was talking to a very seasoned contract title examiner recently (one who has been in the business of doing overflow exams during the refi-season as well as difficult sale exams for many years.) He works for a variety of Title Agents, who underwrite for each of the major underwriters. He was saying how difficult it is to keep track of how each Agent wants their title commitments done. Apparently each claims that their Underwriter has different standards on how to examine title. Some never examine behind a recorded plat. Others go back 2, 3 or 4 owners. Some want 40 years on a sale, but only 2 owners on a refinance. Others just categorically ignore easements and restrictions (even on a sale) and only look for and show liens.
What has the industry come to? In talking with Title Insurance Agents across the country, and with independent contractors for those agents, it is clear that liberal shortcuts are being taken (I am told, with the sanctioning of the major title underwriters) when examining titles and almost everyone is confused. I personally think that the search standards have become too weak, and that Underwriters and Agents alike will likely pay a price for the lack of quality coming out in title policies. A few years ago, ALTA said that one in 6 files had title problems, and then it changed to 1 in 4, then to 1 in 3. (They no longer declare how many files have problems.) When is the last time you picked up a file without a title problem?
There is clearly confusion among Title Agents – where do the Underwriters stand? There is no consistent message. What do you think is most important to you and what do you think is most important your Underwriter: Bringing in every possible deal so you have enough volume to keep your Agency Contract (even though your gut says “should I really be doing this or working with this customer?”); Turning the product out within 24-48 hours (regardless of quality?); Keeping fees low but high enough to make a profit(and what about RESPA and fee mark-ups?); Cutting long-time seasoned staff and contracting out exams to perhaps less competent staff to keep expenses volume-related(Ouch)? It’s a conundrum.
The Underwriters have been slow to tell us their long-term wishes and plans or us. Some wonder if the Underwriters aren’t trying to force out small Agents and replace Agents with Super-inexpensive contract staff from overseas – it is certainly happening.
I think it would be most helpful if the Underwriters would admit that in this day and age they are no longer trying to find and eliminate problems. Title Insurers have rather become a risk-underwriting type of insurance. The Underwriters’ real focus seems to be keeping expenses as low as possible. But tell us, please, if that means we should take short-cuts in abstracting and change the way we old-timers were taught to do business. And tell us, please, that if you will be using off-shore staff to post title plants, what does that mean? We need to know where we fit in.
It is clearly incomprehensible that with the 3,000+ counties in the U.S. and the hundreds of thousands of places to search (with probate, taxes, assessments, Courts, Cities, Townships, hundreds of types of judgments found in all sorts of locations, that the classic American abstractor that we have known for decades will be obsolete. No, I can’t believe that.
But we are scared and confused. We don’t understand. Please Explain.
Your Thoughts and Comments Appreciated….
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01.29.07
Posted in 60 second title work, Don't underestimate a title searcher!, Value of a title searcher at 12:24 pm by Jeanne
WHAT IS THE REAL MESSAGE of “Title work in 60 seconds” - FAST? EASY? CHEAP? HOW ABOUT INFERIOR?
Are you selling yourself (the small title professionals) out? Do you make your work sound simple and cheap? Reality is that those who do the real work know it is not easy to provide a complete and accurate report on title. But complete and accurate is NOT what is being asked of us these days. Lenders only seem to want faster and cheaper - “just give us the name on the last deed of record” - sound familiar?
What has happened to the interests of the little guys - yes, that’s YOU - whose most important assets are your business and your home? Doesn’t anyone CARE anymore? Professionals who care need to band together to let the media and the consumer know what is happening, not just lay down and take the beating.
You have a valuable product. You are a professional. What you do matters to you and others.
Jane Doe and You NEED TO KNOW what you are getting when you pay good money for your house and take out your big mortgage. What are your taxes and assessments? Do you have to pay homeowner dues each month? Where are the easements on your property? Are their restrictions on my house - er, what do you mean I can’t take FIDO with me …or park my Company van outside?
The ony way to protect your biggest investment is to do GOOD, SOLID, RELIABLE, TITLE WORK, and NO, that does NOT mean fast, easy,cheap or inferior. Wake up everyone. This is a wakeup call for YOU the consumer, and YOU the title professional. Spread the word - your work is important!
See what other talk is on the web about Sixty-Second Title Work.
http://radicaltitletalk.blogspot.com/
http://title-opoly.squarespace.com/
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