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.

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!

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!

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.

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.