Licensing

Title Insurer Held Liable for Title Agent’s Actions

Insurance Journal (05/03/10)

Thurston County (Wash.) Superior Court Judge Paula Casey has ruled that the state insurance commissioner may hold an insurance company liable for the actions of the company’s appointed agent. “If you allow someone to do business on your behalf, it only stands to reason that you can be held responsible for what they do,” said Washington state Insurance Commissioner Mike Kreidler. In an April 23 order, Superior Court Judge Paula Casey ruled that Chicago Title Insurance Co. could be held responsible for illegal inducements offered to solicit title insurance business by one of its appointed agents, Land Title Co. of Kitsap County Inc.   Read full article at Insurance Journal

Annual Principles of Abstracting Class slated for May 4-5

The annual Minnesota “Principles of Abstracting and Land Records Management” two day course is being offered on May 4th and 5th in St Paul, MN at the Country Inn and Suites. The course is designed for County Recorders, Title Insurers, Abstractors, and those who deal in land titles. Participants have included Homeland Security professionals who place towers on various sites, Dept of Transportation professionals who deal in Right of Way projects, Bureau of Indian Affairs, and various Utility companies that place easements such as Excel Energy and  Comcast.

The two day course will help prepare attendees to improve their land title search skills, stay in touch with changes in laws, or prepare for the state abstractor licensing examination.  Topics this year include foreclosures, short searches and comprehensive name searching. You can register by mail or online at http://www.landrecs.com/pages/seminar-list.php

MN Dept Commerce Takes Action against Embezzeling Closer

Used with Permission of Robert Franco, Source of Title
The Minnesota Department of Commerce has summarily suspended the real estate closing license, resident insurance producer license and Notary Public commission of Kuntee Singramdoo and charged her with embezzling over $230,000 in real estate closing proceeds and using the money to pay off her own creditors or her family members’ creditors.

Singramdoo, a resident of Lakeville, was an independent closer hired by Walsh Title & Real Estate Services, where she provided real estate closing services, sold title insurance policies and notarized real estate documents. The Commerce Department complaint alleges that Singramdoo engaged in a pattern of misappropriating, converting and/or embezzling settlement proceeds by issuing Walsh Title checks for her own benefit or for the benefit of her family members.

The alleged embezzlement includes at least 184 checks issued between February 2004 and June 2007 to 24 different creditors including $68,109 to U.S. Bank, $48,863 to Wells Fargo, $800 to JC Penney, $4,764 to Macy’s, $6,286 to Goodman Jewelers, $800 to Bloomingdale’s, $6,866 to Honda, $2,734 to American Express and $2,323 to Discover.

Singramdoo admitted under questioning from Commerce Department investigators that she embezzled the funds but at this time has only paid back $10,000 to Walsh Title.

Singramdoo accomplished the embezzlement by entering her own creditors on the HUD-1 mortgage loan form as if the debts belonged to the buyer or seller and subsequently issued checks directly to the creditors in her name. She also changed HUD-1 mortgage loan documents after closings to reflect the fraudulent payments.

“This brazen embezzlement scheme is a warning to everyone to pay close attention to the loan documents you are signing during the closing of a mortgage,” said Glenn Wilson, the commissioner of Minnesota’s Department of Commerce.

Real Estate Titles US – Inexpensive Title Education

A new online education company, RealEstateTitles.us (RETUS) has been formed specifically for title professionals. Its purpose is to provide high quality, inexpensive education for those involved with real estate titles. That includes: Closers, Abstractors and Title Searchers, County Recorders, Real Property Attorneys, Title Examiners, Title Agencies and Title Insurance Underwriters. The company offers primarily Professional Development courses for its customers, as most states have no education requirements for these professionals, but also offers some continuing education classes for those states that require CE. Additional License and Pre-license courses are planned for the future.

“RETUS Online courses provide quality education at lower costs for the consumer, as they don’t have to spend money for hotels, meals or travel, and they have the flexibility of working on their own timeframe. Even 15-20 minutes can be very worthwhile in studying important title concepts- and they can enter and exit courses as time allows.” 

The online courses have all been prepared by subject matter experts in the land title field, some being written or edited by Jeanine W. (Jeanne) Johnson. Courses coming soon include

  •  “A Settlement Agents Guide to Closing,” which will cover the full spectum of closing, including the newest changes to the HUD-1 Settlement Statement;
  •   “Introduction to Title Insurance and Land Titles,” that gives a history of title insurance and is a primer of key concepts in the title industry;
  •  “Real Property Ownership and Land Title Use,” which covers legal descriptions, platting, land use controls, rights of the government in planning. Especially helpful in dealing with new construction, land development and commercial properties.

Take a free test drive of the new title education courses for your state by clicking on your state, then the information button on the US MAP.

Definition of Marriage Changed in Dictionary

I caught a Closer Licensing Course last week.  Among the many issues that we discussed in drafting legal documents, was a conversation about marital status.  We talked about the fact that in Minnesota, you are either married or not.  If you are separated, you are still married.  If you are divorced, you are not married.  We also talked about the fact that marriage is recognized anywhere within the United States.  If you are married in Pennsylvania, we accept that marriage in Florida.  But the question came up as to whether or not we recognize marriage between two men or two women?  My response was that I had not run across that issue.  I suggested that they may want to talk to their underwriter.  Rule of thumb however it is that we accept marriages created anywhere within United States.

Interestingly enough, I saw a blog articles today in the Adjunct Law Prof that Marriage is no longer limited to opposite-sex unions, according to Merriam-Webster’s Collegiate Dictionary, which defined marriage as “the state of being united to a person of the same sex in a relationship like that of a traditional marriage,” in a post.

Any thoughts from title insurance underwriters or title agents?  Has anyone come across this issue? What was the response? And how does that affect title searches? We always searched Mrs. John Smith if we knew Mary Smith was married to John Smith. How do we search Jim Jones, married to Tom Brown?

 

Closer Class available March 19,2009

A one-day closer licensing course will be held on March 19th the Twin Cities. If you are looking for this course, please contact us through the “contact us” form on this site. Space is limited.  If course fills, another will be scheduled this spring.

Are Abstractors to Blame for Offshoring?

by Robert Franco | 2008/11/26 | Source of Title, Used with Permission

A couple of recent (Source of Title) posts regarding offshoring have stirred up some controversy.  Sunil Ojha started a blog defending the practice of searching titles from India.  In Misunderstanding and Clearification (sic) of Same and Resolved Your Real Issue, OJha explains why offshoring makes good business sense and how it can be done effectively.  Whether you agree or disagree, the real question is why is anybody offshoring to begin with?  There is no doubt that offshoring cuts costs and that is attractive to companies looking for any advantage in today’s business environment.  But, abstracting was always a localized practice that required a particular knowledge of state and local real property laws to produce a reliable product.  Why would anyone trade quality for savings?  More importantly, have they? 

Source of Title Blog ::

Let’s start with a basic premise that it is possible to reliably search an online title plant.  I am the first to say that I have some doubts about online records, but it is possible.  The real problem that I have with online records is that not all of the information we search is available electronically; thus, the so called “thin-title” plants are incomplete.  However, title plants are the norm in some parts of the country, and even required in some places.  If they are complete, there should be no problem using them for abstracting purposes.

So the real difference between searching a title plant from India and searching a title plant locally, is the skill and knowledge of the abstractor.  As I have stated many times, there are vast differences between the states that have a huge impact on the status of title.  I believe that I have a strong understanding of the real property laws in Ohio, but I would never even consider tyring to do a search in another state. 

Some of the biggest differences between the states could be dower, community property laws, state Medicaid recovery laws, recording statutes, etc.  Anyone can find deeds, mortgages and liens, and report their volumes and pages, and recording dates.  That is the simple part.  But, understanding how those documents affect title is what makes the local examiner such a value to the industry.

I think it is a given that just as I would not be competent to abstract in any state other than Ohio, a searcher in India could not be competent to search multiple states.  It is conceivable that an Indian searcher could learn one or two states, and develop a sufficient level of competence.  Varun Sharma points out that this is exactly what they do in India (see comments).

There are different teams working on different states doing online title searches all at the same time and they are trained on state specific laws and nuances because they are experience in conducting searches in that particular State only.

Even then, it takes several months or even years of on-the-job training to really develop the necessary skills to become a competent, professional abstractor.  I would imagine it would require even more time for someone in another country, who is completely unfamiliar with our laws and culture, to grasp the concepts.  Based on a previous statement made by the head of an Indian outsourcing company, I have my doubts about the quality of training they receive.

Just when Mr Kanth was wondering about the next steps, he met the president of a title company based out of Baltimore in 2003-2004. He told Mr Kanth that there was a refinance boom in the US which resulted in a huge backlog in terms of production. Incidentally, his brother M Sujay Kanth, who is now the COO of ESS, happened to be in the US to explore business opportunities. They took up this opportunity. This was their first break. They met with the title official and looked at the process. “Initially, we had no clue of what was going on and it was very hard to grasp. We took it as a challenge and Sujay got trained in their office for about 40 days after which we started the transition to my India office from 2004,” the doc said.

 

Forty days of training is hardly suffient.  Regardless, to assume that searching titles from India is worse than using local abstractors, it must also be assumed that all local abstractors are well trained and educated in their state’s real property laws.  I believe that is a fallacy.  Basically, there is no difference between a search completed by an unqualified local abstractor and one completed by an unqualified Indian abstractor – except the latter is cheaper, of course. 

Before I continue, let me first acknowledge that there are still some very knowledgeable, local abstractors who provide very valuable services in this industry.  However, I believe that has become more the exception than the rule.  Many abstractors learned to abstract by trial and error, an online course, or from another searcher that doesn’t have the proper knowledge of abstracting.  I believe that this started with the “equity loan,” or “current owner,” searchers.  Once upon a time, they were used to provide very basic information for non-insured products.  Then, they slowly began to expand into “full searches” used for issuing title insurance.  I will never forget the first time I heard one of these searchers say “a full search is nothing more than a really good current owner with a chain of title.” 

Soon, the title industry began embracing current owner searches for title insurance purposes.  Current owners were much cheaper because these searchers, mostly out of ignorance, were taking shortcuts that a professional abstractor would never consider.  As the title industry began to lower the standards for its search requirements, the unskilled searchers flourished.  For better or worse, these over-simplified searches became the norm and everybody wanted them cheaper and faster.  The demand for skilled, professional abstractors dropped dramatically. 

Today the line between “searcher” and “abstractor” is blurred and the two terms have become interchangeable.  I wonder how many abstractors are really qualified to provide reliable title evidence. 

With the modern technological advance of electronic imaging, a title plant can be used to search titles from anywhere in the world.  If the local abstractors are really just finding documents and copying down pertinent information on a report, without a true understanding of the impact of those documents on the title, why not have that function done in India?  It is certainly cheaper… and since they can search around the clock, it is probably faster.

I do not agree with the practice of offshoring.  As Pat Scott said (see comments), “The title search is the foundation of the industry.  It is not a clerical task to be outsourced.” However, it would seem that the depth of knowledge of the local abstractors is not what it used to be.  If the industry were to suddenly stop offshoring and begin demanding quality abstracts, there would be a lot of local abstractors out of work, just the same.  The problem is that there is no way to know which ones are well qualified.  Because there are very few states with any sort of meaningful licensing, anyone can call themselves an abstractor. And, many who probably believe themselves to be professional abstractors just don’t know how much they don’t know.

My basic point is that the level of skill and knowledge between the average local abstractor and the Indian abstractor are probably not as far apart as you may think.  Title searching has been dumbed-down for so long that there are probably few left who care to educate themselves beyond what is necessary to copy recording information from filed documents.  There being little difference between the services provided here in the USA and overseas, it is not that hard to see why so many companies are offshoring title searches.  By failing to maintain a superior knowledge, the abstractors have probably made the offshoring decision much easier for those who chose to embrace it.  It basically turns on an issue of costs and profits.

Again, I am not saying that there aren’t still good, local abstractors out there.  I am merely pointing out that many of them have noticed that they are losing work to cheaper, untrained, incompetent competition; not just in India, but right there in there own counties.

Robert A. Franco
SOURCE OF TITLE

Can Massive Legislation be Far Behind?

From the Providence Journal

The former owner of a title insurance firm in East Providence pleaded guilty yesterday to a federal fraud charge for looting more than $1.3 million from company accounts and using the money for vacations, hair care, cosmetics and clothing. The FBI launched an investigation into the missing money in April 2007 amid allegations that owners may have emptied more than $800,000 from client accounts at Title America Closing Services LLC, an agent for Stewart title.

 “We see a steady stream of these types of cases,” Connell, the spokesman for U.S. Attorney Corrente, said.

Can massive legislation be far behind, because the title insurance industry  seems to be unable to police itself and the FBI, Secret Service, State Regulators and others are all getting involved to prosecute and clean up the messes.

Why Become a NALTEA Certified Abstractor?

 The Louisiana Land Title Association presents:

“Why Become a NALTEA National Certified Abstractor?”  

Jeanine W. Johnson from the National Association of Land Title Examiners and Abstractors (NALTEA) will be giving a presentation at the Louisiana Land Title Association (LLTA) Conference in New Orleans on December 5th, telling the LLTA about NALTEA and its National Certified Abstractor (NCA) designation and education program.The presentation is designed to encourage LLTA members to join NALTEA and show their level of expertise at the national level. The NCA certification will help them be recognized by national companies as an expert in the field of abstracting and will them to better understand the needs and language of out-of-state customers. In addition, NALTEA helps its members stay current on national real estate trends and changes, and gives an important national voice to independent Abstractors and Examiners.
The 2 hour program is a portion of the educational seminar given at the NALTEA conference in New Orleans earlier this year. The seminar will highlight the study guide “Principles of Abstracting and Land Records Management” National Edition, the same manual that was approved by NALTEA and provided to those who were preparing to take the NALTEA certified abstractor exam at the conference.

While every state handles land titles a bit differently, the seminar will focus on variations of a theme including things like “What is the difference between a mortgage and a deed of trust?” and “What are the most common forms of ownership used in the U.S.? ”

Jeanne Johnson is an active associate member of NALTEA. After having spent thirty years in the title industry she has been an author and subject matter expert for various publishers relating to title insurance, abstracting, title examination, and closing and she is now a full time educator for the land title industry and owner of

www.RealEstateTitles.us (RETUS) a content-specific website with reasonable, online education for the abstracting, title insurance, closing and land title industries.

Secret Service Investigates Misappropriation of Closing Funds

“The mission and of the United States Secret Service is to safeguard the nation’s financial infrastructure and payment systems to preserve the integrity of the economy, … “ And that statement is being put to use in another instance where a Title Company appears to have absconded with funds from the public. This time, Pennsylvania’s Priority Search, Inc. is being investigated by the Secret Service for allegedly not appropriately disbursing settlement funds. After Priority Search, Inc was recommended by a local real estate agent, the transactions moved forward, and at first seemed normal, but according to Pennsylvania’s Times Leader newspaper: (see full article)

Michael Bogdon borrowed more than $170,000 to buy a house in Rice Township, and the cash was given to Priority Search around the time of the Aug. 22 property closing.

Bogdon gutted and remodeled the home since then and was in a state of disbelief when the seller showed up at his doorstep about two weeks ago to inform him that Priority Search had never turned over the money.

Some of the funds were supposed to pay off the sellers’ old mortgage, and now the sellers – who are retirees – have outstanding mortgages on both their former and new houses, Bogdon said.

After the secret service investigation announcement was made public, the number of others stepped forward with similar missing funds problems having to do with Priority Search, Inc.  This was clearly not an isolated incident.  But misuse of closing funds happens not only in Pennsylvania, misuse of closing funds seems to have become a weekly occurrence across the country.  Many title insurance and land title professionals are now concerned with this state of affairs.  Specifically, a number of professionals are currently working on, or have recently completed, state legislation to licensed settlement agents.  All seem to agree it would be a good idea to know who is handling the settlement funds, and what their background is.  It is unfortunate that the industry hasn’t such problems, that kudos to those were working toward a solution.  I believe licensing is in the best interest of the public, and of the title industry. 

Info On Home Closing

Home Closing 101: An Educational Initiative of the American Land Title Association