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Source of Title Blog

Get The Water Hose
by Robert Franco | 2007/02/15 |

The Ohio legislature has once again watered down S.B. 185. Originally, the bill required "that any and all subcontractors the title agent uses maintain E&O coverage in the minimum amount of $50,000." In a recent Administrative Rule, they have added "unless the title agent’s E&O Policy provides for such subcontractor coverage."

What does this mean? Well for starters, it means that those big vendor management companies that carry errors and omissions coverage for work performed by their subcontractors can continue to use unqualified abstractors that do not have the coverage, or aren't even able to get it.

Why has the legislature declined to even attempt to regulate the title abstractors? Probably because it would be an enforcement nightmare. Because they do not require any licensing, or any minimum level of requirements, they would have a difficult time trying to ensure compliance. But, that is no reason to water down the bill. It should be a sign that they have missed something - a sign that they need to pay more attention to those who prepare the abstracts that become the basis for every insured real estate transaction in the state.

Why is it that every other segment of the industry is regulated: title agents, mortgage brokers, Realtors, appraisers, surveyors, etc. Yet, the foundation of insurable title is the title search and we allow anyone with a pen and fax machine to provide that integral service. So heavily regulating the rest of the industry and ignoring the abstractors is much like closing the barn door after the horses escape. Even if every other person does the best job they can, a faulty title search still places the consumer in jeopardy of losing their home. The best title policy issued by the best title agent is subject to the flaws contained in the title search.

Abstractors need to be licensed. Its not just good policy, its imperative. States should not be shying away from regulating abstractors, they need to develop much more rigorous standards and ensure that those providing title evidence are well qualified to do so.

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

Source of Title Blog ::

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Categories: Ohio Legislation

499 words | 2152 views | 8 comments | log in or register to post a comment

	I disagree. The LAST thing that I ...
	I disagree. The LAST thing that I need is for some politician or government bureaucrat who knows NOTHING about my profession or the work that I do to start dictating to me on how I should conduct myself or my business. I believe a better solution is for the abstracting community to take a pro-active role in policing its own ranks. The formation of NALTEA and other such organizations has been an important first step toward that end. While I concur that government regulation is sometimes necessary, it often creates more problems than it solves. Let's not be so eager to abandon a common sense approach in favor of a bureaucratic "cookie-cutter" solution.
	by Scott Perry \| 2007/02/17 \| log in or register to post a reply

	We should Hail Legislation!Abstract...
	We should Hail Legislation!Abstractors and small Title Agents do not have the power, authority or money needed to police themselves. "Good" abstractors are being replaced by the fastest, cheapest, least competent. I believe we need help from the legislature to license abstractors to weed out the incompetent.
	by Jeanne Johnson \| 2007/02/19 \| log in or register to post a reply

	This is all a moot point when facin...
	This is all a moot point when facing automation. Take a peek at this: http://radicaltitletalk.blogspot.com/2007/02/across-board-fatic-disintermediates.html
	by Diane Cipa, General Manager, The Closing Specialists® \| 2007/02/19 \| log in or register to post a reply

	Ms. Johnson: While I c...
	Ms. Johnson: While I can see your point, my argument is that regulatory action should be used sparingly and ONLY as a last resort. The reason "good" abstractors are being replaced by the "fastest, cheapest and least competent" is because we allow ourselves to be. We've got no business running to "big daddy government" to bail us out of a mess we ourselves have created. Do you really want to place your livelihood in the hands of those same wonderful folks who brought you the DMV?
	by Scott Perry \| 2007/02/19 \| log in or register to post a reply

	Staff is changing over to LTIC envi...
	Staff is changing over to LTIC environment while we ditch FATIC as they have ditched us.
	by Diane Cipa, General Manager, The Closing Specialists® \| 2007/02/19 \| log in or register to post a reply

	Seems like the lesser of two evils....
	Seems like the lesser of two evils... if you can even say that. I worked with an agent of Commonwealth prior to the LandAmerica merger. It wasn't long after that when Commonwealth began using their large network of direct operations of Lawyers Title offices to take back many of the referrals that Commonwealth had previously directed to their agents. Whether it is automation, or competition with direct operations, I don't think there is much difference between the Big 5. If there is, its surely just a short term variation until they are all up to speed with each other. I would think that to truly get back to an underwriter that is not competing against your own interests you would have to switch to a smaller regional underwriter... but there again, you also lose out on some of the benefits that the larger companies have to offer. And, they all do offer something to their agents. Best of luck with the change, you will have to keep us all posted.
	by Robert Franco \| 2007/02/19 \| log in or register to post a reply

	I agree. Since I have LTIC in plac...
	I agree. Since I have LTIC in place it's a fast switch. I'm meeting with Old Republic next week to discuss options. I'll likely compare three before deciding on a home for most of the business.
	by Diane Cipa, General Manager, The Closing Specialists® \| 2007/02/20 \| log in or register to post a reply

	I understand. I do like Old Republ...
	I understand. I do like Old Republic, they are my primary underwriter. For a while, they didn't have any direct operations, but they have recently acquired a title company and seem to be moving in that direction. I can't say that I blame them - that is how the game is played these days. As far as I know, they are not working on any automated title search products, but I think that to compete in the market place, they may have to adapt. If there are big lenders that are moving toward utilizing those products that promise a faster turn-around time, they will be forced to do it to compete. Its a big mess - the Big 5 have to play catch up with each other to maintain their market share. Meanwhile, nobody is looking out for maintaining reasonable standards.
	by Robert Franco \| 2007/02/20 \| 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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