Ellen,
I have worked for title insurance companies in this area. They are very good clients. They pay the market price for their orders. They offer a nice volume. They pay every month without fail. They are premium clients, and should be treated as such. If the lending institutions are getting into this business, and they are to proliferate that is great. However, we have also seen how the lenders have applied pressure to reduce abstractors' fees in the past. One of our client's recently told us that a well known national lender was insisting on $25.00 as a price for a current owner search. The searchers in this area refused the business. The lending institution was forced to order the searches at the market rate.You may see an increase in the volume of orders resulting from the new influx of business, but the pressure will probably remain to get the search completed for the cheapest amount possible.
In the scenario you have described, I would think that you would not charge for the current owner search in which there was a missed encumbrance. You would probably lose the title insurer as a client, but the search would have been defective. Depending upon when the mistake was discovered and corrected you might have to put a claim in with your e&o insurer.
In the scenario you have posed in which the inhouse searcher discovered a multitude of missed items by the independent, the independent searcher should probably get out of the business for something to which he better suited.
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