I know that NALTEA has some very positive goals because I have been so closely involved as a board member, but many abstractors out there don't know about them.  There is so much that NALTEA needs to do to be an effective organization, but it is difficult because we don't have the vast resources of other associations in our industry.  Look at ALTA, any of the state Land Title Associations, the American Legal and Financial Network, TAVMA, etc.  They all have more members, much higher dues, and most importantly a full time staff to address their needs.

NALTEA faces a lot of challenges because the abstractors are so divided and competitive, not to mention they don't make a lot of money and they are cautious about spending any of it on something that they haven't seen a "need" for.  NALTEA has tried to keep membership affordable, at $200/year, and that means that everything that gets done is dependent on volunteers.  Volunteers that are very busy trying to manage an abstracting business in this difficult time of increased competition and declining fees.  It is tough to do all that needs done with NALTEA on a part-time, volunteer basis, but many are trying.

What should NALTEA be doing?  What would I like to see NALTEA do?  Well, here is my wish list:

• PROMOTE LICENSING:  Send letters, make phone calls, and meet with state legislators, departments of insurance, HUD representatives, etc., to let them know that they are heavily regulating an industry that bases every title insurance policy on a search obtained from a completely unregulated part of the industry.  If the title search is inaccurate, all of that regulation is wasted.  Maybe they aren't aware that title searches are completed by the lowest bidder and no experience is required to enter the industry. 
• RESPA REFORM:  Communicate with HUD to let them know that $45 title searches are being marked up to $250 on the settlement statement.  Press upon them the value that consumer IS NOT getting ever since the industry decided to issue title insurance on a "short-search".  Not to mention that the savings which have resulted are not being passed on to the consumer.
• INSURANCE RATING AGENCIES: Fitch, Demotech, and the like should all know that the insurance companies are exposing themselves to greater risks of claims by allowing their policies to be issued with less than a full search showing marketable title.  The policy insures marketable title, yet they are being issued without evidence necessary to clear the title in many cases.
• INVESTORS and GSEs:  The mortgages that are sold to investors on the secondary market should be made aware that their investments are not as solid as they think.  Granted they are insured, but when they are servicing mortgages that are in default and they can't turn the assets over, because of title problems that could have been avoided by a thorough search conducted by a professional abstractor, it costs them money. 
• OTHER ASSOCIATIONS AND CONSUMER ADVOCACY GROUPS: The general public does not understand the title industry - to them its just another fee they have to pay.  However, they are paying the fee and they have a right to know what it is that they are not getting for their money.  Public awareness campaigns launched with groups that are looking out for the consumer should be aware of what goes on at our level of the process.  The National Association of Realtors is one of the largest associations that represents the buyers of real estate, NALTEA should be communicating with them.  The National Association of Mortgage Bankers, and the National Association of Mortgage Brokers should also be included since they represent the insureds on the loan policies.
• E&O CARRIERS:  Information should be shared between NALTEA and the various E&O carriers that are seeing claims rise.  Some insurers are abandoning that line of insurance as claims and rates continue to rise. 

That would be a good beginning... letting the rest of the industry know what is going on.  Once NALTEA has gotten their attention, the next step would be more proactive, developing solutions to the problem.  In that regard, I would suggest:

• LICENSING:  Developing a proposal for the structure of licensing that could be presented to interested parties. Who would administrate it?  Who would be eligible?  What would be required to obtain and maintain a license? 
• TITLE STANDARDS:  Developing a proposal for the minimum title standards that should be a guide for the searches required on insured property.  Many states have standards created by the bar associations, it may be a simple matter of adopting them and suggesting that they be followed to ensure that the consumers get the protection and peace of mind that a title policy should offer.
• E&O INSURANCE:  With the information shared with the E&O carriers, NALTEA should be able to compile a comprehensive report to show the effects that inexperienced, unregulated abstractors and short-searches are having on the industry.  This would help identify the problems and allow someone to take action before E&O insurance becomes too expensive, or non-existent in the title industry.

This is by no means a comprehensive list... I'm sure many of you can think of other worth while avenues that NALTEA could pursue to make our industry a better place.  The problem isn't that NALTEA doesn't have good goals and objectives, the problem is that it will take a lot more support to accomplish them.  More members, more money, and more volunteers would go a long way toward getting things moving in the right direction.

Source of Title has over 2,400 abstractors listed; NALTEA has right around 100 members.  I don't believe that there aren't more abstractors out there who care about the future of the industry.  Membership is only $200 each year - very affordable - if all 2,400 abstractors here joined, NALTEA would have $480,000 to hire a director, and a staff, develop the materials necessary to lobby effectively for changes, and maybe make a big difference in securing the future of the professional abstractor.  Think what a powerful force NALTEA could be with that kind of organization and support.

Realistically, I don't see us getting that large.  I know that it will take a lot of time to get to the point that we can afford to do all of the things I have mentioned.  However, anything that we can do to work toward these goals is a positive step in the right direction.  Even though a small group of volunteers, operating on a very tight budget, will not be able to have the impact we would all like, it is certainly better than doing nothing at all... and who knows, it may be enough to reach the right person at the right time and make a small difference.

There you have it... sorry for the long post... I know that is a lot to read, but in an effort to get everyone on the same page I thought it was necessary.  All comments are welcome and if you aren't yet a NALTEA member, everyone is welcome to join.

Best,
Robert A. Franco
SOURCE OF TITLE