Robert,

While I am in agreement with most of your post, I take some exception to the following comment:

"The problem is that there is no way to know which ones are well qualified.  Because there are very few states with any sort of meaningful licensing, anyone can call themselves an abstractor. And, many who probably believe themselves to be professional abstractors just don't know how much they don't know." [emphasis added]

The National Association of Land TItle Examiners and Abstractors (NALTEA) has established a meaningful way to distinguish between exceptional abstractors from those with more to learn before they should hang out their shingle.  For those who have more to learn, NALTEA is working on educational programs designed to build a better abstractor - thereby increasing the ranks of competent local abstractors.

The NALTEA certification process begins with a 100 question exam.  It's not an easy exam.  Passage requires understanding that can only be gained with experience.  For those who qualify for NALTEA certification, continuing education is necessary to retain the certification.

State licensing would be ideal, if it were to be done right in every state.  I hold out little hope of that happening any time soon.  By 'done right', I mean working with the state's land title association to develope standards of knowledge, comprehension and experience. 

I am a licensed abstractor in two states in which I have never attempted to complete a title search.  The only hurdles to licensing were the proper completion of the application, a nominal fee, and referral by a current licensee.  This licensing is only meaningful in that it inhibits the entry of the good-ol'-boy network by newcomers.

Until all states enact meaningful licensing legislation, NALTEA's certification program will identify the competent abstractors who choose to participate in the program.

You are quite right, Pat.  The NALTEA certification process is a huge step in the right direction.  But, I don't think it affects my analysis too much at this point, just because it hasn't really developed far enough yet.   There are only 14 NALTEA certified abstractors so far.

I am hopeful that NALTEA will get its certification test in regional testing centers soon and more people will achieve certified status.  I think that would help potential clients make better informed decisions when selecting abstractors. 

I think the NALTEA certification is the best tool the industry has to identify competent abstractors.  It would be nice to see the program expand.  I'd like to see hundreds joining NALTEA in the coming new year and get certified.  That would restore my hope in the profession.

Best,
Robert A. Franco
SOURCE OF TITLE

Robert,

The current owner searches are/were over-utilized. During the refi boom, the lenders (and title companies who agreed to issue a policy based on them) did not fully  understand the risk because the mortgages were being refinanced so quickly that claims never had a chance to mature. In my experience, the first step I took when faced with a claim for a missed lien or judgment was to try to get the borrower to refinance. We never issued a policy based on a current owner and we had a very minute number of claims, but refinancing did save the day more than once.  The borrower recieved a lower rate and maybe some additional cash out and paid a judgment or lien they should have paid through the original closing.  In the instance I am recalling, the lien was misindexed and the borrower knew that he should have paid it.  An owner's affidavit was executed and the borrower agreed to make good on his attestations.

During the boom years, if the last title company missed a lien because they performed a current owner, our company or the next title would come along and fix it. That isn't  a viable option today because consumers don't have the equity to refinance.  I think this is one reason why the underwriter losses are more substantial.  The claims are able to mature.

Off-shoring title examinations will lead to higher claims.  However, we can talk about it until we're blue in the face.  Until the title underwriters start losing substantial sums of money in claims losses, I just don't think anyone will listen.

One of the big problems with this kind of search is that the customer/owner probably doesn't even know that is the kind of search being performed on their behalf- and a new loan is being based on the results of it. They just might think it was(hopefully) the same kind that was done when they purchased the property.And as the previous post indicated- the lenders didn't know the risk- which they shouldn't, since they don't issue title insurance- but are supposed to be "lending"- there just might have been a lot that just slipped through( Meaning-no oversight or review!)
As far as these short searches- It has been my experience that commitments are issued with no regard to actual underlying facts- some title insurance companies just take the first prior policy they can find and "duplicate it" or even worse, and more common with a few select TI companies- just take anything close and "use it"- it is just mind numbing this abstractor to see a policy issued for a particular subdivision and section,that has nothing to do with the lot being insured. This happens a lot more than you might think-next time one of your clients says they have a copy of a prior policy, ask to get a copy and review it-you just might be in for a shock, especially if it is from one of the two BIG TI companies.
Diane is right on with this- she and a lot more agents/settlement companies need to rely or demand experienced/local abstractors that do "real " searches, so the future searches have some amount of credibility and facts to be judged against.

Robert, your last sentence was exactly right on.  I have been reading the India blogs and find them enlightening.  At first when I read Sunil's posts, I thought how could anyone hire someone to do such important work when their English is a bit lacking and reading and interpreting documents in native language is such a crucial part of abstracting?    But that is a pet peeve of mine so I had to get over it.  The fact is, not only are Indians doing online searches but here in Georgia, fellow Americans do the same.  While the records are not complete, many feel comfortable relying on those records that are posted on the Georgia clerk's website.  The service is cheap and easily accessible to anyone, anywhere.  Not only do people in other states rely on the website but so do some in Georgia.  How is their work any better (or worse) than someone in India?  I for one, never rely on the online records.  Being a local abstractor, I know better. 

How does an online abstractor verify the legal description?  Typing a legal from a deed doesn't ensure it is correct.  Most surveys and/or detailed tax maps are not shown online.  I can't tell you you how many times I've found legals copied from one transfer to the next with incorrect descriptions.  It was apparent no one bothered to look at the plat or actual tax map.  How do online searchers check probate records or civil records for divorces or pending suits?  They are not online.  What about FTL's, 20 yr. Federal judgments and other liens outside of the time frame of the online records?  There's also assignments not on online records but on the face of the recorded security deed.  I could go on and on about why I do not do an online title search, even in my own county.  Rather, I use them as an additional tool in my searching. 

I can't compete pricewise with online searchers, not in India, Georgia or California.  I  continue to have faith that local searchers will survive because we do true abstracting. 

Whereas, I understand the comment made:  "By failing to maintain a superior knowledge, the abstractors have probably made the offshoring decision much easier for those who chose to embrace it. ", but I cannot agree that abstractors have made offsouring easier due to their lack of knowledge.  Certainly, a certification and licensing process for Abstractors in every state is VERY Necessary.  However, it is not always knowledge, or lack thereof, that is making the local vs. offshore choice.

In my experience as an Abstractor, it is the Abstractor's client - who often cares more for price than quality - that has made offsourcing more attractive.  I have lost many clients because they were more worried about a $5 decrease in fees than receiving a quality report.  And this includes settlement companies, title companies, and banks, and so on.  When chosing between an abstractor with experience and a proven quality record, who charges 5-10% more per search than those offshore or inexperienced abstractors, many clients choose the cheaper option..... at least for a while.  Until something missed hits them in the bottom line.  But even after they come back, they want to nickel and dime the abstractor down to the cheaper prices.

Is the offshoring the result of the failure of abstractors? Or rather is the client who must face the result of their choices, of repeatedly choosing bargain-basement prices over top quality?

Melissa

Robert started this blog by the heading : Are the Abstractors To Blame for Offshoring? We aren't saying this but does that mean that "Are offshoring workers to blame for poor online records ??

In all the posts made above, one thing is pretty clear that the number one reason why all abstractors are against offshoring online searches is because they feel that online records are not correct / mis-indexed / documents not recorded. Now if all or most of the online public records are not true or correct then why would the big underwriters use and maintain Title plants.

Is it the fault of somone doing an online search that the public records are not correct or mis-indexed. I have a few points to raise against this :-

• A country like US should have the capability by now to have public records posted CORRECTLY online. If you don't have the capability then you should offshore the work to India for creating online records or building title plants. FYI...building title plants is already being offshored to India by Top Underwriters and Big title companies.
• It is certainly not the mistake of the online seacher in India if a document is not recorded online or mis-indexed. The Underwriter is always ready to take a hit if a lien or judgment is missed because it was not at all available online or mis-indexed. They know that the chances of this happening is very rare so they are ready to take a hit on this.
• All the Top Underwriters and big title companies use and maintain their own Title Plants to save time, effort and above all MONEY. They no longer have to wait for the abstractor to send in the abstract so they are no longer on the mercy of the local abstractors. 
• When you talk about language barrier you are mistaken because we inherited English language from the British Gentlemen which is different than American English. The only difference comes when you write words such as "Colour" as "Color". Well that doesn't mean that we can't read and interpret documents in your native language. I am not denying that we understand all the probates, wills or divorces or complex documents however please note that whenever we are in doubt we pick up the phone and call our American counterparts to help us in understanding those documents which add to our knowledge and we make sure if that same document comes in another file then we refer to the previous old order.
• Helen says "How do online searchers check probate records or civil records for divorces or pending suits?  They are not online." I would say that my friend Helen is mistaken because these type of documents are available online and we review them all the time when we do an online search or prepare a commitment. We review the Property index, General index and taxes of a real estate before typing the results of the search. We then use these search results to type commitment. Our quality team which has six sigma certified members review the searches, commitments before sending it to the clients.

Now the second point that I want to make to my abstractor friends out there is that when I talk about offshoring title work to India. I am not talking about only online title searches. There are few other tasks that can be offshored. Does a local abstractor type a title report / commitment and send it back to title company. Do they type a fee sheet, order a payoff statement in refi orders, do they prepare a HUD statement ??

Well we do it over here in India and its is certainly not new to us. We've been doing it for over 4 yrs now. When it comes to typing commitments using abstracts scanned in by abstractors or by online records, we do it in 2-4 hrs.

So it is fairly clear that it is not only title searches that can be outsourced but other tasks such as typing commitments, tax searches, ordering and retrieving payoffs, lien clearance.

I am hoping that someone continues this thread by posting some meaningful threads and not blaming anyone.

First of all, my name is Helene, not Helen.  Would you check variations of my name since you clearly didn't read it correctly?  Second, please note that the Georgia website is not the official index and it clearly states so in the search disclaimer...it doesn't intend to replace a search of the actual records...without warranties.  So it is your problem if a document is misindexed or not online and you don't report it. Third, probate and civil records are not available online, neither are all liens, plats and cross-indexed items.  Prove to me that they are.  Do you have Plat Book 1 Page 1; do you have Mr. & Mrs. Smiths's divorce?   What about Mr. Smith's estate file, if he has one?  Would you then be able to find an affidavit of descent 10 or 20 yrs. ago online in all 159 counties in Georgia?   If you in India, can get all of these documents online, then you guys must have something on us in America.  Perhaps you are building your own "title plant" using American title searchers who are foolish enough to do work for you.  I certainly won't contribute to your efforts.

Perhaps we can put you to a test.  Let's see if you can do a complete, accurate title search online, one that is inundated with problems.  I'm sure I could dig one up and maybe someone else out there in another state could too.  If you get it right,  then I'll eat crow. 

Varun, it is clear you have never had the pleasure of examining the State of Ohio records.  As an Independent Title Agent for over 13 years, I can enlighten you to the fact that at least 34 of the Counties are not on-line and out of the remaining 54 only 30 of them have Indexes and Images available on-line.  The remaining 24 are indexes only and from reading comments from SOT readers and posters it is clear to me the index should never be relied on.  Some of the Counties have online probate and divorce but many do not.  I can tell you that because I like to look at the on-line records when I set up my orders.  Then I send to my favorite examiners (Doug and Rob) for the official search.  I would never rely on internet searches only. 

I can't tell you how many times I have received calls from other title agencies (who are too lazy to do their own job) requesting my help to find releases that should have been recorded by the lenders.  And low and behold......filed right under their noses....but mis-indexed. 

I have also found on numerous occasions mis-indexed mortgages, deeds and various other items (releases are the number 1 mistakes). 

So, I have to agree with the abstractors/agents that run and contribute to this site.  I am a firm believer in something a boss told me my first year in the title business - "there is a difference between a searcher and an examiner".  WORDS TO LIVE BY MY FRIENDS!!!!!  YOU PAY FOR WHAT YOU GET AND IN THIS ECONOMY EVERYONE IS LOOKING TO CUT AND SAVE BUT AT WHOSE EXPENSE. 

If I were you and the other India employees working/running these offshore services I would feel completely exploited by the corporations and their greed.  They pay you pennies and you allow them to get away with it.  I am sure you will say the companies coming over there are helping you and your economy but let me let you in on a secret......THEY ARE USING YOU!!!!!!!  You will see it is true when these title plants are no longer viable options once the losses come pilling in.  You say the Big Companies are prepared to take the hits - I have to laugh at this because there is only so much money to go around for losses and seeing how title insurance is a one-time premium (not a yearly form like casualty insurance - heath or auto insurance) I am not sure where the underwriters are going to get the millions of dollars in losses that are still to come.  Especially when you take into account the work you are doing.  I don't want to belittle you but I as stated before, I have been in title insurance for over 13 years (which is nothing compared to many of the examiners I work with) and I learn something new almost everyday about this business including examining.  I had really great teachers and with out them I would only know enough to do my job - which in the early years was escrow processing only.  When you say you receive training from your American counterparts, I have to wonder how skilled and knowledgeable they are as they are clearly sacrificing quality for quantity.  You are only as good as the teacher and in my experience there are not that many good teachers.  If you get thought by a bad agent you will be a bad agent. 

I have had cases where it took extra "days" to complete the exam because the entire thing was FUBARed.  It took a quite title action to fix one of them.....oh, do you know what that is???  You may want to contact your American counterparts if unsure. 

Sometimes even a blind squirrel gets a nut. Still Helene, I don't think you have much to worry about in terms of eating crow. Hmmm...it just dawned on me that this little American vernacular exchange is probably pretty hard to follow in Bangalore...like...oh....sub-leasehold chains of title with failed mergers, or... transferable development rights, or the ever popular standard land installment contract (Is it a loan?...is it a deed? is it an evolving equitable interest?...) The problem is that big finance and their wholly owned title subshittieries simply don't care about the product called Owner's Title Insurance any more. If they did they would not try to pass off this outsourced crap as the same insurance product they were selling ten years ago. It isn't, and the American people don't know what they aren't getting. If they did...they wouldn't buy it. Maybe the losses bound to occur from this little experiment will have the effect of making the Poobahs limit their exposure to  India to tandoori chicken and a Kingfisher beer once in a while. Hmmm...now I'm hungry.

A country like US should have the capability by now to have public records posted CORRECTLY online.

Varun, Did it ever occur to you that you have NO right to demand Americans spend our tax dollars providing you with assets that belong to us? For many counties the repository of records held at the courthouse are the single largest asset under the control of local authorities. I say under the control of because the database is owned by local citizens who pay the county to index and preserve the documents. Posting the records online to make them easy for you to exploit serves no useful purpose for local taxpayers and may in fact violate the rights of American citizens. The American people have no obligation to provide access to any of our records to anyone who is not physically present within the local jurisdiction.

Varum Sharma asks, "Is it the fault of somone doing an online search that the public records are not correct or mis-indexed".

Yes, actually it is, when an online searcher makes a claim that his work is derived from correct and and properly indexed "official public records".  Online county sites almost always have disclaimers that clearly state the records presented online are not timely, complete, or the same as those held at the courthouse. Many also state the online records are not suitable for legal research. Any online abstractor (from India or elsewhere) who does not heed the disclaimer of his source assumes responsibilty greater than his source, in my opinion.