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Source of Title Blog

Okay.... Oklahoma IS Different
by Robert Franco | 2008/06/25 |

According to a Tulsa World reporter, Mick Hinton, "Oklahoma and Iowa are the only states in the country where abstractors are part of the process of selling land."  I think there are several thousand abstractors who use Source of Title who would disagree with Mick.  I know that I have been abstracting in Ohio for over 15 years... imagine my surprise to find out that I wasn't a part of the process of conveyancing land.  What have my clients been doing with my title work?

My knee-jerk reaction was that this reporter didn't have a clue about abstracting... however... he may not be completely wrong.  Abstractors most certainly are a very important part of the process in every state, but not like they are in Oklahoma.  Abstractors play a very different role in Oklahoma than most other states and I can see why some would question the system they use.

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Unlike most other states, not just anyone can become an abstractor.  The requirements for entering the business are extremely restrictive.  Though there are other states which require licensing, most of them merely require the payment of a fee and maybe a test.  Oklahoma goes far beyond that.

In order to become licensed, an individual must be at least 18 years old, of good moral character, score at least 70% on the abstractors examination, and not have been convicted of a felony or crime of moral turpitude.  The individual must also make an application to the Abstractors Board for a certificate of authority for each county in which the applicant desires to do business and provide proof that he has errors and omissions insurance or a bond for each county, and that he has access to an abstract plant available for use for each county for which abstracts will be prepared.

1 Okl. St. § 28.  Independent set of abstract books or other system of indexes required

   In addition to the bond required any person, firm, corporation, or other entity not engaged in the business of abstracting on January 1, 1984, desiring to enter into the business of compiling or abstracting titles to real estate in any of the counties of the State of Oklahoma from and after the passage of the Oklahoma Abstractors Act, shall have for use in such business an independent set of abstract books or other system of indexes compiled from the instruments of record affecting real estate in the office of the county clerk, and not copied from the indexes in said office, showing in a sufficiently comprehensive form all instruments affecting the title to real property on file or of record in the office of the county clerk and court clerk of the county wherein such business is conducted.

I don't imagine that the abstract companies that have title plants are very keen on the idea of sharing them with their competition. After all, if having access to a title plant is required to become an abstractor, the best way to keep competition out is to prevent them from accessing your title plant.  So, what would you have to do to create your own title plant?

1 Okl. St. § 34.  Development of abstract plant--Permit

   Any person wishing to develop an abstract plant shall make application for a permit.


All permits shall expire annually. A permit holder who has not completed development of an abstract plant at the time the permit expires may apply for renewal of the permit. Applications for renewal must be made thirty (30) days prior to the scheduled expiration of the original permit and shall be accompanied by the renewal fee. 

So, why not just abstract from the county records at the local courthouse?  The local records are usually considered to be the "official records" from which most abstractors prefer to search.  However, besides the requirement in Oklahoma that licensed abstractors have access to a title plant for the counties they work in, there is another reason not to use the county's records.

1 Okl. St. § 36 (F).  Reliance on the county indexes in the preparation of an abstract of title shall not be a defense of liability for an error or omission in an abstract of title.

As the Oklahoma Land Title Association (OLTA) points out, "courthouse searches by non-abstractors do not provide the same protection from mistakes." 

The barriers to entering the abstracting market in Oklahoma seem nearly insurmountable for new company. In fact, the OLTA also claims that "the majority of their office have been in existence for over 100 years protecting the consumers of the state." 

One of the comments to the Tulsa World article claims that the Oklahoma system is somewhat of a "good 'ol boys" network, closed to competition.  There might be something to that claim.  It seems that the licensed abstractors definitely have a corner on the market.  Some of the counties appear to only have one licensed abstractor and the system seem to require a certified abstract for title insurance purposes.

Oklahoma Administrative Code provides:

365:20-3-2. Statutory requirements

   No title insurer shall issue, permit or cause to be issued, either directly or by an agent, a binder, commitment or policy of title insurance until either the title insurance company or its authorized agent shall have obtained an opinion of title by an attorney licensed to practice law in the State of Oklahoma based upon an examination of a duly certified abstract of title prepared by a bonded and licensed abstractor. For purposes of this section, a duly certified abstract means an abstract certified by a licensed and bonded abstractor with a Certificate date of not more than one-hundred eighty (180) days prior to the effective date of the title insurance policy. The above statutory requirements will not be satisfied by an examination or certification merely of copies of documents found in a search of the title record, or of the records of the Court Clerk or County Clerk.

Could the lack of competition and the necessity of the abstract have something to do with the fees?  One abstract company listed their fees for a new abstract of platted property as $750 and unplatted property as $850.  An extension of less than one year is $275 to $350, an an extension from one to five years is $450 to $550, and they continue to get more expensive from there.  An update after closing from less than 180 days from the previous certification date is $150.

The Tulsa World article also points out critics' claims that "having abstractors as part of the process is running up the cost of selling a house," and describes the process as "an archaic, cumbersome system that prolongs the amount of time to complete a transaction, sometimes causing a deal to fall through."  There may be a legitimate concern there as well.  The abstractor statutes require the abstract to be provided without unnecessary delay.  What constitutes unnecessary delay is also defined by statute.

1 Okl. Stat. § 32 Abstracts and other documents to be provided without delay--Valid order therefor--Failure to furnish--Penalties--Exclusions


B. Failure of an abstractor to furnish an abstract, abstract extension, supplemental abstract or final title report within the following time periods shall constitute unnecessary delay: 
   1. For furnishing new abstracts: 
       a. unplatted: twenty (20) business days, and 
       b. platted: fifteen (15) business days; and 
   2. For furnishing an abstract extension, supplemental abstract or final title report: 
       a. unplatted: seventeen (17) business days, and 
       b. platted: twelve (12) business days.

If you aren't abstracting in Oklahoma, could you imagine how that first phone call from a client may go?

CLIENT:  How much do you charge for a search and how long will it take?
ABSTRACTOR: That will be $750 and our turn-around time will be a couple of weeks.
CLIENT:  Wow... we can only pay $125 and we need it in two days or I will have to find someone else.
ABSTRACTOR: Well, you are welcome to shop around, but we are the only licensed abstractor in this county with a certificate of authority.  Are you issuing a policy?
CLIENT:  Yes, we are issuing a policy.
ABSTRACTOR: Then, that will be $750 and our turn-around time will be a couple of weeks.

In all fairness to the Oklahoma abstractors, it does appear that they are doing much more than we do in the vast majority of states.  They appear to be preparing "full and true abstracts of title" - something the rest of the world abandoned years ago.  Most of us do title searches, which are commonly referred to as abstracts - there are differences.  And, Oklahoma abstractors must not only have access to an independent title plant, the plant must be kept current within 15 days of the countys' records.

While I think that the Tulsa World article should have been written a little more clearly, it doesn't appear to as far off-base as I originally thought.  For that, I owe the author an apology for my rash comment on their site.  The use of the term "abstractor" apparently has a very different meaning in Oklahoma.  They would consider the rest of us to be non-abstractors.  When he questions the necessity of abstractors, I don't think he is advocating abandoning the searching of title, just the very burdensome system of the heavily regulated abstracting regime in Oklahoma.  What I believe the article suggests is opening the industry to searching titles, perhaps from the counties' records, like we do in the majority of the rest of the country.

One person commented about the distinctions, Bud Wyandotte, and his was absolutely correct.

I think there needs to be some clarification of terms here. Oklahoma and Iowa are known as "abstracting" states. The others are known as "title theory" states. Knowing the difference between the two, and the process for assuring clear title, may help one understand the issues raised in the article.

I am often amazed by the differences among the various states in their processes.  I should not have been so quick to judge the article... Oklahoma IS different! While I maintain that abstractors play an important role in the conveyancing of interests in real property in every state, some states define "abstractors" differently.  I consider myself to be an abstractor in Ohio... but I could not be an abstractor in Oklahoma.

Robert A. Franco


Categories: Abstractors, Land Title Associations, Oklahoma Legislation, Title Industry

2540 words | 14106 views | 15 comments | log in or register to post a comment

You were correct to slam the article IMHO

The article was horribly written by an incompetent reporter going through the motions, and the editors were either asleep or on summer vacation.  The reporter did not explain the pertinent issues which you have described above, nor really show any understanding thereof.  The reader is left clueless as to exactly why there is a problem particular to Oklahoma.  When I read the article earlier, I kind of guessed that the situation was something like this, but someone coming cold to the issue of title insurance has absolutely no chance to gain understanding of abstracting in Oklahoma from that article.

They need you to write a guest editorial... then maybe the good people of Tulsa would actually become informed on the issue!

by Slade Smith | 2008/06/25 | log in or register to post a reply

slam the article

I agree the article could have been more clearly written for those of us outside the state of Oklahoma.  Bear in mind though, the reporter was writing for the folks in Tulsa, not us.

If you go back in the recent archives of the Tulsa paper, you will see that this is one of a long series of articles relating to the political problems of the head of the State Abstractor's Board.  The differences had been explained better in some of the earlier articles.

It also seems that this issue has long been debated in the state, so again, a full recap of the facts would have been a waste of space in a local article.

by Douglas Gallant | 2008/06/25 | log in or register to post a reply

From an earlier Tulsa World article

I thought this was pertty interesting... the article really points out the corruption that can lead to monopolies in some counties.

Southern Abstract is the only abstract company in McCurtain County. When John Callaham, a Broken Bow banker, put in an application to start an abstract business, Arbaugh said he was instructed by McMahan to do everything he could to slow down the process so Phipps wouldn't have a competitor.


Phipps has testified that the abstract business is very lucrative. As co-owner of about seven abstract offices, Phipps said he earned $200,000 to $400,000 a month.

Contacted Friday, Ellis said that
about half the counties in the state operate with just one abstract company.

by Robert Franco | 2008/06/25 | log in or register to post a reply

For Once, I Agree With Slade

 This reminds me of that Forbes magazine article by Scott Wooley (Inside America's Richest Insurance Racket, November 13, 2006) in which the author slammed title insurance as "...an outdated product that should have been all but wiped out by digital technology."  Similarly, Mr. Hinton does not show even a basic understanding of how title insurance works.  The article did not sufficiently explain the differences between Oklahoma and the rest of the country.  Even if it is written for locals, it should have provided a little more background.

Oklahoma may be different, but having read the Oklahoma Abstractor's Law (after reading Douger's post in General Discussion) I'm still scratching my head.  If the statute doesn't permit copying from the county index, then how the heck am I supposed to develop an abstract plant, and what's the purpose of having the county maintain the records in the first place?  As you pointed out, Rob, it's unlikely that one would get help from a competitor.  Probably the only way to break into title abstracting in that state is to either buy (or inherit) an existing plant.

While I do think that Oklahoma's system is rather restrictive and cumbersome, the comment thread to the article shows the ignorance of the general public as to what a title searcher/examiner/abstractor does.  I don't think that expecting an article on the subject to be based upon knowledge rather than ignorance is asking too much.

by Scott Perry | 2008/06/25 | log in or register to post a reply

The article still has gapping holes in it- Even if OK is "different"

When first reading this article- it states that abstractors should be eliminated- because they take too long to do the job and cost too much for the service they perform. The cost factor was never substantiated- as" no figures were available(twice)" The time factor has now been a little more justified with  a reading of the OK law- but still- that does not mean we need to get "rid" of a system that , according to the last paragraph of the article, is a requirement to have.
I have one other observation about it- the suspect indicates that he had several (7)abstracting offices operating- each abstractor takes about 2 weeks to complete a case- and he indicates he is earning $200-400 thousand a month-( profit) each case averages $750-at the $200k level that is a break even number of 266 cases to complete-with each taking 2 weeks-that is 133 abstractors working on these-seems a bit out of line in todays depressed markets!!  Unless Ok is a boom state and we have all missed our flights out here!!
I still think the article was misleading- but then I don't live in OK , maybe that is the problem(sic).

by STEVE MEINECKE | 2008/06/26 | log in or register to post a reply

I think that is the point

Scott:  I think the main purpose of the law is to prevent YOU (or anyone else) from opening a competing abstract company.

If the statute doesn't permit copying from the county index, then how the heck am I supposed to develop an abstract plant, and what's the purpose of having the county maintain the records in the first place?

You would have "free access" to the records at the county when you apply for your permit to develop a title plant.  BUT... you can't copy the county's index, YOU have to re-index everything!  That is just too great of a hurdle for anyone except maybe the largest companies to do.  The system is very much a system of "protectionism."  From that stand point it is very much "anti-competitive."

Steve:  Again... I don't think the article suggests getting rid of abstractors as we all think of abstractors.  Under the Oklahoma statute, we would all be considered "non-abstractors."  My impression is that the article hints that their market should be open to "non-abstractors" who would be able to provide title searches from the county records.  Thus, increasing competition and allowing more than one company to provide title evidence in a county.  It does seem awfully hazardous to have so many counties with only one source of abstracts.

Your math on number of searches and man-hours that would be required to generate the extreme levels of income reported in that article may not take in to account all of the work they do that is NOT full abstracts.  For instance, they still charge a pretty penny for an update that is less than 1 year from the previous certification - $275+.  I could do a lot of title updates in a day, even if they are in "abstract" form.  And, if I had my own title plant, I'm not limited to an 8 hour workday.  I would be more than happy to put in 16+ hour days for that kind of coin!

by Robert Franco | 2008/06/26 | log in or register to post a reply

The math

I don't believe the article states that each search takes an abstractor two weeks to prepare.  It only states that the delivery time is two weeks.  If you are the only game in town, there is no need to be in a rush on each job.

Looking at the math that way, it is a lucrative business for the owner.  Using the 200,000 per month at $750 per transaction, with 7 counties, we are talking about 38 transactions per county per month.  At that volume of recording, the owner could probably get by quite nicely with about four employees per county.  Knowing they have a monopoly on the county, I would assume they employ a tract index system.  Just guessing, but I would think one person retrieving and indexing the recordings from the Recorder's office, one to do the same with the clerk and assessments, or whatever, one to copy and collate the information into an abstract (which the tract index has nearly completed), and one to oversee everyone and help count the money.  Outside of the 2 or 3 documents related to a closing that the monopoly is recording each day, there are probably only about  4 to 8 other filings per day in all the offices inclusive.  Figure an employee expense of about $35,000 each and the owner is taking in just north of $1,000,000 a year for his seven counties.  The office expenses would probably be low, as the Abstractor's Act requires the county to give space to the licensed abstractor for his staff and equipment.  Anyway, all just a bit of a guess, but it is the way I think I would set it up if I have a monopoly situation.

by Douglas Gallant | 2008/06/26 | log in or register to post a reply

I agree- The math is weak- and I might have missed the nature of the "abstractor"

I was just using the low end of the spectrum- and then the article states that the number of cases per month was 200-300-at $1000+ per case , that adds up pretty quickly.

I don't know about how things are going in other states, but in Virginia if it isn't a foreclosure- it isn't happening anymore- the banks and the FED have seen to it that no one is getting a loan from a bank- business is off considerably- as shown by the way the respective counties are having to back off of all their spending because of lost revenue- no recordings, no money coming in. How it is that Oklahoma has avoided this country wide dilemma?

And I can now see your point about "abstractors" maybe being the ones that are trying to break into that states abstracting business and not being the "approved" ones after all- with that kind of money- I am surprised more have not migrated to OK!!!

Steve Meinecke

by STEVE MEINECKE | 2008/06/26 | log in or register to post a reply

nature of abstrator


Read the Oklahoma Abstractor's Act.  You cannot just move in.  It is a closed shop.

by Douglas Gallant | 2008/06/26 | log in or register to post a reply

OK Abstractors

I was commenting on what Robert pointed out to me that the "abstractors" in this article are not the same kind as we in the rest of the country know them to be or have the duties as we do- I had missed that on my initial reads of the article. It seems as though they have  a great deal more to do when it comes to completing a title and they get paid a whole lot more for doing that also.I was joking when I made mention of moving to OK to break into the abstracting field there- it's not going to happen from me.

Steve Meinecke

by STEVE MEINECKE | 2008/06/26 | log in or register to post a reply

I Was Thinking As Much, Rob

It was really just a rhetorical question.

by Scott Perry | 2008/06/27 | log in or register to post a reply

ok... oklahoma is different

hello robert :) charlie here... gee.... i wish i could get 750.00 for a title and have 2 weeks to get it in. then i could get another part time job to fill in the other 13 days... what do you think?


by charles jetter | 2008/06/30 | log in or register to post a reply



by JON SARVER | 2008/06/30 | log in or register to post a reply

Yes, OK is different, but...

OK is different, but what abstractors actually do in OK vs other states is not all that different, and in most cases, it is actually easier that what abstractors do elsewhere.  It’s not that OK and IA are the only “abstractor” states; they are the only “Abstract” states (although I understand they are still used in a few areas in a few other states).  The real difference, aside from the barriers to setting up shop as an abstract company, is the product that is delivered to the attorney certifying title for the policy.  It is not a simplified one or two (or ten) page report providing the names, dates, amounts, etc., of the pertinent documents.  It is a full “abstract” or summary of each document in the chain - at least one page for each document, and is typically an inch or two thick.  An OK abstractor does not weed out documents that are no longer pertinent, such as satisfied mortgages or deeds of trust, or expired oil leases.  That is the attorney’s job when he or she examines the Abstract.  (Yep, policies are issued only on an attorney’s signature.)  Part of the time and cost problem is that you have to find the Abstract that has been compiled over the years.  The last abstract company that worked on it may have it, or the last title company, or the property owner, or an attorney.  Once it is located, you have to wait for the holder to retrieve it and deliver it to the abstract company updating the abstract, and for them to deliver it to the new title company.  No fax or e-mail delivery in OK; sometimes it seems like they use the Pony Express.


Oh, for Scott Perry’s question, the documents in the county records can be copied, just not the index.


What makes me such an expert?  Well, I’m not saying I’m an expert on this subject, but I am a PA attorney who went to law school in OK, and I have been in the multi-state title business since 1985.

by Doug Flavin | 2008/07/01 | log in or register to post a reply

Thanks, Doug.

That is a great explanation, Doug.  Thank you for the post.

by Robert Franco | 2008/07/02 | 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



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