Welcome to the ever-changing world of the title insurance industry

  Two old acquaintances who both became title plant managers are now employed by local firms to record documents at low wage and without benefits.
 

  While this might seem to be a case of how the mighty have fallen, it is a symptom of declining standards in education and service in corporate America.

  Each of these individuals, in their own right, were astute watchdogs of title standards. One, a fastidious examiner of all matters title never had enough time in the day to fully and properly examine all the files sitting on her desk. My other acquaintance was a devout keeper of records, rescuing title plant books from the shredder and storing them for over a decade in her own garage.

A View from a Post-Industrial Society in the Age of Information

  The nature of communication and data processing technologies has empowered the title industry, like many others, to outsource much of their work to other regions of the world. India and the Philippines are both destinations for American corporate data work.

  The integration of title plants from over 50 counties in California to one mega-complex for each title firm, has lowered expenses by eliminating the overhead of multiple leases as one financial effect. The other effect is to consolidate overlapping staff with less need for county-by-county management when a single individual can maintain oversight of multiple areas. The lower level staff is also given broader duties. Since there is no need to keep a staff of researchers for each county, a smaller, more generalized staff can easily handle research covering many small and a few highly urban counties. However, old-school professional researchers, or “searchers” as they are commonly called, were not needed by title companies because of two factors: (1) the decision to skip-chain searches on property and (2) temp companies who can send inexperienced secretaries at minimum wage to type numbers into a keypad.

  The skip chain research meant that the title company would no longer search the entire history of a property backwards in time to the original subdivison in order to properly ensure that no matters would adversely affect title. Instead, they would review the history back to when any title company (theirs or another) last insured a transaction and call thing even at that point. In the case of a claim, instead of having conducted a diligent, comprehensive search to protect their corporate interests against a claim, they would simply pay out the insurance claim. This becomes a cost-of-doing-business expense, and hence a write-off for the corporation at the expense of the tax payer. The client is not protected up front, but rather protected in the back side by a willingness to simply have the title insurance pay out like any casualty insurance; a flood hits and the flood insurance pays off, a car hits yours and auto insurance pays claims, and someone makes a claim against title so the title company pays out.

  The second item above, temp workers, means that professionals are no longer employed at high wages with full benefits when untrained, minimum wage workers can punch numbers into a machine that spits out results that are taken as gospel. No more consideration of the data is required. No more analysis of the information needs to occur. No follow-up or review of the results is necessary. Int the modern era, the information is passed automatically to a computer-generated report, which, if wrong, will be a potential claim that will simply be paid out in the future.

  The shareholder profits decline in this model even with this cost-cutting, because claims increase and title insurance claims involve things of great value: homes. Clients are not served because they've paid for a product that should be and has traditionally been well-researched in order to prevent claims, not encourage them as a tool of corporate welfare.

  However, while such changes as those above were being affected over the past decade, other market dynamics were altering even those circumstances. With the ability to outsource data to other, cheaper countries, the temp agency “research” staffers soon lost their jobs to people in India, who also could punch numbers into their keyboards which drew from the same databases.

  With nominal English speaking skills, moderate literacy, and a lower wage workforce, India became the new Mexico; third world and easy to exploit by large corporations. With added advantages devolving from international trade treaties, corporations went from outsourcing to off-shoring without breaking a sweat.

  In this sense, employees, shareholders, consumers and taxpayers are all put at a disadvantage. This begs the question of who benefits from such decisions. The answer is corporate management; not the low level sort of corporate managers who sit in an office to supervise staff, but rather the regional and headquarters administrators and executives who report to the stockholders annually at a meeting held in distant climes, but otherwise have a free hand to write off expenses, spend on corporate credit, reap all the benefits of corporate travel, receive grand bonuses, grant themselves raises and take golden parachutes upon departure.

  What does this have to do with two hard working women whom I've known for decades? They are out of jobs in hard economic times for the nation and their jobs will not return even if the economy turns on a dime and starts booming. They are learning how to operate computers with wifi and usb ports and instant messaging and more. They are at the mercy of small recording firms willing to hire them for their experience at a minimum wage and without benefits. They are both hoping for a title insurance industry revival that is not coming.

  Like most Americans, instead of stepping out and filing a fictitious business “dba” and offering their vast years of knowledge and experience, instead of getting their notary certification and a set of business cards, instead of writing some contracts and pounding the pavement in competition for new clients, they waited for someone to find them and offer them a job. They were not willing to put themselves out to the world and change it to meet their needs. They are blown by the whims of fate, and are part of the existing organization of my competition. I've worked for both of them, and I am now watching as my client base expands in a recession/depression, while they struggle to make ends meet. I would respect them more if they competed with me by entering the market. This would make me consider them as competitors, but also as possible allies. Right now, however, they are just low level employees that are playing catch-up. They neither threaten my firm nor offer it opportunity. They are marginalized and ineffectual, and that is a sad statement about America.