Inspiration…

It comes from mysterious places, doesn’t it? I had just enjoyed a movie with my 9 months pregnant wife when I happened to notice a facebook message on my blackberry. My inspiration came from a simple reply to a status update in which a friend of mine was sad because her husband had gotten home from work after 10 PM. You see my friend’s husband just happens to be in management for a competing title company in the Chicago area, and yesterday was the famous Last Day for a Refi to Close and Fund. So, what was the reply that was the inspiration for this blog post? The reply read, “Gotta love the title business.”

Is this what the Title Business has become? Since when did we have to work 60 or 70 hours in a week to insure first lien? Shoot, is insuring first lien even what this is about anymore? I don’t want to be part of a business that forces us to work like dogs for our nightly bowl of kibble. The title business isn’t and shouldn’t be preformed in sweatshop like conditions. I’m ashamed that a small group of companies have changed the perceptions of an entire industry. I can’t tell you how many title company owners I have heard utter the phase that they are, “a family first company.” I guess that by “family first” they must mean their own. How can the ownership expect their staff to work from 7 am to 9 or 10 pm and still have a family life? Shame on you…

I remember the title business used to be about doing a good search of the public land records, providing an accurate commitment, closing and funding a transaction as per the lenders instructions and providing a clean title policy to the Lender and/or Owner. Now it seems as thought the business has changed into doing a quick search on the Internet, providing a clean commitment no matter what, waiving exceptions via credit reports or just because you don’t want to upset a client, preparing deeds and legal documents even thought it’s the unauthorized practice of law in Illinois and very much illegal, and finally closing whenever and wherever we can… Then maybe, once it’s all over with, you might get a policy a year or two later. Does this sound familiar to anybody? Shameful and sad.

I do love the title business, but I refuse to accept that this is what its become. Maybe I’m a dinosaur, maybe I’m out of touch, but maybe, just maybe I like going home to my family just as much as my customers do.

Reaction to ALTA’s Policy Licensing Initiative…

The American Land Title Association (ALTA) has been long accused to caring only about the interests of the Underwriters, or more appropriately, their Donors. ALTA is too slow to change, lacks the clout it deserves, and generally fails to inspire the rank and file in the title industry. For too long, ALTA has been nothing more than a Social Club for the CEOs and Vice Presidents of our Underwriters. I have to admit, that up until the last few years, I was in agreement with this line of thinking. You might ask, what has changed? Why am I now seeing some light at the end of the tunnel of these problems? Simple, I have gotten involved.

Our state Land Title Association’s are the backbones of ALTA. We are the support structures that give ALTA its strength to tackle the issues that affect us all. Now, it is true that I am often disappointed with the lack of speed with which ALTA works, but I attribute this to the general speed of Washington politics. Action comes slow, but in this marketplace, inaction as opposed to overreaction can be a positive thing.

I see the most glaring problem with ALTA being its lack interested parties. Our industry, especially when it comes to our agents, fails to take proper ownership in our Association. How is ALTA going to advocate for us when we don’t stand up and be counted. ALTA sometimes makes this difficult, with yearly membership fees, exorbitant pricing for conventions, and their confounding hierarchy, but the benefits of making your voice clear are abundant.

It is with great hope that I say I support the Policy Licensing Initiative. I hope that writing that $195 check to ALTA each year (or hopefully a bit of a larger check for membership) will force agents to speak up. Let ALTA know what is affecting your day to day business. Tell ALTA what current legislation will do in your marketplace and to your company. As much as I like Mike Pryor, he isn’t a mind reader and neither is the Board of Governors. They represent a segment of the industry but members and non-members alike must take some ownership in the importance of our national image and our national product. At worst ALTA now has a larger war chest to fight the battles that need fighting, but at best, ALTA now has a new pool of invested parties to lead us into the next generation of Title Insurance.

Looking ahead…

At the Illinois Land Title Association we are a month from our first Committee meetings of the year. Our new President Paul Cozzi would like to usher in a new age of mentorship within our industry. I firmly stand behind this initiative as without the mentorship of my first boss to the mentorship of my current ownership, I wouldn’t be were I am today. I can’t imagine a time when I will know all there is to know about Title Insurance, but I sure as heck can pass down the knowledge that I have gained over the years.

We are a hard industry to learn… Somewhere between office work and a skilled trade. I would ask all of my readers to help the younger employee within your company. Help them to gain the knowledge that you were taught. This is the same knowledge that will guide our industry for generations to come.

Have a wonderful Labor Day Weekend.

What do consumers want…

I mean what do they really, really want? When a consumer is choosing a title company with which to close their transaction, what are they looking for? For that matter, are they looking? If not, why? With all the press going to companies such as Entitle Direct where supposedly the consumer can save 35% on their title charges, you would be downright stupid not to shop around. The local title companies must only exist to prey on the consumer and charge exorbitant and outlandish fees from their neighbors. It seems to me that the mysterious stranger from out of town must always have your best interests at heart.

I would argue that Entitle Direct has actually hit on something with their approach. Consumers should absolutely shop around for title insurance! I can’t stress this enough. Title Insurance is a must. Your lender is going to require a Policy on a refinance and you must furnish clean title to your new buyer on a sale. But when it comes right down to it, a title policy is a title policy. So Entitle and others like them take the approach that if the end product is the same, then price must be the only factor with which a consumer should comparison shop. As Lee Corso would say, “Not so fast my friend.”

So if it’s not just price, what is it? The answer isn't that hard to figure out… Trust. The consumer must not only trust that the end product will protect them or their lender, but they also must trust that they aren’t being taken advantage of. The consumer wants to know that the policy they paid for is priced fairly and completed in a professional and safe manner. Why? Simple, in the end, Title Insurance is really Title Assurance.

Who can the consumer Trust? The internet is the wild wild west, anything goes. I don’t know anything about Entitle’s underwriting practices, but for the sake of this post, I’m going assume that they are even handed and accurate. But here’s the thing, you don’t know. They are their own underwriter, they don’t have to answer to Chicago Title, Fidelity National Title or Old Republic when they aren’t doing something correctly. Your local ALTA title agent does and has strict standards set by their underwriter. Some may call us the middle man, but we have checks and balances. The consumer has true Title Assurance.

Now as to the 35% that Entitle Direct is going to save you. I don’t fault them for marketing this way. I don’t know what the other markets they do business in are pricing at. I can tell you this though, in the Chicago Market, where I do business. I am going to save you 42% on a refinance… Not on some fictional rate but off of Entitle’s quote. IS that a special deal? No… That is every single day. Am I special? No, not really. The market dictates that a refinance should cost a certain amount in Chicago and Entitle is just that much more expensive.

Would I have put a link to the Entitle Direct website if I coulldn't beat them? So don’t believe the hype… Shop around, but shop local first! You’ll save time, save money and you’ll be Assured of that fact. You can Trust in that fact!

Not so Scientific, but…

The results are quite clear. With 57% of the vote, Old Republic is your favorite national title underwriter. No other underwriter managed to garner over 14% support. I’m not really sure that this was truly a vote for Old Republic, as much as it was a vote against the Fidelity family. Am I wrong? Why?

Have a great week!

Friday Call to Arms…

No, I’m not saying that you should get your gun and defend your front yard from the King of England. I’m not raising our Terrorist Threat Level, I like the color Yellow. What I am saying is that we must defend our industry from what is threatening to tear us down. Not just from the outside, but most importantly, from the inside.

Nobody likes a tattle tale at home, but in the business world, Whistle Blowing has taken on a friendlier connotation. It’s time to stand up against the company that funnels kick backs to their customers. It’s time to stand up against the company that always promises a clear title before a search has even been run. For that matter it’s time to stand up against the company that doesn’t even run a thorough search. Since when is it standard practice to waive a line of credit on the strength of a credit report? Come on people, let’s take our industry back from the inside out! Blow that Whistle for all the world to hear!

Have a great Friday!

OTT (Off Topic Thursday)...

For those of you who don't know me, my wife is 34 weeks pregnant with our first child. We are having a girl, with a name yet to be revealed. We are very excited and ready to go! Who needs sleep anyway? My wife is having a pretty difficult time as of late with sleeping and just being uncomfortable all the time. I open this up to the group… Any suggestions?!

On the bright side, I am finally done painting the baby's room. That was hard!!!

New Poll!

So the results are in and by a wide margin you do not favor Federal Title Insurance Regulation. The final vote was 75% NO - 25% YES. Please vote on the new poll... Which is your favorite title insurance underwriter? I'm very curious for the results...

Have a great weekend!

Choosing your Title Insurance Provider…

I have come to accept that I work in an industry that nobody really cares about. We toil away in the shadows, doing mundane work to insure that the very unlikely doesn’t occur. Most people don’t know what we do, they think we are useless at best or a fraud at worst. I have dedicated many an hour trying to make my friends and loved one’s understand what it is we do and how we fit into the American Dream. My friends, I give up… I am not going to try to explain it anymore. Here’s what I will say... Do you know how to repair a transmission? No. Do you need a working transmission? Yes. Then just shop around for a good price from a local shop you trust and leave the work to the experts in the field.

We my friends are the experts in our field. We are the transmission repair shop of the Real Estate industry. No matter how pretty the paint job is on the home, if the title isn’t clean, good luck getting that closing out of Park. So... Loan Officers, Mortgage Processors, Attorneys, Realtors, Buyers and Sellers please choose your Title Insurance Provider with the same care in which you choose your Auto Mechanic. You wouldn’t entrust your vehicle to a shop you don’t trust and who you don’t feel is on the up and up. Why leave your Real Estate Transaction in unqualified or uncaring hands. Trust your local Title Insurance experts and they’ll get you up and running at a very fair price.

OTT!

Happy Thursday!

I propose a new tradition… OTT which will stand for Off Topic Thursday. Thursday’s will be marked with something off the normal radar screen for this site. I’m not going to ramble on about Nationalized Health Care or Get Rich Quick Schemes, no, today let’s talk Tiger Woods.

Opening round 67 at the PGA Championship. Pretty darn good. He just notched his 70 career victory last weekend and this weekend he seems destined to score his 15 career major title. He’s not perfect, but he is the best ever! So, I pose this question… How many strokes will he win by this weekend? I’m saying 4. We all should aspire to be as good at something as Tiger Woods is at golf.

Advocate!

How many of us support or serve our state Title Associations?

We complain about the government interceding in our business, but we do nothing to effect change. Now is the time for us to stand up with our State and National Title Associations and who are fighting for us everyday. We must stand up and be heard! Contact your State Title Association and ask how you can help. Let’s protect our industry.

Thank you!

Response to Kiplinger…

In an article entitled, “Save at the Settlement Table” by Pat Mertz Esswein that is set to appear in the September 2009 issue of Kiplinger's Personal Finance magazine it is stated that you should shop around for Title Insurance as, “…as much as 80% of the premium goes to paying commission to a title agent.” I am appalled by the characterization of the Title Premium as up to 80% commission to the title agent. The agent does the entire search, exam and closing process and takes on an ever-growing amount of risk.

Then the author went on to blindly recommend a national title company that markets directly to the consumer however the title rates of the company provided were 50% more than the industry standard refinance rate in my region. I agree that people should shop around, but Title Insurance is quite local... The best rates can and usually are found in your own neighborhood.

This article is ignorant and a complete mischaracterization of what it is we do and what it costs to do it. Unfortunately, we don’t do a very good job of dispelling these falsehoods.

The Uniqueness of the Chicago Market…

Anybody who has spent any time in the Title Insurance Industry quickly comes to the realization that all Title Insurance is local. Even with a state governed by a singular set of rules, such as Illinois, you can have vastly different markets. The Chicago Market is comprised of roughly of a 6 county area of northeastern Illinois and contains about 10 million people. The rest of the great state of Illinois has about 2.5 millions people and is, for the most part, a patchwork of farms and small towns along with the relatively small and self contained Peoria, Rockford and St. Louis markets.

The Chicago market is attorney directed. Some 99% of residential resales are directed to the title company by the seller’s attorney. These attorneys have a relationship with the title companies in which they are the title issuing agent. The attorney must do the title exam and takes all the risk, in turn takes the majority, if not all of the premium. The title agent makes the closing fee, a service fee from the Attorney Agent and some small ancillary fees. Realtor’s, for the most part, have no real function in the closing process.

Now, once you step foot outside the Chicago Market into rural or Southern Illinois, these Attorney Agent programs don’t really exist. Realtor’s direct resale’s to the Title Company of their choice and may or may not be engaged in a Controlled Business relationship with said title company. This also leads to many bifurcated transactions, transactions that simply do not exist in the Chicago Market. Attorney’s tend to be absent from these transactions and the consumer suffers. As a buyer, you’re lucky to get survey coverage or even standard exceptions waived.

I have always marveled at how one state, with one set of title insurance laws can have such different ways of completing a simple resale transaction. I’m not going to pass judgment on which way is better, heck, maybe neither is right. All I’m going to say is that Illinois proves that Title Insurance is local and the best way to govern a local industry is to do it locally. I believe that Title Insurance should be removed from the proposed Consumer Financial Protection Agency. To attempt to change the intricacies within a local marketplace with overreaching federal legislation can have a paralyzing effect.

What makes a good Sales Representative?

You know, it’s pretty hard to tell what makes a good Sales Representative these days. I find that it’s more about Spark and Desire than anything else. Relationships are great, but they only get you so far when you have an internal issue that threatens a deal. I seem to come back to this question every time I have an opening or two to fill. Right now I’m beginning to interview for 1 or 2 Sales positions and I really don’t know which way to go in this market, Title Experience, General Sales Experience or Rookie. I have hired them all in the past and they have all worked, and unfortunately they all have failed as well.

I find that the easy way out is the person with Title or Title Sales Experience. This person usually walks in with a book of business and promises. Unfortunately, I find that they often don’t mesh with my company’s ethics or culture. I end up fighting an uphill battle trying to fit their customer’s into my business model. This can work, but boy is it hard! The upside is that I don’t have to spend a lot of energy training this type of Sales Representative and they already have good connections that can help the bottom line… Today.

Next we have the salesperson. These people have made their living selling everything from pharmaceuticals to widgets. They are used to working and living on commission and aren’t scared away by cold calls or rejection. The problem is that we work in a business that takes years to learn. Shoot, I’ve been in this industry for 13 years and I still learn something new every day. There is a serious learning curve, but it can be overcome by good salesmanship and knowing your limitations. Some of my best hires over the years have come from this category, but also one or two of my biggest failures.

Finally we come to the Rookie. This person maybe just came out of college, maybe their a summer intern, or maybe they just impress me with their ease and spark in a difficult interview setting. Yes, the learning curve is very pronounced and sales techniques can be very hard to learn, yet alone teach. These are drawbacks but talent is talent and it should always be given the opportunity to blossom. I have never shied away from this challenge, but to be sure, there is a greater risk of failure. The upside though, can be downright tremendous!

I will be interviewing all three of these candidates over the coming days and maybe weeks. I’m looking for that spark, ease, and if you will, grace. I don’t believe in the Doughnut Rep, just dropping off goodies and hoping for the best. These are challenging times, and it takes effort and tenacity of will to get the job done. Wish me luck!

Happy Monday… Let’s make this a great week!

Coke Zero and Title Insurance…

Anybody who knows me knows I walk around 24-7 with a can/bottle/glass of Coke Zero. To say I’m addicted is a slight to the word addicted. I have tried to break away, but I just can’t. But you know what really upsets me about Coke Zero? It’s not the addiction, hell, I love the addiction. It’s the fact that I had to drink regular Diet Coke for 25 years before they came out with something that actually tasted good!

I look at the ingredients and they are all virtually identical. It’s not as if there was some great technological breakthrough that led Coca-Cola to this recipe. They just didn’t try hard enough, or care enough about their audience to produce a great product. So you might ask, “How does Title Insurance fit in to this?” Well, other than Coke Zero being the fuel that gets me through my day… It doesn’t.

Here’s the moral of the story. Don’t forget about what your customer’s want. Do you know what your customer’s want? You see, I don’t think Coca-Cola even cared enough to ask. If you know your customer’s wants and desires and can always deliver, they will be loyal and quite addicted to your product.

Happy Friday!

Direct to Consumers…

It seems to me that most title agents I talk to seem to think that if the consumers chose their own title company, they would be flush with new title orders. They say, “We can do it better than the big guys.” You know, they may be right… The problem is that in this fast food culture, who chooses the little guy?

Sure, you’ll get some locals who don’t like to support the big, evil machine. That evil machine though, they can afford to advertise. They would be all over the TV, radio and internet. You know where I would be? I would be standing on the corner in a sandwich board with an arrow on my chest, pointing passerbies in for title.

I’m sitting at my desk right now, looking across the street at a new restaurant. I already know that they are done for. They are the 4th different restaurant at that location in the last 2 ½ years. How do they compete with the McDonalds and Burger King right next door?

So, I say thank you to the wonderful people in our industry who want to turn us all into start up restaurants… But I’ll keep things just the way they are! I’ll drum up business by going to the mortgage originators and the real estate attorneys, you enjoy your sandwich boards and people in gorilla costumes waiving to passing cars.

My morning ritual…

Each day I come into the office, sit and my desk and do a simple Google News search of, “Title Insurance.” It used to be that I would get some quarterly profit statement news from some underwriter, or news of some small agent defalcation in a market I’ve never heard of. Now, the news is Wall Street Journal story’s about exorbitant title fee’s and Consumer Protection stories from Local Evening news segments. We also have articles about the ever present threats from D.C. talking about regulation.

Is regulation a bad thing? I don’t really know. I work in one of the most title rate depressed regions in the country. I would think that if the federal government decided to regulate rates, I would benefit. I suppose that’s not really the point though, the question isn’t whether we are going to be regulated, it’s how much and by whom. Are we an Insurance Industry or a Financial Service Industry?

If we are poorly classified, I think regulation can be a terrible thing for us. Repeat after me… TITLE INSURANCE ISN’T A PART OF THE INSURANCE INDUSTRY. As the GAO Report of 2006 correctly noted, we pay out about 5% of rates charged towards claims, when a typical Home, Auto, Life Insurance Agency pays out upwards of 75%. If we allow ourselves to be classified as an Insurance Company we are doomed by further regulation.

The Obama Administration seems to understand this, but at what cost? We are being lumped into the Consumer Protection legislation of the Financial Services Industry. Our lobby, the American Land Title Association (ALTA) is working hard to blunt unnecessary regulation, but I fear that they are fighting a loosing battle. How do you argue against consumer protection? You don’t, especially when public sentiment is being swayed so heavily against us by the clueless and sensationalist media.

So, a hearty thank you goes out to Google News for keeping me up on things, but I sure long for the days when I didn’t fear my morning ritual.

Introduction...

Hello teeming, blogging masses. To the world at large, this may be the most boring blog ever conceived. Then again, who knows? For people in the peculiar Title Insurance industry, maybe some of you will find my thoughts interesting, but it’s hard to imagine who would. Haha.

For a little background, I’m about to celebrate my 30th birthday, but I have been in the Title Insurance industry since I was 17 years old. I started off working for a small title agent in the Chicago Suburbs. I was working after school and weekends doing order entry, recording, office work and basically every low skill job that exists in our industry. When I turned 18 I got my Notary and became a closer. I don’t know how I would have felt if an 18 year old kid walked in to do my closing, but it all worked itself out.

I worked my way through college at three different title agencies, and after school, I found that nothing thrilled me quite like title insurance. Thrilled might be an odd choice of words, but I think it fits. After college I took a position with a National Title Insurance agency and moved from the Chicago area down to St. Louis to take over operations for Missouri, Kansas and Southern Illinois. It was fun while it lasted, but like many companies, we got caught in the subprime meltdown and my operation imploded. Oh well.

I am now the Director of Business Development for a large title agent in the Chicago market and I couldn’t be happier. I sit on a several committees within my state title association and I am an active advocate for our industry. I’ve been in this business for almost 13 years and it has been very good to me, but where are we headed now? National Regulation? National Rates? I’ll explore my thoughts on where we are going in future posts… As for now, back to work!