My entree into the blogosphere was absolutely seated in anger.
In the late summer of 2006, my product and livelihood – title insurance – was under attack. Major media outlets smelled a rat and reports of multi-million dollar fines and penalties and class action law suits fanned the flames of what might have been the beginning of the end for title insurance as a product.
Our trade association, ALTA, and our state chapter, PLTA, seemed incapable of launching any kind of an effective defense and so I poked my toe into the Internet and started reading and commenting and decided almost immediately that a blog would be the most effective tool for communication.
What was my message? What did I need to say?
I needed to explain title insurance in a way that consumers and the industry would understand. I needed to defend title insurance as a critical component in a real property transaction.
I started with Title Insurance Talk as a consumer facing discussion, then launched Radical Title Talk to scream at industry insiders who were killing us with corruption.
You see, it wasn’t the product – title insurance – that was the problem, it was the delivery system. The business of selling title insurance to the consumer – even if only a loan policy – has become so corrupted that the product itself is beginning to lose its identity and resembles an icon whose link is lost.
Layer upon layer of money and revenue sharing is squeezed into the title insurance transaction and the consumer is virtually forced to contribute to a payola system of referrals without much chance of opting out or encountering free competition that would provide them with a valid choice that in the end would improve quality or price.
All the focus on money has pushed search standards and expertise out the door. The product being purchased in most transactions now is but a shadow of what was before.
We read on ALTA and title insurance sites about the work done to clear title, but does anybody really understand how rarely these services are performed now?
There are so few qualified abstractors and so few experienced examiners and so few shops that write title insurance with the expected services behind the policy that, well, I just don’t know what to say.
Sometime after starting both blogs, two new products came to market, TitleSmart and Next Ace. TitleSmart is a fully automated product. Next Ace is very close to fully automated. Distressed by the potential damage to public records, I launched a third blog, Coalition Petition.
Blogging in anger for long periods is not healthy nor enjoyable. I believe it has been necessary. Ed Rybczynski captured the need well in his Title-opoly post, Radical Title Talk: The Voice of A Repressed Industry.
I have tried to walk away from Radical Title Talk twice – once last May and most recently last week.
Why can’t I step away? I can’t because Radical is a place where plates spin in a way they don’t spin elsewhere and for some reason in subtle ways, the spins make a difference.
With each blog, like you, I have an idea who is reading. When the secondary market started to collapse, I felt I needed to reach out to some of the readership and get their attention. You might think that’s egotistical but how do I know who understands the mortgage market and who does not these days. I always believe I should do my part and so I did so at first through Coalition Petition with this post, followed by this post which I simultaneously put up on Coalition Petition and Radical.
The mortgage crisis brought me back into Radical and I promised myself that I would leave it when things settled down once again.
Recently I have taken some comfort in the likely intervention by HUD and state regulators in the area of title insurance and thought I might just lay down arms and allow less vitriolic discussions to move the cause forward.
Well, the earth shook beneath that comfort on Friday and Radical awoke once again. I couldn’t decide whether to vomit or cry. I did neither.
I’m going to await the news of this next week to see whether or not duty calls. You see we each must ask ourselves when faced with certain circumstances…
if not you, who? if not now, when?
I just agree with you title insurance and a lot of insurance products should be more understood by people. Thank you for what you do.
Hi Diane – i didnt see where I could contact you – I have a question not related to this post – email me?
thanks
Owen: I can be reached via e-mail at DianeCipa@gmail.com.
I can’t speak to the title side of things, but in the mortgage world, if I were to take up the same battle, I would have to accept that it would be never ending and no new product would solve the issue of bad mortgage brokers doing bad things to customers.
The problem is this: the barrier to entry is simply too low and enforcement is virtually non-existent in regards to licensing mortgage brokers and policing their actions.
As a former equities trader / stockbroker, I had to get a a multitude of licenses in order to be able to interact with the public. These license are closely tracked and SEC enforcement is second to no other industry policing I’m aware of.
First it was the series 7 and 63 to work with clients right out of the gate, much harder than any real estate license. Then when I wanted to trade equities it was the Series 55. Then when I wanted to run an office, I needed to become a Licensed Principal and get the Series 24, which is many times harder than the California Mortgage Brokers License….in fact they aren’t even in the same league. Then there was another license for options and on an on.
Each one of these licenses was many times harder than any real estate / mortgage testing I’ve ever done, the background checks were more intense, and the penalties and enforcment were many times more stricter than anything that might ever occur in real estate / mortgage enforcement on a state or federal level.
What’s the point? As long as the barrier to entry is so low in any given industry, there will be bad people doing bad things. This doesn’t mean bad things don’t happen in the Brokerage Industry, the crooks there are just a whole lot smarter than your typical real estate / mortgage scammers and their risks tend to be more calcualted and the consequences are taken more seriously….. which on the whole, I believe signficantly reduces the volume of bad people doing bad things………
It’s great to be a voice of change, just don’t do so under the pretense that your work will ever be done or you will become an unwilling martyr….
“..which on the whole, I believe signficantly reduces the volume of bad people doing bad things..”
Ahem…Jérôme Kerviel €4.9bn.
Trace, ‘volume’ can be measured in many ways.
Paul: I was speaking to American enforcement and in that example he was an institutional trader trading for his brokerage, not taking advantage of specific clients or the general consuming public, I believe, as is the focus of Diane’s post, although there are incident on US soil of stockbrokers mistreating their clients, to be sure. Of course there are going to be bad things happening regardless of ANY enforcement done, there will never be 100% lack of impropriety.
More to my main point, I would venture to guess that the “Volume” or weighted average in terms of incidents or numbers of professional impropriety occuring in the real estate / mortgage space is much higher than what happens in the securities world without question. Again, the securities industry is policed more stringently, there is a higher barrier to entry, tougher penalties, a central governing body, and thus inherently there is a reduction in impropriety…..this doesn’t mean bad things dont’ happen, it just means that less bad things happen and enforcement is much stronger.
Again, as long as there is a low barrier to entry, there will be more bad people entering the market in any given industry….. I think that just goes without saying…. barrier to entry equal standards and the lower your standards are the less quality people you will attract by definition.
Trace, excellent comments and Diane excellent post!
More to the point..
“I started with Title Insurance Talk as a consumer facing discussion, then launched Radical Title Talk to scream at industry insiders who were killing us with corruption.”
…call me a dreamer (I know), but I prefer educating the ‘bad people’ on the way they should go, rather than increased govt involvement in my businesses.
In this regard, I’m thankful for the bloggers in this thread and on this site, for we have a positive message and that becomes contagious.
You’re right. Thanks.
Admirable intentions, Diane, and excellent comments. My 2 cents says that there’s no crime when there’s a cop on the beat. Bad people won’t do bad things if they know they’re being wtached. That calls for transparency and monitoring. Trace is absolutely correct that raising the bar would significantly reduce bad things being done by bad people.
In case I didn’t mention it, I too believe, Diane’s inentions are beyond admirable, I can tell she is passionate and those are the people I like to work with and interact with. I was attempting to address her comment about stepping away and how that might not be possible given her passion! I don’t think we will reach a time when the coast will be clear, just like with all crime…. it just doesn’t seem to ever stop….
Hi Diane – i didnt see where I could contact you – I have a question not related to this post – email me?
thanks