Real Estate & Property Law

Title Insurance: Can we redirect its future?

By Francine D'Elia Wirsching

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.

Full post as published by Clearing Title on September 09, 2009 (boomark / email).