Thursday, July 30, 2009

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.

2 comments:

  1. I think title companies need to re-evaluate their approach to the business if they want to remain unregulated. Real estate agents and mortgage lenders sometimes have a favorite company, which they refer business to. And sometimes those people receive some sort of compensation for the referal.

    It's not just first-time home buyers who are unaware they can choose their title company. By shopping around and asking about discounts, though, a lot of times the home buyer can save thousands on closing costs.

    Funny you should mention how you Google "title insurance" every morning. I do that too. :-)

    ReplyDelete
  2. Nikki, that is an interesting program you run at Federal Title. Do you know what percentage of your business comes direct from consumers? Very interesting.

    ReplyDelete