MReport May 2019

TheMReport — News and strategies for the evolving mortgage marketplace.

Issue link:

Contents of this Issue


Page 16 of 67

TH E M R EP O RT | 15 FEATURE 2 018 was a good year for the title industry. In fact, the operating margins for the four largest underwriters in the industry increased to 11.5 percent accord- ing to a report by Fitch Ratings, which said that title underwrit- ers benefited from the positive macroeconomic factors such as employment growth and rising property values. These, along with "disciplined underwriting and expense management," led to the strong showing of most title companies during the year. According to Forbes, this growth of the $15 billion industry is pro- jected to continue through 2020 but how can title professionals ensure that success? While opportunities abound, title agents will first need to overcome the dual headwinds of consumer engagement and online security, the experts who spoke to MReport said. "The industry is in a time of considerable change," said Mary O'Donnell, CEO, Westcor Land Title Insurance Co. "The diminish- ing property inventory along with increasing prices is a challenge for the entire real estate market. Uncertainty in interest rates and the ability of salary growth to keep pace will continue to put pressure on this sector." Despite these macro challenges, O'Donnell said, Title agents provide a valuable resource in assuring the consumer that their property rights would be well protected. Yet, much of their work goes unnoticed. The lack of visibility to the consumer of the value of the effort is a challenge." A Customer-First Mindset W hile industry associations such as the American Land Title Association (ALTA) have promoted customer engage- ment through initiatives such as the Homeowner Outreach Program, to highlight the services provided by title companies to the end-consumer, it found that consumers still remain confused about regulations and processes related to the title industry. For example, the association is focused on fixing the inaccu- rate disclosure of title insurance premiums on the TILA-RESPA Integrated Disclosures (TRID) to help consumers understand the true cost of their real estate trans- actions. "ALTA's research shows that 40 percent of consumers feel confused by the Consumer Financial Protection Bureau's re- quirement on title insurance pric- ing. We need to fix the regulation to improve transparency to make sure consumers receive disclosures that accurately show the cost of the one-time fee that protects their property rights," said Cynthia Durham Blair, ALTA President. Stressing the importance of these regulations for the peace of mind for consumers and professionals alike, Blair gave an example from the late 2000s when she managed a title team that handled hundreds of bank-owned properties per month. "While most of these properties were covered by title insurance, it was clear that the title had not been adequately examined by experienced title professionals prior to the issuance of the policies. In order to clear the title to resell to a new owner, we had to file claims against the title policies or just resolve the issues ourselves," Blair said, explaining that those issues ranged from no access to the property, outstanding ownership interests in the property, unsatis- fied liens, complete failures of title, and everything in between. "This experience taught me that title search is not a process that can be skipped over. The time spent reviewing the records and the legal descriptions is impera- tive for ensuring the consumer has good, defensible title to their property," she said. "In addition to ensuring the lender has first-lien priority, the protection afforded by the insurance product is the peace of mind that the consumer needs so they don't have to worry if something unexpected arises in the title to the property." O'Donnell stated, "The value of the title insurance product is really brought home when a claim arises." Giving an example, she stated that the title agent's "real value is provid- ing that comfort in a time that is extremely stressful to the con- sumer." As a prior claims handler, she highlighted that fact by telling a story about a consumer who was served with a foreclosure for an unpaid contractor's lien, which arose after the closing but related back to work before the purchase. "Being able to assure them that the matter would be resolved and they would not lose their house taught me that, despite our busi- ness being highly technical and often misunderstood, the knowl- edge of the local agent or the local area helped resolve their situation and bring them peace of mind. The agent can help improve the experience for the lender and consumer," she said. According to Matthew Slonaker, SVP, Head of Enterprise Solutions By Radhika Ojha In a changing business environment, leaders give their perspective on what's holding back title professionals and what can propel them forward.

Articles in this issue

Archives of this issue

view archives of TheMReport - MReport May 2019