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Source of Title Blog

Show Me Your Qualifications
by Robert Franco | 2007/05/21 |

Missouri, the Show Me State, says "Show me your qualifications." Diane Cipa brought Missouri SB 635 to the attention of abstractors in a post entitled 'Hey, abstractors, looks at this.'

Here is an excerpt from the bill:
If the title insurance agent delegates a title search to a third party, the agent must obtain proof that the third party is qualified by the rules and regulations established by the director.


Because Missouri is one of the few states that requires licensing for abstractors, I would presume that a valid license from the state would be presumed to indicate that the abstractor is qualified. However, from what I have heard, Missouri doesn't require a test for abstractors to get the license. It is merely a matter of completing a form and paying a fee.

Missouri currently has legislation that deals with the qualifications of third-party title searchers. I am unable to see how the new bill adds anything meaningful. The current statute, Section 381.115(5) says:
If the title agency or title agent delegates the title search to a third party, such as an abstract company, the agency or agent must first obtain proof that the third party is operating in compliance with rules and regulations established by the director and the third party shall provide the agency or agent and the insurer with access to and the right to copy all accounts and records maintained by the third party with respect to business placed with the title insurer. Proof from the third party may consist of a signed statement indicating compliance, and shall be effective for a three-year period. Each violation of this subsection is a class C violation as that term is defined in section 381.045.

I have been unable to find anything to clarify what exactly the "rules and regulations established by the director" means. The statute very well could have read "If the title insurance agent delegates a title search to a third party, the agent must obtain proof that the third party is duly licensed by the state as a title abstractor." So why doesn't it say that?

Should we presume that an abstractor is qualified if he is licensed by the state? That would make sense. However, because licensing is a simple matter of completing a form and paying a fee I don't know how holding a license would "qualify" one as a title abstractor. In order for licensing to be effective in this regard, there should be a test and some sort of continuing education requirements.

As I have mentioned many times before, this is exactly the problem faced by many title agents in nearly every state. There is no real way to know that an abstractor is qualified unless the agent has a long standing relationship with their abstractors and is well aware of their experience and capabilities.

Every state has a system of regulating the title industry from the top down. That is simply not a good solution to the problem. Regulation needs to be implemented from the bottom up - the title search is the foundation for the title insurance policy. If you don't have meaningful regulation of the title abstractors, there is little point in placing these kinds of regulations higher up the chain.

Simply put, until you have some way to designate who is qualified to produce title evidence, how can you require that the title agents use qualified abstractors?

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

Source of Title Blog ::




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Categories: Abstractors, Missouri Legislation

846 words | 3933 views | 1 comments | log in or register to post a comment


Great comments on licensing! Havin...
Great comments on licensing! Having relocated to MN from NY in 1998, I was absolutely shocked to find out that most licenses in MN have no test, except for Abstractors and Realtors. In NY when I became a Notary (many moons ago), there was a 3 hour test! MN you merely have to have no criminal record and pay a fee. The Abstractor's test was actually quite comprehensive to my surprise, although there are no classes. I also am an Abstractor (licensed in MN)/Examiner and paralegal for 30 years now and learned on the job from an attorney who graduated law school in 1940. I truly believe there should be testing in more of the required licenses. to verify knowledge and ability to perform the job at hand. Since there are no classes, I have taught my 20 year old daughter how to "search" and she enjoys it very much. Hopefully we are not a dying breed.  
by Anita Backlund | 2007/05/31 | log in or register to post a reply
Source of Title Blog

Robert A. FrancoThe 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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