If an industry does not control the point of sale, it eventually loses control of its product. And if it cannot control its product, it loses control of its destiny.
It is not a stretch to see this happening to the title insurance industry. We have lost control of the point of sale. The title insurance professional is no longer selling their own product. Real estate agents, builders, and mortgage lenders are selling our product which is only ancillary to their own core service.
Because we have lost control of the “sale,” we’ve been all too ready to accept the “get the deal closed” mentality. Short-cut searches, sloppy title work, and conflicts of interest all exist because our product doesn’t matter to those who are selling it – lenders, builders and real estate agents. The only thing that matters is getting the deal closed. But it gets worse. While we are losing control of our industry, we have given up on policing ourselves. Who cares? The deal gets closed no matter what unqualified characters and shoddy practices are involved. There has been serious damage to the industry’s reputation with story after story of defalcations, claims, and scandals.
How do we take back the point of sale? There are more than a few Departments of Insurance and Attorneys General from across the country who are seriously taking a look at the anti-competitive and anti-consumer nature of ABAs and CBAs. All title professionals should be standing up and letting these agencies know that they are on the right path and that without these conflicts of interest, the consumer and the real estate industry would be a much better place. But we shouldn’t stop there. We have to start selling our product, not through intermediaries but to the true beneficiaries – the consumer. And let it be said that there are real estate and mortgage professionals who encourage consumers to shop and speak with title professionals who have proven themselves to provide the service, knowledge, and expertise that will only benefit the consumer.
Where do we go from here? Title insurance professionals must educate the consumer early, before they have signed an agreement of sale or chosen a lender, so that the title insurance decision is the consumers, not some third party pushing their own self-interest. That means we have to stop hiding in the back room and get out in front of our true clients, consumers, letting them know who we are and what we do.
Let’s get back in control before the industry becomes something we don’t want it to be.
{ 6 comments… read them below or add one }
After 40 years in the business, what I have just read, is music to my ears. However you failed to mention the words “kick backs”
Thank you for your comment. In my opinion, ABA’s and CBA’s are vehicles for legalized kick backs, doesn’t make it right or ethical but all the same, the Federal Government and most underwriters have no problem with it. Greed runs rampant in the entire real estate industry. Figure out how we conquer greed and then maybe the pick pocketing will stop.
Very good article and I agree on the concept however I have worked in the industry for over 15 years and when consumers make the choice for title and closing services it’s usually based strictly on price. How could a consumer compare good title work to bad (sloppy)? Very hard to do… real estate professionals must still be the point of sales but we need strong laws against aba’s and cba’s.
Mr. Fortune, thank you for your input. I agree that real estate professionals are key in the point of sale but I also believe that just like a consumer chooses a real estate agent based on expertise and professionalism so one day might the consumer. In Pennsylvania, pricing among competitors should be the same except for the junk fees that some agents charge. But as long as the ABA’s and CBAs are allowed to operate, compliant or not, AND as long as real estate brokers pay their managers for the amount of business their agents refer to the affiliated title agency, the consumer will be misguided and the independent agent (those who DO NOT enter into any financial arrangement with another party) will not be operating on a fair playing field.
Great article and so true. I have been in this business for 31 years. Not a day goes by that myself and my colleagues don’t discuss the the “shoddy” title work that is now being done by the major title companies. I work for an underwritten company which is locally owned and operated. We are in an area that has been plagued by foreclosures. When we receive an order that has been previously insured by another company, nine times out of ten the title report will reflect prior liens and encumbrances that were not properly released, but insured over by the previous company. No one seems to care anymore. We spend endless hours cleaning up other companies’ sloppy work because; 1) we take pride in our work and 2) we care about the consumer. We have lost our professionalism. Ms Wirsching, you are absolutely right……………………just close the deal – who cares what the title looks like? This attitude of: the last deed was “full value” and previously insured, therefore it’s okay to ignore anything prior, its absolutely abhoring!!!!
Do you think we will ever go back to doing things the professional way?
Ms. Kinney, I appreciate your thoughts and am hopeful that the dialogue will continue. We are surrounded by many professional title agents who are very diligent in their goal of eliminating the risk of the hazard of litigation for the insured. I do believe the number of claims that the industry is experiencing may force the underwriters to clean house which will in turn (you would think) put those with flexible standards and ethics out of business.