Jennifer:

This is a very common problem and one that I tried to get my arms around when I was in the title industry. Instead of ordering and paying for a search, some mortgage officers would disguise it as a commitment order. I didn't realize this practice until I pulled my customers order/closing reports. I tried adding a legal statement to the bottom of my reports and attachment with each search but in  the end each were ignored.  Also, I  tried to send invoices but that created more negative reaction then good. In this market, we can’t afford to “piss off” customers”  thus I deployed a more subtle strategy. The below strategy created the most positive action for my company:

1.Understand my internal cost per transaction. What are my front and back end costs?

2. Establish a customer profitability report (by Client).

3. Religiously monitor the amount of closings, orders and revenue production of each customer.

4. Establish a minimum closing ratio for each customer.

5. Relay this report to sales reps weekly and monthly.

6. Put ownership on reps to professionally address customers who fall below their establish closing ratio.

7. Create rep commission incentives that reward higher closing ratios with increased commissions.

8. Establish an escalation point that would require me (owner) to personally visit client.

9. If all diplomatic efforts failed to improve closing ratio, remove client from future order servicing list until closing ratio improved.

Once I implemented this strategy, I found out how unprofitable some of my "presumed" best customer were. In actuality, some of them were costing me thousands of dollars. The positive impact of this strategy was an increase in closing ratio and profitability. Further, a unique training and consultative opportunity came out of this analysis that allowed me to conduct classes within the mortgage company that were designed to educate the LO's on how and when to order title work. This made me look like a Saint and eliminated 90% of the junk orders and searches from entering my doors. In 3 months, I went from a 60% closing ratio to 85% to 90% and increased my profit margins substantially! 

In the end, it starts with expertly managing, accessing and using your information to fight this problem. Your current closing and transaction management software should give you these numbers and/or allow you to create the reports. Overall this is just a broad view of the strategy I deployed to combat this practice. Email me if you have more detailed questions.

Good luck