Does ALTA Support Offshoring?
Ed Rybczynski has an interesting topic on Title-Opoly today, Now What?... along with a poll: "To protect its members and the public at large, should ALTA take a stand against the offshoring of title searches?" Go read it, and vote (it's okay... I'll wait).
by Robert Franco
| 2007/12/26 |
It has really made me wonder, what exactly is ALTA's position on offshoring? Does it have one? I was unable to find a definitive statement on ALTA's Website, and the articles that they have chosen to publish seem to compound the confusion with contradictions. While I certainly cannot determine what position ALTA officially takes on the offshoring issue, I think it is safe to say that it does not oppose it. If it does not support it, it would seem that at the very least, it has accepted it.
As for the leadership of ALTA, Gary Kermott, the President of ALTA, is the Vice Chairman of First American. First American is one of the leaders in the efforts in the offshoring initiative and earlier this year they announced their plans to step up their overseas activity.
Source of Title Blog ::
In 2003, ALTA published an aricle, Offshore Outsourcing: A Case Study, which highlighted the success of First Dakota Title's experience.
“We were wondering how we were going to do the abstracts,” says Anderson. “It seemed to us that they were time intensive, labor intensive and redundant. We considered what our offshore data entry firm was doing for us already: looking at the documents, determining who the grantors and grantees were, locating legal descriptions, and adding recording dates, filing dates, and document numbers. Then we thought: An abstract is basically a recompilation of that information. In addition to identifying bits and pieces, you’re retyping the document in the format required for an abstract. So we said, ‘They should be able to do that.’ And that started the wheels turning.”
First Dakota Title’s experience with offshore data entry began in 1989, before the company opened its doors. Anderson had averted a financially burdensome late start up by hiring a company called HDEP International to help create his backplant. A Honolulu based firm with data entry facilities in Manila, Philippines, HDEP took responsibility for the entry of 600,000 records—about half of First Dakota Title’s entire two county project. Anderson was pleased with the speed, accuracy, and motivation of the Manila operators.
Since then, the company has continued to rely on offshore outsourcing for an expanding array of products and services.
In 2005, ALTA reprinted an Inman News article, Making A Case For Outsourcing To India: Mortgage offshoring reduces costs, not U.S. jobs, panelists say.
"Rumors of the American white collar sector's death are premature," said Prashant Kothari, Clark's fellow speaker at the "Benefits and Pitfalls of Outsourcing" workshop. The U.S. has fewer than 700,000 employees in India, compared to the 140 million people employed in the U.S., Kothari, the president of outsourcing firm String Information Services, said.
"Outsourcing is not new to the mortgage industry," Kothari pointed out, saying that domestic outsourcing has been around for some time.
Vendor management companies for mortgage brokers are experiencing explosive growth because of the popularity of outsourcing, he said. Information technology is the most commonly outsourced function, and India is the country where these jobs most often go, according to Kothari.
There were no layoffs as a result of the outsourcing, Clark said. Employees were migrated into new jobs instead.
"First and foremost, top management has to buy into offshoring," Kothari told the audience. "Everyone must buy in. Introduce it slowly." Speaking of his company, he said, "We haven't replaced any workers."
The 2007 ALTA Tech Forum included a segments entitled Outsourcing Turns To Post Closing, featuring panelists from String Information Services and HDEP International.
Title production has been outsourced for some time now, but is there more you can do to increase efficiency? Have you considered post-closing tasks? Your competition has! Title agents and settlement service providers have begun outsourcing recording, post closing quality control, lien releases, policy production, and more. Join our panel of vendors and industry customers to learn how you can take advantage of the latest trends in outsourcing.
On the other hand, in 2006 ALTA reported Americans Increasingly Concerned About Outsourcing Personal Data, Curvey Reveals.
Fifty-one percent of those US adults surveyed said that they did not want a US organization to send sensitive personal information such as social security or driver's license numbers to a local company in another country. Opposition was higher when it came to sharing even more sensitive information: 60 percent didn't want their credit or debit card account numbers shared with an offshore company; 64 percent opposed having their employee records shared; 73 percent opposed having their banking or home mortgage information shared; and a whopping 83 percent opposed having their health records shared with a local company in another country.
"That so many Americans are concerned about sensitive personal data going overseas isn't surprising given the growing threat of identity theft and general misperceptions about outsourcing itself," said White & Case partner Steve Betensky, who regularly advises companies on outsourcing issues. "But what makes this so challenging for US companies is that while consumers don't want their information sent oversees, 73 percent of US adults surveyed also said they are unwilling to pay higher prices for products or services if that would ensure that their personal information would not be outsourced offshore."
Betensky adds that the problem is further compounded by the fact that 82 percent of survey respondents felt that new US regulations were needed to ensure that offshore companies had adequate security and privacy safeguards in place -- despite the fact that many industries such as healthcare and financial services are already strongly regulated.
What is most perplexing to me is the make-up of the ALTA membership. I checked their online directory to see what their membership looked like in my home county. There are seven ALTA members here: six are single-person, independent abstractors and one is a title agency. Of the three large title agencies in town, only one is listed. There are four small independent title agencies here and none of them are listed as members. We no longer have any of the large direct operations in town.
So why would that be? I know a few of the independent abstractor members and they have joined because their E&O insurance is through TIAC, which requires ALTA membership. I am a former ALTA member and that was the main reason I joined. When I realized that their interests were not representative of mine, and that I could obtain E&O elsewhere and save the minimum annual dues of $460, I discontinued my membership.
I don't think that most abstractors think in terms of what "interests" ALTA represents or how that may effect them in the long term. Abstractors are more of the "what do I get" type. If they get a discount on E&O insurance, they will sign up without thinking about what might become of their future if their professional organization doesn't look out for their best interest. Perhaps the best way to describe that attitude is "short-sighted."
Would ALTA be better off taking a strong stance opposing offshoring? I don't think so. Those who are most likely to be harmed by offshoring don't really care about the inner-workings of the industry. And, the biggest companies who pay the top-tier dues of $32,000+, the major underwriters, are the ones leading the charge to ship jobs to India, and other overseas destinations.
It is understandable that ALTA would avoid taking a position on this, and certain other issues that are not shared by all of their members. It would be next to impossible to adequately represent the various factions of the land title industry - underwriters, independent agents, those who operate joint ventures and affiliated businesses, and abstractors. But, it would be nice to see some guidance from ALTA when these issues could have such a major impact on the future of the industry.
There most certainly are some small companies and individuals who would welcome the support from ALTA. The problem is that there are few who care enough to notice what ALTA does... or doesn't do. Other than the discount on their E&O insurance, most probably couldn't tell you anything about ALTA.
As for me... I'm sure they don't care enough about my $460 dues to listen to my rantings. When I let my membership lapse, I sent the then director an email to let him know why I wasn't renewing. I didn't even warrant a reply.
Robert A. Franco
SOURCE OF TITLE
Categories: Land Title Associations, Title Industry