The Abstracting Community Is Not Without Blame

In a recent critique of TitleSmart, Ed Rybczynski made a comment about the abstracting community that deserves further exploration.

An Excerpt from Ed Rybczynski's blog, Title-Opoly:

The abstracting community is not without blame for the blitz by underwriters to create new delivery channels for title information. Abstractors have managed to exist somehow without group cohesiveness or identity. The content and appearance of work products can vary disturbingly while research parameters are questionable at best. Overall, abstractors have a reputation for ignoring delivery times and being difficult to contact. The fax machine may be the last technological advancement that was universally embraced by the profession. Consider this fact, it’s the year 2007 and the hand written title report remains the accepted norm rather than the exception in a major market like Baltimore. Future title business will be directed by sophisticated sources with quality control requirements along supply lines. Yes, the new generation of consumer is a sophisticated source of business with high expectations. It’s 30 years late, but brand accountability is finally a factor for title executives.

In January of 2005, at the NALTEA conference in Dallas, Source of Title hosted a hospitality suite to address this very issue. I proposed the idea of a Web-based centralized order management system for independent abstractors. I stressed the need of a single point of contact where their clients could place orders online, download them in digital form, and work with ALL of their abstractors with one log-in.

The idea was to open a stream of communication directly with the independent abstractors. It would allow the clients to work with the abstractor of their choice, but still retain the ease of a single point of contact system.

Although the idea was well received in Dallas, it seems that the abstracting community as a whole is, as Ed pointed out, "without group cohesiveness or identity." NALTEA has attempted to rally the abstractors to join together to address their common issues, but so many of the independent abstractors are apathetic, at best. They don't see the need to change from their routine that has worked for so long. They desire only to continue the way they have in the past.

Unfortunately, that may not be an option for much longer. There are too many instant title products that threaten to deliver a complete title search in under a minute. With technology passing the abstractors by, the clients expect to be able to download a file to plug-in to their settlement software - this is something that cannot be accomplished with a handwritten report and a fax machine.

What's worse, is that quality is becoming meaningless. The truly professional abstractors that are trying to sell quality are going to have a rough time when the underwriters are providing a fully electronic product and taking the risk for errors. An independent abstractor cannot compete with the underwriters in this arena of point-and-click title searches; its faster, cheaper, and virtually risk free for the title agent.

What do the abstractors need to do to remain a viable solution in this industry? They need to band together to promote the value of using a professional abstractor for their title evidencing needs; they need to lobby for meaningful licensing for abstractors; they need to educate the consumers and mortgage-backed securities investors of the risks of failing to properly search the titles; and, they need to be more receptive to adopting new technology. This is no easy task - and it cannot be accomplished by any single individual.

The abstractors need to realize that they are are not being represented by ALTA or their state land title association in these matters. Those organizations are controlled by the deep pockets promoting the instant title products. They lobby for changes that make them easier to implement - online databases of our nations public records, and, less strict underwriting requirements for insurability.

Only time will tell what will become of the independent abstractors. Soon after that, the fate of the independent title agent will be up for grabs as well.

Robert A. Franco
SOURCE OF TITLE
rfranco@sourceoftitle.com

Source of Title Blog ::

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Categories: Abstractors, Technology

1048 words | 3657 views | 12 comments | log in or register to post a comment

	Robert: I have one abstractor who ...
	Robert: I have one abstractor who insists on handwritten reports and mailing them. It's a big deal to get a fax, and they don't even retain a copy. If the abstract gets lost in the mail, they redo the search. We now use these folks in very limited circumstances. Before signing on to FATIC's ESP product, for years I asked our abstractors to at least give me report in WORD via e-mail so I could cut and paste some info. Not a single abstractor was interested. Now, ESP is not automated search, it's just electronically delivered product, an improved report. A human still does the underlying search and my staff does the examination. The abstracting profession is filled with independent people who don't like technology and don't like supervision. I had hoped that as time passed and abstractors retired that the younger people would get up to speed. Perhaps it's too late, I hope not. We need experienced, well trained abstractors who embrace technology.
	by Diane Cipa, General Manager, The Closing Specialists® \| 2007/02/02 \| log in or register to post a reply

	I understand. I love technology to...
	I understand. I love technology too, but I have to admit that we are still returning handwritten reports to our clients (via email and fax). Lugging a laptop around a courthouse is not a very attractive proposition for an abstractor and it would undoubtably slow them down. Typing the report after the fact, when they get back with their handwritten reports, would be a possibility, but that slows things down too. Too many clients, aren't willing to give the abstractors the time necessary to do this (you are the exception), and they aren't willing to pay more for the convenience. The majority of the Vendor Management Companies (VMC) have successfully negotiated fees so low that introducing new technology into the abstractors' businesses is just not feasible for most. And, they want everything back in 24 hours or less, further complicating the issue. Unless the abstractors can establish themselves as professionals, and get their clients to pay and wait for a professional product, little is likely to change. Until then, a service like ESP that converts the abstractors reports to a digital format is about the only workable solution.
	by Robert Franco \| 2007/02/02 \| log in or register to post a reply

	Just curious. What's the average c...
	Just curious. What's the average cost of an abstract - 60 year - in your area? We pay between $125 and $150.
	by Diane Cipa, General Manager, The Closing Specialists® \| 2007/02/02 \| log in or register to post a reply

	The fact that most independent abst...
	The fact that most independent abstractors don't take advantage of available technologies is precisely what has given us the competitive edge in our market. I agree that there's a lot to be said for doing things "old school", but one must also be willing to integrate new techniques into the mix. As with any business, the successful abstractors will always be the ones who are responsive to changes within the market. I, for one, appreciate the fact that our clientele are always challenging us to improve service and produce a better product.
	by Scott Perry \| 2007/02/02 \| log in or register to post a reply

	Diane, Around here you...
	Diane, Around here you can get a full-search for between $75 and $125. I haven't heard of any cheaper in North-central Ohio. However, I have heard in North Carolina they are doing them for $45.
	by Robert Franco \| 2007/02/03 \| log in or register to post a reply

	I own a Titlenet, a Title Abstracti...
	I own a Titlenet, a Title Abstracting business in Florida. I have 8 years experience in Florida, and an additional 6 years prior experience in Georgia. I had looked into these products a while back ago at an ALTA convention, but did not find anything affordable for a small business. If that has changed, please email me as I would like to stay on top of any possible ways of improving my product for the client without sacrificing turnarounds. I'm all for the licensing of abstractors. I even was licensed as a Title Agent before starting my business. Too many people are buying a book on the internet and thinking they know how to run titles. These books are not specific to the laws of each state and can be very misinforming. Unfortunately, I have met a lot of abstractors who do not know how to draw a legal for an acreage tract. I am thankful that my training was directly from a Real Estate Lawyer.
	by Angela Swafford \| 2007/02/05 \| log in or register to post a reply

	Can anyone tell me what technologie...
	Can anyone tell me what technologies are available and where to find them? I am especially interested in computer technology to assist in plotting metes and bounds descriptions. Any assistance would be truly appreciated.
	by Brenda \| 2007/02/05 \| log in or register to post a reply

	Try
	Try Johnson Mapping Software. Mike Johnson has presented a program called Deed Plotter at two of the NALTEA conferences. You can download a trial version of Deed Plotter from his Website.
	by Robert Franco \| 2007/02/05 \| log in or register to post a reply

	See? I hit one button on my laptop,...
	See? I hit one button on my laptop,and I lost my post. Continued.... I knew in 1982 that computers COULD make title searching easier, more efficient, etc., yet when Registers of Deeds in Maine began using computers in 2002, it was and IS a disaster. Maine is still manipulated by County government. The Registers of Deeds chose different companies with which to trust scanning documents and putting them online, hence no county to county to state consistency. The initial results were a farce. Horrific errors (scanning technology is as inconsistent as different views of potty training) and even now, when an error is pointed out, we are told "it's being addressed." We abstractors/examiners demanded meetings with our employers, title insurance attorneys....anyone who would listen... about missing pages, disappearing documents, inaccurate records. Some of the counties in which I do research are "paper free," meaning we have to rely on what we see on the computer/no more books/whether the computer records are accurate or not. The title companies & attorneys met with the title INSURANCE companies (First American and Lawyers Title in this case) and everyone decided what risk they were willing to take (a lot, as it turned out), and we abstractors/examiners have been at the mercy ever since. As for the fax machine being the last level of technology we have adopted. The fax machine is the technology YOU have adopted. All my clients want the finished product FAXED IN within 24 to 48 hours. I could drive back from the registry in 2 hours, re type the info onto an email, scan in the documents then email the results, but it would cost you double what it costs now, and most of my clients don't want to even pay for the basic service, let alone for time spent transcribing the material from handwritten to computer. In the past 3 years, I have seen my livelihood collapse. I have lost my home, filed bankruptcy. Yet, for some crazy reason, I hold onto this profession. I love being on the road. I love being self employed. I love doing research. I am trying to figure out how to better service clients and expand my volume to make more money. Meantime, many firms from whom I received work, have their secretaries do the searches online in their offices. God knows what qualifications these people have to do the searches....I get the tough ones. Or the searches from Registries that have not yet gone online, lengthening my travel time by hours in order to stay in business. Right now, in Maine, it's 20 below 0. It costs $35. to fill my gas tank. People call me from Texas at 10 a.m. asking if I can do a rush title for a client who wants it TODAY. I cut short work for a client I know is reliable in order to make an impression on a new client and say "yes, I'll do it." I get to the registry, go through an extensive security/xray check, find no order sheet, call the contact person, who informs me, "Oh, they cancelled the order, and since they didn't have your phone number, they emailed you a cancellation." I never got the email cancellation, the "client" argued with me about how she was protecting me by not giving out my phone number, AND I put aside a regular client's work to try to impress a new client. When we are on the road, we CANNOT embrace, as much as we would like, the technology you have at your fingertips in your offices. And no one in the office will possess the skills it took us years to acquire to search titles. I have much more to say about this. Kate Cone, J.D. Harpswell, Maine
	by Kate Cone, J.D. \| 2007/02/05 \| log in or register to post a reply

	I have to chime in here to echo wha...
	I have to chime in here to echo what Kate has just posted. I serve seven rural counties in Central Virginia. Almost all of my clients require 24-hour turnaround on searches. I average almost 200 miles a day. At $.50 per page for copies, I cannot afford to make copies of all documents, bring them home, scan them into a computer, post them online or in PDF format, and continue to do current owner searches for $50. I would not be able to do enough searches in a day to actually make a living doing abstracting. I have no aversion to technology. I currently run three websites of my own for various endeavors. But the idea of independent abstractors entering all their searches online, for instance, is almost laughable, unless there was some kind of universal way to do it. I have about 20 clients. There is no possible way I could get home after 9 hours on the road, then spend the next three hours doing data entry on four or five different web sites. I don't know what the answer is. But to just blame abstractors as some kind of dinosaurs unwilling to change with technological advances is insulting, simplistic and it is blame-shifting. Some of you may have the fancy office software and point-and-click technology. But we are the ones that have spent years trudging from courthouse to courthouse, developing an expertise in searching 15-lb. leather and canvas deed books to get you the information you need. We are working out of our cars. And every day, I MEET that 24-hour deadline you absolutely MUST have. Now, you want it in a form that makes it the easiest and prettiest for you that it can be, and you want US to provide it that way AND you still want your 24-hour turn-arounds. Not in these rural counties. Can't happen. I'll try whatever technology comes down the pike, frankly. I'm even getting a laptop and WILL lug it around the courthouses so that I can give you the prettiest digital product I possibly can. But don't get mad and cut me off if it means you miss your 24-hour turnaround once in awhile, ok?
	by Bruce Murch \| 2007/02/06 \| log in or register to post a reply

	Kate and Bruce are exactly correct....
	Kate and Bruce are exactly correct. I think in my comment above, I indicated that the forces that clients place on their abstractors make it difficult for the abstractors to adopt new technology. Too many clients, aren't willing to give the abstractors the time necessary to do this (you are the exception), and they aren't willing to pay more for the convenience. The majority of the Vendor Management Companies (VMC) have successfully negotiated fees so low that introducing new technology into the abstractors' businesses is just not feasible for most. And, they want everything back in 24 hours or less, further complicating the issue. I am in the same boat. We do searches for over 50 clients each month. The clients that are pushing the new technology have all adopted their own proprietary systems, and some want to charge the abstractors to use it (ValuAmerica). That is just ridiculous. The proposal I made in January 2005 was for the abstractors to join together to create their own portal that would be open to all abstractors and their clients. If we all adopt the same standard it would be feasible. Though we still have the problem of paying for it. It would undoubtably benefit the clients, but they have to be willing to pay more for it, or it simply won't happen. My comments weren't directed toward any particular abstractors - but as a whole, the abstractors have not been able to work together in any meaningful way. NALTEA is trying to get the abstractors on the same page, but it is a daunting task. We, as abstractors, need to be united and insist that we be given the time necessary to return a quality product, and we have to charge accordingly. Abstractors in general have continually cut each others' throats by dropping prices a few dollars here, and few dollars there. Meanwhile, more and more clients are using thin title plants and eliminating the abstractors altogether. Too many abstractors sit back and say "it isn't affecting me." But, it will.
	by Robert Franco \| 2007/02/06 \| log in or register to post a reply

	Sorry to chime in late, just rememb...
	Sorry to chime in late, just remember abstractors, the harder our work is to reproduce, the harder it is for vendors to keep copies, reuse and sell later. We cut our own throats with too much technology. If clients want computer perfect titles, they should be willing to pay for the added expense, otherwise they can absorb the additional staffing cost to reproduce it themselves.
	by Denald McCarthy \| 2007/02/14 \| log in or register to post a reply

Source of Title Blog

Robert A. Franco The focus of this blog will be on sharing my thoughts and concerns related to the small title agents and abstractors. The industry has changed dramatically over the past ten years and I believe that we are just seeing the beginning. As the evolution continues, what will become of the many small independent title professionals who have long been the cornerstone of the industry?

Robert A. Franco
SOURCE OF TITLE

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