Bossman's Blog

Mineral Rights Lawsuit Spotlights Property Rights "Balancing Act"

Scott Perry (Jireh Business Information Solutions, Inc.) — Fri, 10 Oct 2008 12:09:02 -0500

A recent local news item provides the perfect illustration of why the proper evidencing and reporting of title to real estate interests is so important to our fundamental rights as well as to our regional and national economies.

A local businessman is filing suit against Allegheny County, PA, claiming that the county is denying him the right to remove about 700,000 tons of coal that he owns. 74-year-old Nello Fiore, of Whitehall, PA says that if the county won't let him mine the coal, then they should pay him for the value of the coal, which lies beneath 92 wooded acres in the Sleepy Hollow section of the county's South Park, located just south of Pittsburgh. The high-quality coal, which sells for about $143 per ton locally, could be worth well over of $100 million, according to Attorney Thomas W. King, who represents Mr. Fiore.

Southwestern Pennsylvania, which lies in the heart of the Appalachian Basin, has often been referred to the "Saudi Arabia of Coal". In fact, coal mining has been a mainstay of our region's economy since the dawn of the Industrial Age. Because of this, Pennsylvania real estate law recognizes surface and subsurface interests separately. Typically, when someone purchases a parcel of real estate in Pennsylvania, only the surface interest is conveyed unless the mineral or subsurface interest is specifically mentioned in the deed. (See my previous blog entry, Searching Mineral Interests: Don't Try This at Home.)

The county, to which the surface interest in the land was donated in the 1930s, considered a proposal to strip mine the coal at a community meeting this past June, which was attended by about 300 people, including Allegheny County Executive Dan Onorato. Mr. Onorato nixed the plan after it was discovered that a 2001 County Parks Master Plan designates the area as "an important biological zone" which has also been recommended for designation as an Open Space Reserve.

Mr. Fiore's lawsuit alleges that the county is acting unlawfully in preventing him from removing the coal, which he inherited from his brother, who purchased it from Consolidation Coal Co., the predecessor to Consol Energy. According to Attorney King, the deed gives Mr. Fiore the right to mine the coal at any time, regardless of who owns the surface interest. "If the county will continue to tell us we can't mine the coal, Mr. Fiore, under the Pennsylvania Constitution has a right to be paid for it." Mr. Fiore and his attorney claim that to deny his mining rights amounts to the county exercising eminent domain over his coal, thus he is entitled to reimbursement.

The county says that it's not preventing Mr. Fiore from mining his coal because he can still retrieve it by underground mining. "He has access to his coal," says Kevin Evanto, a spokesman for the County Executive's office, "[the county] is just saying that we're not willing to allow you to destroy 91 acres of park land to get at it." However, the lawsuit states that "the coal cannot be recovered by the deep-mining process." Attorney King says that Mr. Fiore has offered to include a post-mining reclamation plan for soccer and football practice fields and picnic facilities, as well as royalties to the county in excess of $1 million.

Several members of the County Council are on record as saying that they wouldn't support the proposal, which would be subject to review by the state Department of Environmental Protection. Local residents like Mary Franko have also expressed concern about what strip mining operations will do to their property values. Some nearby homes are located as little as 1,000 feet away from the proposed mining area. In an interview with a local television station, Ms. Franko said, "It's dangerous, dirty, and I don't know how they can possibly protect the perimeter when there's going to be blasting going on. I'm afraid that this is going to devastate our township. We're a small township. Our property values will absolutely diminish".

To be honest, I'm not really sure where I come down on this one. Mr. Fiore certainly does seem to be on firm legal ground here, (no pun intended) and if I was in his position, I'd probably move to assert my rights as well. On the other hand, if I was one of the residents of that area, I'm not sure I'd want someone coming in and "tearing up my back yard", regardless of any promises to improve the area afterward. One thing is for sure, the Court is going to have its work cut out for it in dealing with this issue. Let's just hope the abstractors who researched this thing knew what they were doing.

Honesty is the Best Policy

Scott Perry (Jireh Business Information Solutions, Inc.) — Thu, 05 Jun 2008 06:31:34 -0500

In the current market, we all do what we can to generate business for ourselves, and sometimes it's tempting to promise more than we can deliver. I believe that in the long run, however it can backfire when we are unable to deliver. A while back, I received a search request in an email from a client that went something like this:

Can we have both of these by Tuesday? Unless they are dirty searches, of course.

Attached were two 60-year title requests. Keep in mind, this request was sent after 5:00 PM on a Thursday afternoon, and I've just come in from being out in the field all day. Not wanting to make a promise I can't keep, I replied:

Hey, "Joe"! (not his real name)

Cutting it kind of close, but I'll do the best I can. I'll let you know if I run into any issues.

I figured this way, I had a little "wiggle room" in case one or both of these searches turns ugly. So, I get back to the office the following day to find this little missive in my "IN" box:

Scott,

Three full days should not be cutting it close. If you would like, I could find someone else to do my searches. I know that you don't go to Armstrong [county] everyday, but three days notice for a search should not be asking too much. Now I understand that some searches tend to be difficult and get more involved, but for the most part, three days should be more than ample time to complete a 60 year search.

Please let me know your thoughts on this, I have to have the information to my client within 4 days. Otherwise, the delay may cost me a client. This is not good for business, as you know. I hope that you can appreciate the situation that I am in, and try to work with me to achieve the goals of customer service that I have been requested to fulfill.

Thank you for your time,

"Joe Doe"

Well, I think to myself, this puts me in a fine mood on a Friday afternoon. After resisting the temptation to put a .45 round through my computer monitor and muttering a few choice references to "Joe's" questionable parentage under my breath, I replied thus:

Dear "Joe":

I must admit that I am taken somewhat aback by your response. Don't get me wrong, I very much appreciate your business. What I don't appreciate is your tone or your threats. However, I shall take the occasion of your email to clarify a few points:

1) "Three full days should not be cutting it close."

When you originally approached me to engage my services, I informed you that the normal turnaround time for a 60 Year Title History is THREE-TO-FIVE BUSINESS DAYS. There are several reasons for this. First and foremost, I have ALWAYS allowed ample time to complete ANY search, be it a Current Owner Search or a Sixty-Year Title History. At NO TIME will ANY deadline take precedence over a properly conducted and thorough search. I have worked too hard over the past six-and-a-half years at building my business' reputation and earning the trust of my clients to risk losing it all because of a shoddy search, hastily completed to accommodate one company's "rush" request.

2) "If you would like, I could find someone else to do my searches."

Do what you have to, "Joe", but don't think that threatening me is going to get me to move any faster. It is very unprofessional. My clients keep coming back to me because they know they can depend on me! I produce a good quality product--I don't HAVE to beg for work. I know of no other abstractor in southwest Pennsylvania who offers the level of Customer Service and support that I do. When you have a question about any of my work, all you have to do is pick up the phone and I am available. I am constantly hearing horror stories from my clients who have been "blown off" by title searchers who do this work "part-time" or as a "hobby". Let's also not forget, you looked me up, not the other way around. Someone else recommended me to you, so I must be doing something right.

3) "I know that you don't go to Armstrong everyday, but three days notice for a search should not be asking too much."

I'm a little confused here, "Joe". Has there ever been an issue with me getting your searches back to you in a timely manner? If so, this is the first I'm hearing of it. A review of your Account History shows that we have never taken more that four days to return one of your searches. Oh, and FYI, I am SINGLE-HANDEDLY covering 13, (count 'em, THIRTEEN) counties, sometimes working 12- and 14-hour days and an occasional weekend here and there, and am pretty darn proud of my track record of being able to turn my clients' work around in a timely manner.

4) "Now I understand that some searches tend to be difficult and get more involved, but for the most part, three days should be more than ample time to complete a 60 year search."

Speaking strictly from a title searcher's point of view, I do think that asking for TWO sixty year searches in three days' time is, in fact, "cutting it kind of close", particularly in light of the fact that I will not have three full days in which to complete these searches. If you wanted me to move your work to the front of the line, I do offer expedited service for a premium of $25.00 per search.

5) "Please let me know your thoughts on this, I have to have the information to my client within 4 days. Otherwise, the delay may cost me a client. This is not good for business, as you know. I hope that you can appreciate the situation that I am in, and try to work with me to achieve the goals of customer service that I have been requested to fulfill."

My twelve-plus years of experience in this business has taught me what can and cannot be done; it has also taught me that promising something to a customer that I don't think I can (or that I know full well I can't) deliver is not good for business, either. As I indicated, I'll do the best I can. Please let me know if that will be good enough. Please bear in mind when placing future orders that normal turnaround for 40- and 60-Year Title Histories "will be" THREE-TO-FIVE BUSINESS DAYS.

Thank you very much for the opportunity to clarify my position. If you wish to reach me for comment, my contact information is below.

Cordially,
Scott L. Perry, President
Jireh Business Information Solutions, Inc.
724.863.7270 FAX 734.863.7271
Mobile 724.640.0725
www.jbizinfo.com

I hear stories all the time from owners of firms who tell me that "so-and-so company promises they can turn a Current Owner around in 'x' time--can you match that?" Believe me, it's tempting to simply say "yes", but I truly don't think it's good practice to make promises without knowing whether or not I can deliver just to get business. I'd sooner be honest with myself and my clients and risk losing a deal than to compromise myself in that way.

I've got a mortgage to pay and a family to feed, in addition to the overhead I'm putting out just to keep the doors open. I'm taking work wherever I can find it, but I believe there is a God and that what goes around comes around. Jesus Christ said it best in Mark 8:36 "For what shall it profit a man, if he shall gain the whole world, and lose his own soul?" I just can't compromise my integrity for the sake of a buck.

Remember Our Nation's Unsung Heroes

Scott Perry (Jireh Business Information Solutions, Inc.) — Fri, 23 May 2008 07:06:13 -0500

Realizing that this is not exactly a real-estate related post, I feel compelled to remind everyone (myself included) that Memorial Day is about more than just the "unofficial start of summer" or having the day off for a backyard barbeque. As we pause to reflect upon the sacrifices of our military men and women, we also need to remember those "unsung heroes", the families and loved ones who have "kept the home fires burning" while our nation fought for its freedom.

Not everyone who has served our country has worn a military uniform. Countless others have answered the call to duty right here on the homefront, keeping our boys on the front lines supplied with the food, clothing, tools and equipment they needed to fight the good fight for our beloved America.

Such were the men and women who served with the Manhattan Project. Begun in mid-1942 under the leadership of Brigadier General Leslie R. Groves, the Manhattan Project was a top-secret joint military-civilian effort by the United States to develop an atomic weapon capable of bringing the war to a swift close. There were three sites which comprised the Manhattan Engineer District: Los Alamos, New Mexico; Hanford, Washington; and Oak Ridge, Tennessee.

My grandfather, Hallie Nolen Perry was a journeyman lineman for the Clinton Engineer Works at Oak Ridge, Tennessee and was involved in the construction phase of the three main plants which were built to refine raw uranium ore into the fissionable material neccessary to produce the Atomic Bomb. He worked for various civilian contractors during that time, after which he was employed as Chief Fire Alarm Technician for the entire Oak Ridge reservation.

Wartime security at Oak Ridge was so tight that even those working on the project had no idea what they were building until after the war. All personnel, including townsite residents, were required to wear color-coded ID badges. Each color code gave the bearer access to specified areas within the project. My grandfather wore what was commonly referred to as a "rainbow" badge, which granted him unquestioned authority to access any building or facility on the reservation.

The work being undertaken at Oak Ridge was cloaked in such secrecy that residents of the surrounding communities could only guess at what was taking place right in their own back yard. A common saying of the time was, "Tons and tons of stuff goes in, but nothing ever comes out!"

On 6 August 1945, the nation and the world discovered the true purpose of the Manhattan Project. Two atomic bombs were dropped, first on Hiroshima, then three days later, Nagasaki, forcing the unconditional surrender of the Japanese Empire on 15 August 1945.

This story is dedicated to the memory of my "Papaw" Perry and countless others like him who served in secrecy right here at home to assure our victory and to save the lives of untold thousands of American GI's. We must never forget the efforts and the service of these truly "unsung heroes" of our nation.

Respectfully submitted,
Scott L. Perry

Google Sued Over Privacy Issue

Scott Perry (Jireh Business Information Solutions, Inc.) — Wed, 23 Apr 2008 06:35:14 -0500

I've been meaning to give my review and commentary on an interesting piece from here in southwestern PA that came out a few weeks ago. Seems that a couple from Franklin Park, PA, (a suburb just north of Pittsburgh) has filed suit in Allegheny County Common Pleas Court against Google, Inc., alleging that pictures which appeared on the Street View feature of the Internet giant's mapping function violated their privacy, according to a story from the AP.

Google obtains its "Street View" photos utilizing still cameras mounted on passenger vehicles which drive around taking pictures from different angles, which are then digitally "sewn" together to create panoramic 360-degree views of cities, towns and neighborhoods. In their six-page complaint, plaintiffs Aaron and Christine Boring (swear I didn't make that up) allege that Google's "reckless conduct has exposed [the Borings'] private information to the public at large with the commensurate risks this entails". The complaint further states that Google's vehicle trespassed onto their property when it drove down a private right-of-way to snap pics of their house that included their swimming pool. The couple's attorney, Dennis Moskal says the Google vehicle came close enough to the pool "to hand them a drink."

Kevin Bankston, a senior staff attorney with the Electronic Frontier Foundation who specializes in First Amendment and privacy law says that the case may have some merit, citing Daily Times-Democrat v. Graham, 162 So. 2d 474 (1964), an Alabama case in which a newspaper photographer had snapped a picture of a woman whose skirt had been blown over her head, á la Marilyn Monroe, in a carnival funhouse. Although the newspaper argued that it was justified in printing the photo because it was taken in a public place, the court ruled that the photo violated the woman's right to privacy. (In an interesting side note, Bankston has himself been captured by Google's cameras on more than one occasion and once was even observed smoking a cigarette outside his San Francisco office. He'd told his family he had kicked the habit.)

Perhaps the greatest irony here is that the Borings, in an attempt to enforce their right to privacy, may have unwittingly put themselves under the microscope, since much of the info about their home is readily available to anyone who logs onto the county's online Real Estate Assessment website. Not only that, but their home address is prominently displayed in the complaint, which can be obtained (for a fee) from the county's Department of Court Records website.

Google spokesman Larry Yu says that all the Borings had to do was to ask that the images be taken down. "We actually make it pretty easy for people to submit a request to us to remove the imagery." Not good enough, says Attorney Moskal, stating that simply removing the pics won't undo the damage or discourage Google from engaging in similar future conduct. "Isn't litigation the only way to change a big business' conduct with the public?" he asks, "What happened to their accountability?"

That's funny, I've been wondering the same thing about Big Title. A favorable ruling for the Borings may not set a precedent, but whatever the outcome, it's sure to have lasting implications in the debate over information vs. privacy.

Southwestern PA: Glass Half-Full or Half-Empty?

Scott Perry (Jireh Business Information Solutions, Inc.) — Sun, 06 Apr 2008 19:27:14 -0500

While perusing some of the local online publications, I ran across this article by Ron DaParma, Real Estate Reporter for the Pittsburgh Tribune-Review:

Pittsburgh region sidesteps much of subprime storm

The Pittsburgh region isn't at the top of the list of U.S. cities stung by mortgage foreclosures and problems with subprime loans, experts say.

Residential foreclosures here actually declined slightly in 2007 versus 2006, according to a recent report.

Mr. DaParma's article goes on to spotlight a couple of anecdotal instances of how folks are dealing with their own foreclosure worries, but there's also this article by Ben Semmes in The Pittsburgh Business Times:

Foreclosure flood in Pittsburgh region

A flood of foreclosures swamped the Pittsburgh region in February, which saw the most foreclosed homes in more than two decades.

Four hundred owners lost their homes in February in the five-county Pittsburgh region, 64 more than February of last year, according to RealSTATs, a South Side-based real estate information company.

In the 22 years since RealSTATs began keeping records, no one month has recorded more foreclosures than February's total.

These articles were written about 3 weeks apart from one another. Can they both be true? I suppose, but from where I sit, it's all a matter of perspective. Personally, I've always been a glass-half-full kind of guy, although I can see where it's easy to get discouraged when faced with the prospect of losing one's home. This isn't the first time this region has faced an economic downturn, however; we were hit hard by the decline of the steel industry in the late 70s and managed to come back from that. That's why I prefer to remain optimistic. The people of southwestern PA are a resilient lot. We never give up and always find a way to win.

That's Just SHOCKING!

Scott Perry (Jireh Business Information Solutions, Inc.) — Mon, 31 Mar 2008 12:30:20 -0500

The recent news that the passport files of the three presidential candidates, Senators Hillary Rodham Clinton, Barack Obama and John McCain have been accessed by contract employees of the State Department has brought the issue of information security and personal privacy to the public's attention. According to an AP report, passport files containing personal information about several "high-profile Americans", including the late Anna Nicole Smith, have been accessed on at least 20 separate occasions. Although the review of Ms. Smith's file appears to have come from a "legitimate" source, the report states,

"Supervisors recorded each instance a file was viewed because the applications in question belonged to members of a select group of several hundred citizens whose passport files were "flagged" for extra protection due to their visibility, the officials said. Among these people are government leaders, movie stars and athletes, the officials said.

The list maintained by Bureau of Consular Affairs has included as many as 500 people at any one time, they said. The list is kept secret partly to deter workers from making unauthorized inquiries into high-profile records. Although there are no formal criteria for inclusion, people on the list are deemed to warrant special consideration because of their public status, the officials said."

Don't you wish you warranted such "special consideration"? I guess if Joe Ordinary Citizen (read: all you peons out there) has all the details of his private life trotted out online on public record websites for the whole world to see by Big Title, the information industry and their willing accomplices within his local county government, it's no big deal; but when the passport records of three "high-profile Americans" (read: the ruling classes) are breached...oh, my word, that's just SHOCKING!

A Common Misconception?

Scott Perry (Jireh Business Information Solutions, Inc.) — Wed, 19 Mar 2008 10:33:50 -0500

"It is a common misconception that easy access to public records has facilitated other types of fraud, identity theft, or land fraud."

That's the assertion set forth in a white paper authored by members of the Property Records Industry Association entitled, "Privacy and Public Land Records: Making Practical Policy". PRIA, a self-described membership-driven organization composed of business and government members of the property records industry, released the white paper in January 2006, which goes on to say that,

"[w]hile posting documents that contain certain key information on the Internet, such as credit card numbers, social security numbers, and signatures, can provide a criminal with some of the information needed to commit identity fraud or theft, there is no evidence to support any claim that this is systematically being done to perpetuate identity theft crimes. There are many easier, and far more efficient, ways for identity thieves to obtain this information in today's world, as opposed to combing through public records and hoping to find something - a ‘needle in the haystack' approach."

I have to wonder just how much research PRIA did before reaching that conclusion, because it didn't take very much effort for me, a dumb ol' abstractor, to find numerous such instances doing a simple Google search. The rampant deed fraud in Florida and Texas that I blogged about recently must have escaped PRIA's notice. I wonder if they knew of the incident in December 2005 in Scottsdale, Arizona, in which a 23-year-old methamphetamine user showed police the method he used to steal identities. He logged onto a local county website and pulled up a divorce document which listed not only names, but addresses of the parties, bank account numbers and even scans of signatures. According to one report, the website contained thousands of such documents.

The Federal Trade Commission lists the top five states for identity theft as Arizona, Nevada, California, Texas and Colorado. The numbers from Arizona are double the national average, due in large measure to the decision of county officials to post public records on the Internet, according to a 2006 study by Javelin Strategy and Research, which states that one in six adults in that state has had their identity stolen within the past five years.

PRIA's white paper also argues that free access to sensitive information contained in public records is "actually a very effective weapon in combating identity fraud and theft", although it cites no direct evidence to support that claim.

"Commercial databases compiled using public records for identity authentication are routinely used to detect fraud, including credit card application fraud, insurance application fraud, and other types of fraud. Thus, efforts to restrict the collection and use of personal information contained in public records, though well intended, actually may hinder efforts to prevent identity theft by depriving businesses, government and law enforcement officials of valuable data that is used to authenticate identities and protect the public."

That's small consolation, I'm sure, to the family of Amy Lynn Boyer, a New Hampshire college senior who was stalked and murdered in 1999 by an obsessed former classmate who purchased her Social Security Number and other personal information from an online data broker. Or the 145,000 Americans whose personal information was stolen from data giant ChoicePoint by criminals who set up fake company accounts and downloaded sensitive information compiled from public and private records.

So, as the Internet increasingly becomes a haven for fraudsters, cyberstalkers and identity thieves, organizations like PRIA continue to assure us that that's "just a common misconception" and that free access to online public records actually helps to fight cybercrimes.

Gee, I feel safer already.

Top Ten Reasons to Choose Jireh Business Information Solutions, Inc. for Your Search & Abstract Needs In Southwestern PA

Scott Perry (Jireh Business Information Solutions, Inc.) — Mon, 03 Mar 2008 10:01:37 -0600

As a result of the efforts of ActiveRain All-Stars like Ed Rybczynski, Fran "the Title Man" Gaspari and Lenn Harley, AR members and visitors are being made aware of the risks that real estate buyers are being exposed to by Big Title's ever-increasing reliance on offshore "thin" title plants and online public records. I defer to Lenn's wealth of expertise in the real estate industry, whose statement in an earlier blog post summed things up better than I ever could have: "The title search is one of the most important transactions involved in buying a home. It's isn't the place to begin an economy drive."

I always say that a title policy is only as good as the search that was relied upon to issue it, and by extension, the search is only as good as the abstractor who prepared it. In today's business climate, with real estate fraud and forclosures at all-time highs, it's important to know who you're working with. Real estate agents and brokers need to start asking the right questions of the lenders and title agents with whom they do business. Do their abstract vendors/providers use "hands-on" abstractors with "boots on the ground" and an intimate knowledge the intricacies of local indexing systems (which vary greatly, even from county to county)? Do they have a point-of-contact to verify questionable items when necessary?? Is the title agent issuing policies on "short searches" or do they insist on having a full 40- or 60-year title search which has been reviewed by a qualified title examiner or attorney? Are they putting your consumer at undue risk just to save a couple hundred bucks?

Founded in 2001, our company has established itself as southwestern Pennsylvania's premier provider of title abstracting, court-related services and paralegal support to the legal, financial, real estate and insurance industries. As a fan of David Letterman, I've compiled a "Top Ten" list of reasons to choose us for your search and abstract needs in southwestern Pennsylvania:

10) Direct coverage of thirteen southwestern Pennsylvania counties, more than any regional competitor;

9) Offering all types of search services, from Document Recovery to Current Owner Reports to Full Title Histories;

8) All work performed "hands-on" by a local abstractor within the four walls of the courthouse--no online searches or offshore processing;

7) Over ten years of search and abstract experience;

6) Typewritten search reports delivered in a concise, easy-to-read format;

5) All Real-T-SMART^TM Search Products backed by a $1M Errors & Omissions policy;

4) Computerized monthly invoicing streamlines recordkeeping and reduces paperwork;

3) Competitive all-inclusive pricing and generous volume discounts add up to exceptional value;

2) Flexible Billing Date option enables customers to better plan their monthly cash flow;

AND THE #1 REASON TO CHOOSE JIREH BUSINESS INFORMATION SOLUTIONS FOR YOUR SEARCH & ABSTRACT NEEDS IN SOUTHWESTERN PENNSYLVANIA:

Abstracting Is No Hobby -- It's Our Business!!

www.jbizinfo.com

SPECIAL OFFER FOR AR MEMBERS: MENTION THAT YOU FOUND US ON ACTIVERAIN AND RECEIVE 15% OFF YOUR FIRST ORDER OF $150.00 OR MORE!

Practical Obscurity and Public Records

Scott Perry (Jireh Business Information Solutions, Inc.) — Sun, 02 Mar 2008 00:12:46 -0600

It used to be that if you wanted to obtain a copy of the deed to your house, you had to make a trip to your local courthouse, enlist the aid of a clerk in the Recorder of Deeds' office to assist you in searching through those old, dusty canvas books, find your name in the index, have them pull the correct book or microfilm, then wait while they made your copy for you. It was an inconvenient and often time-consuming process. However, the advent of the Internet and the availability of public records for worldwide consumption have changed all that.

Fast-forward to today, where, with just a few mouse clicks, not only can you quickly and easily download and print your own deed from your county's website, but while you're there, you can find out how much your neighbor paid for his home, who holds his mortgage and the size and dimensions of his lot. You can also find out how much he pays in property taxes and in some cases, you can even get pictures of his house...and that's just the tip of the iceberg. I haven't even mentioned the civil and family court records--which may contain volumes of sensitive and personal information about him or his family.

A February 2006 investigative report by David Bloys, publisher of the online newsletter News For Public Officials, details how fraudsters were able to fake a signature and a notary seal to produce a bogus deed transferring ownership of a house from a Denton county couple to themselves. The theft had the earmarks of a rash of deed fraud in Florida in which the signatures and notary seals of deeds to properties belonging to absentee owners were copied from public record websites. Commenting on the need for legislation to combat the fraud, Florida state Senator Dave Aronberg stated, "it's one thing if these guys are committing crimes; It's another thing if the state is facilitating it. The state shouldn't be making it easy for this kind of thing to go on."

In February 2007, MSNBC Senior Investigative Correspondent Lisa Myers broke the story of an Ohio woman whose identity was stolen by a ring of thieves who obtained her sensitive personal information from a county court database. Details such as her name, date of birth, address and social security number were there for the taking-everything the thieves needed to open accounts and make hundreds of thousands of dollars worth of purchases and charges using her identity. MSNBC later reported that New York State had removed documents from its Department of State website that showed the personal information of such celebrities as Donald Trump and Joe Namath, as well as many private citizens, in reponse to Myers' report.

Since the founding of our nation, citizen access to government records has been an integral part of promoting transparency and accountability in government. As those records have become available through electronic means, civil libertarians have made the argument that since land records and records of court proceedings are considered "public", they should be accessible by the most modern methods available. So the paramount question is: do I, a private citizen sitting here in my pajamas in front of my computer in North Huntingdon, Pennsylvania (or anyone else, for that matter) have any business knowing what someone in, say Fort Worth, Texas for example, paid for their house? Internet librarian Dan Giancaterino doesn't think so.

Speaking as a guest on the Michael Smerconish radio show in October 2005, Mr. Giancaterino said, "I think that having that practical barrier of having to show up [at the courthouse] and go through the process of...requesting documents tends to weed out a certain percentage of crazies". He then went on to cite an example of information in a child custody case that he was able to pull from the website of a county near Philadelphia. He had the child's name and birth date; the mother's address; the fact that the father had been incarcerated and was being evaluated for a mental disorder; that the mother was pregnant with another man's child; the city and state to which the mother and child were moving; and even the name of the elementary school that the child would be attending.

A few years back, I attended a seminar at a technology forum sponsored by the Pennsylvania Land Title Institute (PLTI) which dealt with this very issue. I remember one of the speakers, a real estate attorney, informing us that while the individual pieces of information by themselves are "public" in nature, they become "private" once assembled into a narrative report or an abstract of information relating to a specific person or parcel of real estate. This is what is known as the doctrine of practical obscurity.

This little-known legal theory basically states that although a piece of information may be publicly accessible, the fact that no one with more than a casual interest would go to the trouble of looking it up makes it, for all practical purposes, obscure. The doctrine of practical obscurity was first advanced in a landmark case entitled US Department of Justice, et al. v. Reporters Committee, et al., 489 US 749 (1989) in which a reporter made a request under the federal Freedom of Information Act (FOIA) for access to the FBI "rap sheets" of criminals. The Supreme Court held that although an individual's arrest records are available for public inspection in the respective courthouses, the doctrine of practical obscurity would make the compilation of such records an invasion of an individual's right to privacy. "[T]he common law and the literal understandings of privacy encompass the individual's control of information concerning his or her person."

Some states have already passed legislation addressing privacy issues with regard to public record data. The state of Florida, for example, has had an electronic redaction program in effect since 2006. Many local jurisdictions are taking similar measures. The County Council in Allegheny county, PA voted in November 2007 to eliminate the name search function from the county's online real estate assessment website. The names of roughly 100 judges were removed from that county's website in June 2005 after the murder of the mother and the husband of a federal judge in Illinois and the killing of a county judge in Atlanta, GA.

I'm usually the last guy to recommend government solutions to problems, but taxpaying citizens of local governments have the right to expect that their elected officials will take positive action in protecting their privacy as the barriers of the practical obscurity of our public records become increasingly eroded by advancing technology.

Global Warming, My Carbon Footprint!

Scott Perry (Jireh Business Information Solutions, Inc.) — Wed, 27 Feb 2008 21:16:03 -0600

OK, so this isn't exactly real estate or title-related. Humor me. Today, I was reading this blog on the science website dailytech.com that confirmed what I've suspected all along: that solar activity has more to do with global climate change than human activity. It just doesn't make sense--on one hand, we're told, in the grand scheme of things, that man is insignificant, nothing but the tiniest piece of flotsam on the ocean of the cosmos. Yet, at the same time, human arrogance allows us to think that we are powerful enough to wreck the earth's climate. We've been hearing for years that we're spewing so much CO2 into the atmosphere that we're going to cook ourselves to death because of global warming. Now, comes the news that there's more evidence of global cooling than global warming.

I believe that the underlying purpose of the global warming hysteria is to restrain economic freedom by limiting activities that produce carbon emissions, which encompasses just about everything we humans do as we go about our daily lives. Carbon dioxide is not a pollutant; the earth actually gets greener in the presence of increased CO2, and in fact, we have more trees now than we did when the country was founded over 200 years ago.

I'm not saying that we shouldn't practice good stewardship, but I certainly don't believe that fossil fuels are destroying the world. I, for one, am proud to live in one of the only industrialized nations on earth that generates enough wealth to clean up after itself.

Some Folks Just Don't Get It

Scott Perry (Jireh Business Information Solutions, Inc.) — Mon, 25 Feb 2008 00:52:59 -0600

Ed Rybcyznski posted an entry on his Title-Opoly blog about a piece in phillyburbs.com by Jenna Portnoy in which she interviews Fran Gaspari of Patriot Land Transfer and brings attention to the practice of online title searching. While Ms. Portnoy does an admirable job of reporting on the outsourcing angle, I thought the aspect of security could have been explored a little further.

I had to chuckle when I read the statements of Ed Gudknecht, Bucks County Recorder of Deeds about the county's rationale for publishing the records online. "We wanted to provide this information to the public, save them a trip to the courthouse, we have to keep up with the technology." As I commented to Ed Ryb on his blog, I think the fact that Landex, the company which engineered the system used by the Bucks county Recorder's Office, is generating $1,500 to $2,000 per month for Bucks county is more of a factor than the stated objective of providing convenience to the citizen. Even more amusing was this comment following the phillyburbs article:

"...As far as the records being on line, they have been on line for years, this is just a different format. Whats the difference, you can go to the court house and make copies of any record you want or you get the copies on line. They are PUBLIC RECORDS, we the people, have a right to see them. Bucks County is not the first or only county to have public records on line, most counties and states have some type of system online and they have had them for years. Where have you been??"

The very real danger that online public records pose to the private citizen in my opinion far outweighs any perceived public benefit. How many of our fellow citizens must be victimized before people finally "get it"?

UPDATE: After receiving a comment from a puzzled ActiveRain reader, it occurred to me that I should clarify exactly what I meant by "danger to the private citizen". I will be posting another entry detailing how criminals obtain sensitive personal information on their victims from public records websites. Stay tuned.

Searching Mineral Interests: Don’t Try This at Home

Scott Perry (Jireh Business Information Solutions, Inc.) — Thu, 21 Feb 2008 05:58:46 -0600

I recently received my annual renewal notice for the mine subsidence insurance policy I purchased when I built my home. Chances are, I'll never need it, but I sure do sleep better at night knowing that it's there if I ever do. For the uninitiated, the Mine Subsidence Insurance program is administered by the Commonwealth of Pennsylvania and provides a homeowner with protection in the event of damage to a home from subsidence due to underground mining operations, something which isn't normally covered by traditional homeowner's insurance. If you own a home in this part of the country, it's probably a good idea to have it.

That's because southwestern Pennsylvania has a long history as a coal-producing region. Real estate law in the Commonwealth is peculiar to that of most other states in that it recognizes three separate and distinct interests in land, 1) the surface interest, 2) the mineral interest, and 3) the support interest. Mineral interests can be separated, or "severed" by one of two methods, either by a separate deed of conveyance or by specific exception or reservation contained in a conveyance of the surface interest.

If the surface owner holds title to the support interest, then the mineral owner must leave enough of the substrata, i.e., coal, etc. to support the surface interest. However, if the mineral owner also holds the support interest, the surface owner may or may not have any legal right to have his buildings supported by anything. Most traditional title policies don't include coverage of mineral interests, although some owner's policies may include an endorsement which covers damage to existing improvements in the event of damage by someone exercising their right of surface entry to extract minerals or water.

"We always advise buyers who are interested in mineral rights to order a special mineral rights search," says Diane Cipa, General Manager of The Closing Specialists®, a title agency located in Ligonier, PA. She also recommends that consumers interested in mineral rights consult an experienced attorney who specializes in mineral rights law.

That got me to thinking about all those new faces I've been seeing in some of the county offices lately. With oil trading at $100 per barrel and up, demand for coal is at its highest level in 25 years. There's also been a lot of interest in coal bed methane, a gas contained in coal formations. However, the newest "gold rush" is the natural gas contained in the Marcellus Shale, a rock formation covering a 54,000 square mile area stretching from most of West Virginia through parts of Pennsylvania and Ohio into upstate New York. Estimates are that as much as 50 trillion square feet of the stuff could be contained in the shale, which lies more than a mile underground. One of the major players, Range Resources of Fort Worth, Texas already has plans to drill at least 4,700 such wells in southwestern Pennsylvania at a cost of $3 million each, not counting leasing costs.

I've had the chance to talk with several of the "old hands" who specialize in mineral searches in these parts, whom I won't name due to concerns of client confidentiality. They tell me that one of their biggest concerns is that some energy companies exploring the region are putting inexperienced people in the courthouses. "It's booming right now," says one fellow with over 25 years of experience, "but I know that after it's over, I'm going to have at least another three to four years worth of work just cleaning up all the legal issues left by these guys." He also tells me that some of the searchers, who have only a few months on the job themselves, are already training new hires. Another guy I spoke with says that he sees a continuing need for experienced mineral searchers. "I just don't see how you could do this job from a computer terminal," he says, commenting on the fact that the Recorder of Deeds in his county recently went online with images of deeds and mortgages, "you need to be able to get back to 150 years in some cases to pull some of those old condemnations."

Even with my years of residential abstracting experience, I would never attempt to search mineral interests without proper training. It is an extremely complex area of real estate law which requires a specialized set of skills and many years of experience and is definitely not something that we should be trusting to rank amateurs.

I'm an American Citizen, Too

Scott Perry (Jireh Business Information Solutions, Inc.) — Wed, 13 Feb 2008 12:11:33 -0600

Clare Booth Luce was right. No good deed goes unpunished. When I began blogging about the pitfalls of the dissemination of public records online, I knew it would only be a matter of time before some civil libertarian would step forward to accuse me of wanting to infringe on "the citizen's right to know" in order to protect my own job. Turns out I didn't have too long to wait.

Certain individuals have chosen to make me the issue, taking me to task for perceived dishonest motives, paranoia and elitism, among other things, rather than try to win the debate on its merits. This is the faction of civil libertarians who believe that not having public records available for worldwide consumption somehow constitutes a limitation upon the "public's right to know." I reject that notion entirely. Land records have always been (and continue to be) available for inspection and copying to anyone who physically visits the courthouse during regular business hours. Why should local taxpayers subsidize the publication of their own information to a worldwide audience over an unregulated medium like the Internet?

The real issues here are quality and security. First of all, an abstract report is only as good as the information used to compile it. That is why my company never relies on online information to produce our searches. Back in 2006, Ed Rybczynski wrote a very informative white paper, "Words of Advice for Anyone Who Cares to Listen," in which he highlights the unreliability of the information on the State of Maryland's public record website, MdLandRec. Computerized records are only as accurate as the information entered. As the saying goes, "garbage in, garbage out." A single typographical or indexing error can mean misplacing a crucial document. I see it all the time in the course of my work. Local abstractors, intimately familiar with custom and practice in the jurisdictions they serve, have the unique knowledge and skills required to ferret out these sometimes elusive items.

Secondly, how does an "abstractor" (and I use that term VERY loosely) over in "Crapistan" know which instrument relates to a given parcel or individual and which one doesn't? Even though it is possible to create and store a digitized image in a database of every single instrument ever recorded in a given jurisdiction, indexing and cross-referencing every single one of those instruments would be a monumental task at best. There's no way that someone sitting at a computer screen thousands of miles away (who has never set foot in a US courthouse) can possibly understand how these documents relate to one another.

It amazes me when I talk to other abstractors out here in the field, who seem willfully ignorant of the dangers of placing records online, at the expense of not only their own livelihoods and the integrity of the records, but of the security of the citizens served by the counties. I actually had one abstractor tell me the she would rather have the convenience of being able to do a search from her home computer than have to travel to the courthouse! Criminals are always looking for easier ways to access personal information and public record websites are a prime target. With identity theft and real estate fraud at an all-time high, local citizens in their respective communities have the right to expect that their elected officials are taking reasonable steps to ensure the safety, security and integrity of the records relating to their most precious assets--their homes.

Upon reflection, I suppose that in a way, my position on this issue is motivated by self-interest-and there's not a thing wrong with that in my view. After investing the better part of twelve years of my life in perfecting my craft, building a business, establishing a solid reputation for quality and integrity, earning the good will of my customers and working my tail off to make sure they always receive the very best search product available, not to mention the money I've spent on office equipment, rent, fuel, parking, tolls, E & O insurance and continuing education, I don't want a 30-cent-per-week worker in some third-world sweatshop coming along putting out a crappy product that they claim is not only faster and cheaper, but better than mine. I also don't want some thief being able to access (from the comfort of his prison cell) all of the information he needs to steal from me or to harm me or my family.

So forgive me, Mr. Civil Libertarian, if I'm not sympathetic to your cause. No public records law, nor the Constitution of the United States guarantees anyone the right to not be inconvenienced. I'm an American citizen, too---and I have the right to stand up for myself, my family and my livelihood!

NALTEA Recognizes First Certified Abstractors

Scott Perry (Jireh Business Information Solutions, Inc.) — Mon, 11 Feb 2008 07:37:40 -0600

The National Association of Land Title Examiners and Abstractors (NALTEA) recently held its Annual Conference in New Orleans, LA, during which it administered its first Abstractor Certification Exam, according to a press release issued Friday by the organization. This initial exam, a test of general industry knowledge, provides for two levels of certification: the NALTEA Certified Abstractor (NCA) and the NALTEA Master Abstractor (NMA). Participants must score at least 75% to attain the NCA designation. Those who score 90% or greater earn NMA recognition.

In addition to the initial exam, continuing education will be required of NCAs, while NMAs will provide references and submit a commercial title search for verification of accuracy. Roughly 63% of those sitting for the exam scored high enough to earn a passing grade. Generally speaking, the more experienced abstractors scored higher. "This would suggest to me that we have a pretty good test, a good indicator of industry knowledge," says Patrick Scott, member of NALTEA's Board of Directors.

This positive development is in keeping with NALTEA's primary objective of "establishing and maintaining uniform standards and practices for the profession of land records abstracting by setting forth guidelines for training, experience and ethical conduct." NALTEA's Education Committee is now working to make the test available to its members at testing centers nationwide, and anticipates the development of state-specific exams which will supplement the general knowledge test. Congratulations to the first NALTEA members to be recognized under the new certification guidelines:

Tina Beltran, NCA - Oklahoma Abstract Company of Lawton, Inc.

Robert Gallant, NMA - Independent Title Services, Inc.

Lynn Hammett, NMA - Capitol Title and Research Services, Inc.

Jeanne Johnson, NMA - Jeanne Johnson & Associates

Jill Kissell, NMA - A-1 Abstract & Research, LLC

Timothy Lunn, NCA

Mary Mitchel, NMA - AccuSearch Company

Vikki Moffitt, NCA - Southern Abstract Services, LLC

Edward Rainen, NCA - Rainen Law Office PC

Quanah Rhodes, NCA - Infotrack Information Services, Inc.

Patricia Roberts, NCA - Mid-Mississippi Abstract Co., LLC

Dave Vogeler, NCA - Abstract Title Consultants

Carol Walker, NCA - Walker and Walker

NALTEA was founded in June 2004 by a core group of concerned and dedicated title examiners and abstractors who shared the vision of an organization which would focus on issues unique to an all-too-often overlooked segment of the real estate industry. Since its inception, NALTEA has made itself known as an able advocate of abstractors all across the nation and has stood staunchly against the online publication of land records. The organization most recently voiced its opposition to the position of the American Land Title Association (ALTA) regarding the issue.

Pat also tells me that NALTEA will be represented at the Mortgage Bankers' Association conference at the end of the month, where they will promote the value of local knowledge to mortgage lenders and brokers. Many thanks to Pat Scott and all of the dedicated people working tirelessly behind the scenes at NALTEA to improve the lot of abstractors and examiners all across the nation.

The Silver Lining

Scott Perry (Jireh Business Information Solutions, Inc.) — Sat, 09 Feb 2008 23:40:51 -0600

I've been writing a lot lately about how the big players in the title industry are capitalizing on the use of technology to the detriment of small agents and abstractors as well as consumers. There is, however, a flip side to the technology coin, the silver lining in a dark cloud, so to speak. With the advent of the Internet, a cadre of bright young entrepreneurial types all across the spectrum of the real estate industry are using the technology of the World Wide Web to their advantage and that's what I'm focusing on today.

My first exposure to any type of online community, at least as far as my profession is concerned, was with the website Source of Title. Launched in 2002, Source of Title is the brainchild of Robert A. Franco, president of VersaTitle Services, Ltd. of Mansfield, OH. Mr. Franco's goal with Source of Title was to assist the title industry with locating independent vendors around the country. SOT's vendor directory boasts over 5,400 listings and receives an average of over 12,000 hits per week. Unlike ActiveRain, which is primarily a blogging medium, SOT's online community is more forum-driven. "The purpose is similar," says Mr. Franco, "to help title professionals network and share their thoughts and concerns on their industry." The ‘site has been nothing short of an absolute smashing success. For the first time ever, title examiners and abstractors all across the country were able to compare notes about such things as terminology, pricing, local customs & practices and which companies are good payers and which ones to avoid. In fact, the discussions on the forums of Source of Title were largely responsible for the formation of the National Association of Land Title Examiners and Abstractors (NALTEA), the first-ever nationwide trade industry group devoted exclusively to the concerns of title examiners and abstractors.

Despite early concerns that increased frequent use of the Internet would come at the expense of personal interaction, studies are finding that not only is the reverse true, but that the ‘net actually helps people to strengthen and maintain their social networks. A recent report by the Pew Charitable Trusts, for example, highlights how the web has supplemented, rather than replaced people's interactions with one another outside the virtual world. Of course, it goes without saying that ActiveRain, (as I'm finding out), is a very popular lead-generating/networking resource for real estate agents, brokers and mortgage professionals. Since I've only recently discovered the ‘site myself, I'm still familiarizing myself with all of its features and I'm more or less on the front end of the AR learning curve. Nonetheless, I'm finding it to be a great resource for reaching out to a wider audience within the real estate community.

So, while technology is not without its problems, it also presents us with unique opportunities for networking, marketing and making our voices heard. There is much work to be done in the way of educating our colleagues in the real estate community (as well as consumers) about the importance of quality title work. The objective of this blog will be to keep ActiveRain members and visitors apprised of the latest developments relating to the abstracting trade and to bring items of interest to the attention of the real estate community at large.

Big Title Challenges Denial of Records Request

Scott Perry (Jireh Business Information Solutions, Inc.) — Thu, 07 Feb 2008 16:12:41 -0600

Alert ActiveRain reader and Minnesota abstractor Anita Backlund found an interesting case out of New York State. It seems that Data Tree, LLC, a division of First American Corp. recently went to court to compel the Suffolk County Clerk's Office to provide to Data Tree with copies of public land records dating from January 1, 1983 to the present, pursuant to the state's Freedom of Information Law (FOIL). The Clerk's Office denied the January 2004 request on a threefold basis: 1) the records would have to be re-written and re-formatted; 2) the volume of the records involved and the commercial nature of Data Tree's business would constitute an unwarranted invasion of personal privacy; and, 3) the records are already available in the Clerk's Office for inspection and/or copying.

The Supreme Court and the Appellate Division rendered summary judgment in favor of the County and denying Data Tree's request. However, on December 18, 2007, the Court of Appeals reversed, holdng that "questions of fact exist as to whether compliance with such request would require the Clerk to disclose information excluded under the privacy exemption of FOIL and whether the Clerk has the ability to comply with the request in the format sought by Data Tree." Matter of Data Tree, LLC v. Romaine, 9 NY3d 454 (2007). Furthermore, the Court asserted that Data Tree's commercial motive was irrelevant, since its intent was not to obtain a list of names and addresses for marketing or similar purposes.

While the Court acknowledged that some documents may contain private information, it has remitted the case to the Supreme Court to determine whether the information can be redacted and to resolve the issue of whether compliance will cause an undue burden to the County. I'm no expert when it comes to computers, but people I've spoken with about this tell me that redaction software technology is no where near reliable enough to handle a project of such magnitude. For example, Optical Character Recognition (OCR) software cannot distinguish a Social Security Number from a Parcel ID.

Coincidentally, it was Data Tree, LLC which recently announced that it was expanding its nationwide database of recorded property documents to more than four billion documents, according to a report on SourceOfTitle.com. The company boasts that it adds over 1,200 documents a minute to its database.

Open-records laws, intended to facilitate transparency in government, were never meant to be used by large corporations as a battering ram to strong-arm their way into our record rooms. We need to start lobbying our state legislators to close the loopholes in those laws to protect the interests of the private citizens that government serves.

ActiveRain Bloggers Blowing the Whistle on Big Title's Offshore Abstracts

Scott Perry (Jireh Business Information Solutions, Inc.) — Wed, 06 Feb 2008 08:06:03 -0600

Thanks to ActiveRain bloggers Ed Rybczynski and Lenn Harley, AR members and visitors have been alerted to Big Title's practice of sending title searches to overseas vendors. The offshoring of title searches is an issue that we abstractors have been dealing with for some time now, and the addition of Ed's and Lenn's voices to our cause is very much appreciated. I was surprised from reading some of the comments just how many real estate agents and brokers were unaware of this practice. Of course, if I were shipping the United States over to India one courthouse at a time the way Big Title is doing, I wouldn't be making a big public showing of it, either.

Lenn really nails it with this statement:

"The title search is one of the most important transactions involved in buying a home. It's isn't the place to begin an economy drive."

Well put, Lenn. Real estate agents and brokers need to start educating themselves about the internal practices of the title agents and lenders they work with. They need to start asking questions. Does your title agent use only "hands-on" abstractors with an intimate knowledge of the quirks of each local indexing system? Are they issuing policies on short searches or do they insist on having a full 40- or 60-year title search which has been reviewed by a qualified title examiner or attorney? Are they putting your consumer at undue risk just to save a couple hundred bucks?

I've said it before and I'll say it again: a title policy is only as good as the search that was relied upon to issue it, and by extension, the search is only as good as the abstractor who prepared it.

Brother, Can You Spare a Dime? A Wake-Up Call for the Title Insurance Industry

Scott Perry (Jireh Business Information Solutions, Inc.) — Mon, 04 Feb 2008 06:39:41 -0600

Things aren't looking so good for Big Title these days. A Bloomberg News article said recently that First American Corporation stock has dropped 27% in the last year. Another story in the Wall Street Journal says shares for Fidelity National and LandAmerica were off by 40% and 57%, respectively. Average daily title orders for First American were down 6% in July 2007 from the previous month, while Fidelity National Financial slowed almost 8% for the period from April to June of '07. First American also had a 52% spike in claims for Q2 2007 compared to the same period the previous year, according to the Journal.

The WSJ story examines how title insurance industry activity can be a more accurate barometer of the housing market than other indicators. That's because title insurance policies are normally issued right around the time that a deal closes, so they tend to be a pretty good indicator of sales activity. According to one insurance industry analyst, "if you want to know what's going on in mortgage activity, you look at title orders."

Another reason is that title claims tend to rise in times when the housing market is slow. The rising rate of foreclosures resulting from defaults on subprime mortgages has been followed by a surge in the number of title insurance claims. From my own perspective, I've been seeing more title problems turning up lately in some of the foreclosure searches I've been doing. I believe there are several reasons for this.

Back during the refi boom, lenders and title agents were scrambling to try and close as many deals as they could as quickly and as cheaply as possible, giving rise to an influx of unqualified individuals doing searches, policies being issued on what are known as "short searches" and more and more reliance on the offshoring of title searches to overseas "thin" title plants. Of course, the latter is a practice that has cut into my business, which I'm admittedly not very happy about, but more than that, I'm concerned that in the end, the consumer may or may not be getting the type of protection and peace of mind that he thinks he's paying for.

The American Land Title Association (ALTA) has been focusing its marketing efforts on promoting the advantages of title insurance directly to the consumer. In fact, there's a page in the Consumer Information section of their website devoted to answering consumer questions about why they need title insurance. Now, I firmly agree that title insurance is something that no homeowner should ever be without; personally, I won't buy a piece of real estate without also purchasing an owner's policy that protects my interest. What jumped out at me, however, was the section on fraud and forgery, which recounts the story of a couple who purchased a home from a seller who had recorded a forged deed. I noticed that the article is careful to mention that the forger "spent time at the local courthouse in advance, searching the public record to find a property with out-of-town owners", but then there's this:

"Fraud and forgery are examples of hidden title hazards that can remain undetected until after a closing despite the most careful precautions. Although emphasizing risk elimination, an owner's title insurance policy protects financially through negotiation by the insurer with third parties, payment for defending against an attack on the title as insured, and payment of valid claims."

I suppose that's OK as far as it goes, but my question to ALTA is, how can you claim to emphasize risk elimination when you advocate the online publication of public records, a practice which has been proven to facilitate the very types of fraud you warn consumers to look out for?

The real estate fraud that Big Title is warning us about is at an all-time high, thanks in no small measure to the ready availability of online public records. I think we're only seeing the tip of the iceberg when it comes to rising title insurance claims and continued losses to the industry could prove devastating. The title insurance industry had better wake up to the reality that having "boots on the ground" and keeping the records within the four walls of our courthouses is the only proven way to reduce their risk, protect their consumers and ensure the integrity of the land records systems in this country.

And the Hits Just Keep on Coming...

Scott Perry (Jireh Business Information Solutions, Inc.) — Fri, 01 Feb 2008 07:55:04 -0600

Source of Title reports that Red Vision Systems, Inc. has just been named as the "title search solution provider" for SLK Global BPO (Business Process Outsourcing) Services. For those who may not be aware, Red Vision is the company which recently bought 22 million public records from Fort Bend county, Texas for just under $2,000.00. At least we know now where those records are going...off to India and other exotic offshore locations. To find out if your elected officials have sold you out (or plan to), check out Red Vision's website.

"Big Title" Adding Insult to Injury

Scott Perry (Jireh Business Information Solutions, Inc.) — Tue, 29 Jan 2008 06:17:20 -0600

In my last blog entry, Is "Big Title" Outsourcing YOUR Security?, I explored how the major title insurers are shipping your personal information off to the third world. Well, Reuters recently reported that First American Corp. is planning to spin off its financial services arm, which will include "worldwide residential and commercial title operations". According to the article, the company plans to "aggressively reduce employee counts" and cut operating costs by offshoring processing related jobs to--you guessed it, India and the Philippines.

"We are now challenging all of our operators across all of our information businesses to move at least 40 percent of their workforce offshore, and we think this exercise will drive incremental margin improvement," says Chief Operating Officer Frank McMahon.

Maybe it's just me...but in my humble opinion, when a company which calls itself First American (and whose logo is the American Eagle) is not only shipping jobs overseas, but also the sensitive information entrusted to it by its customers...that's just adding insult to injury.

Is "Big Title" Outsourcing YOUR Security?

Scott Perry (Jireh Business Information Solutions, Inc.) — Fri, 25 Jan 2008 22:20:52 -0600

Most of us think of outsourcing in terms of manufacturing jobs lost to low-wage workers in places like Mexico or China. You may be surprised to find out, however, that the latest corporate trend in outsourcing isn't taking place at companies like Wal-Mart or Microsoft. This time, it's the major title insurers, and they're shipping your sensitive personal information off to places like India, Pakistan, Nigeria and the Philippines to be made available worldwide with just the click of a mouse...all for the right price, of course.

Thanks to the miracle of modern technology, access to the sensitive personal information contained in literally millions of public record documents is available to anyone with Internet access according to David Bloys, owner of Davick Services of Shallowater, Texas, a noted expert in the field of public records security. "If you're concerned about protecting your sensitive information from identity thieves, it isn't your wallet you need to watch, it's your local government," says Mr. Bloys, who publishes the online newsletter News for Public Officials.

It was that newsletter which broke the story of what is believed to be the largest single transfer of a county asset to a private company in Texas history when Fort Bend County Clerk Dianne Wilson sold every single document ever filed in that office to New Jersey-based Red Vision Systems, Inc.

"An asset that took Fort Bend County taxpayers 167 years to create and ten years to digitize was transferred to Florida in approximately 150 hours, " according to the article. "Local taxpayers pay $1 a page for copies of their documents. Red Vision bought every document at the liquidation price of 10,000 pages for a dollar. With a mission to ‘revolutionize' the way banks, attorneys and title companies do business with local government, the company has more U.S. courthouses on its shopping list."

The newsletter cites example after example of how fraud, identity theft and other crimes have been facilitated by the ready availability of online government records. Using commonly available software, criminals can can create official-looking documents by browsing government websites and pulling up documents listing names, dates of birth, mother's maiden names, scans of signatures, notary seals...everything the enterprising criminal needs to perpetrate the perfect crime.

Some county officials, however, have taken a proactive approach in protecting the security of their citizens. A recent editorial in a Cleveland, OH newspaper was highly critical of Lake County Recorder of Deeds Frank Suponcic for his failure to respond to the bulk request of millions of public record documents from a company called Property Insight, an information broker which is a subsidiary of Fidelity National Financial, one of the nation's "big five" title insurers, whose market share is close to 29% of the market. The editorial, which appeared in the January 8, 2008 edition of the News-Herald suggests that Mr. Suponcic's failure to respond timely to Property Insight's request is "a barrier that hinders openness" in government.

Mr. Suponcic is concerned that this bulk information can and will be made available online, and that because some of the documents contain sensitive personal information such as social security numbers and the like, the potential for illegal use is too great a risk to the security of the citizens of his county. Furthermore, the cost to taxpayers for compliance with such a request amounts to thousands of dollars; yet Property Insight would only pay $1.00 plus postage for each CD, each of which can contain as many as 10,000 digitized images. By contrast, the statutory rate for the average citizen walking in to request a copy of their deed or mortgage in most counties here in Pennsylvania is anywhere from .25¢ to .50¢ per page; in Ohio, it can be as much as $2.00 per page. Most deeds average anywhere from four to five pages in length, while some mortgages can run as many as 21 pages long.

"Big Title" isn't taking no for an answer, though. First American Title was among several other major title insurers which have recently gone to federal court against the Registers of Deeds of five Michigan counties to enforce their "right" to purchase public record documents in bulk for re-sale to third parties. In a reversal of a lower court decision dismissing the case, the Court of Appeals for the 6^th Circuit held that, "the registers may not condition bulk discounts, non-paper reproduction, or reproduction of records generally, on the purchaser giving up his right to sell the official certified copies (or unofficial "copies of copies," or the information therein) to third parties." First American Title, et al. v. DeVaugh, et al., 480 F. 3d 438 (6th Cir 2007).

Not surprisingly, the American Land Title Association (ALTA), the powerful trade industry lobbying group funded largely by the major title insurers, is also a proponent of the bulk distribution of public record information. In a recent entry to his blog, Robert A. Franco, President of of VersaTitle Services, Ltd of Mansfield, Ohio and owner of the Source of Title website compared the official position of ALTA on this issue with that of the National Association of Land Title Examiners and Abstractors (NALTEA):

"Ultimately, it boils down to which side promotes the best interest of consumers. Local title agents and abstractors know the community and quirks involved in the local real estate conveyancing system. They are able to provide a superior level of service to the local citizens. When transferring property interests in their community, it is better to keep the system operating on a local level."

Yes, I have to admit to some bias here; title searches, once an exclusive function of small independent abstractors like myself are gradually being replaced by large offshore operations, known as "thin" title plants in an effort to reduce overhead. So yes, this does affect my livelihood; but as I've said before, a title insurance policy is only as good as the search that was relied upon to issue it, and by extension, the search is only as good as the abstractor who performed it.

By definition, "public records" should mean "public" within the sphere of influence of the local community to which the records relate. It is quite a stretch to imagine that the intent was to make such records available to anyone around the world with a computer and an internet connection. The outsourcing of functions which were once performed by local personnel to foreign lands such as India, Pakistan and the Philippines is a serious threat to the integrity and security of our public records.

Local citizens have a vested interest in maintaining the safety and security of the records they have entrusted to their elected officials. Their tax dollars and recording fees subsidize the indexing and safekeeping of records relating to their most precious asset: their homes. Anyone who travels to the local courthouse where the records are housed has always been, and is still able to access those records at any time during regular business hours. The fact that technology has made such unfettered access possible does not mean that we should hand over the keys to our courthouses to foreign entities which may not necessarily have our best interests in mind.

Subprime Mortgages: What Does God Think?

Scott Perry (Jireh Business Information Solutions, Inc.) — Sat, 05 Jan 2008 00:45:11 -0600

As an Evangelical Christian, all this talk about subprime mortgages and predatory lending has gotten me to thinking...what does God think of all this? There was a recent article from Reuters which examined the issue from a religious perspective, but to get God's take on things, I had to go straight to the source--His Word as revealed in Scripture.

Now, I make no claim of being a Biblical scholar, nor do I consider myself a "religious" man. However, I do love the Lord, and have been studying the Bible my entire life (thanks in large measure to my mother, who read Bible stories to me and each of my siblings from birth). It surprises many people when I tell them that God's Word talks more about money than it does about faith, love, sex, or just about any other subject except God Himself. In fact, money is mentioned in the Bible over 800 times. Jesus Christ, during His earthly ministry, devoted a number of His parables to illustrating how we should deal with our finances. He teaches that our money really belongs to God and that we are simply the "managers"; He uses money as a test to see how we will handle greater things; "thou hast been faithful over a few things, I will make thee ruler over many things" (Matt. 25:13). He also warns us that money has tremendous power and cautions us not to let our things own us, that "no man can serve two masters" (Matt. 6:24).

The Reuters article mentions a Biblical prohibition on the charging of interest. This comes from Deuteronomy 23:19, (KJV) "Thou shalt not lend upon usury to thy brother; usury of money, usury of victuals, usury of anthing that is lent upon usury: (v. 20) Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury: that the LORD thy God may bless thee in all that thou settest thy hand to whither thou goest to possess it."

So in reality, the prohibition is not on the charging of interest, per se, but on usury. Merriam-Webster's Online Dictionary defines usury as: "the lending of money with an interest charge for its use; especially : the lending of money at exorbitant interest rates"; or "an unconscionable or exorbitant rate or amount of interest; specifically : interest in excess of a legal rate charged to a borrower for the use of money". The Hebrew word used in Deuteronomy is nashakh, "to bite" or to vex. According to Mosaic law, the Israelites were prohibited from taking interest from a fellow Jew on the loan of something that was considered a necessity. It also proscribed the taking of interest in a case of dire need or extreme poverty. In the case of strangers, however, it was permissible to loan money at interest.

The practice of mortgaging lands (sometimes at confiscatory rates of interest) began with the Jews during their captivity in Babylon. In Nehemiah Ch. 5, during the rebuilding of the walls of Jerusalem, Nehemiah rebukes the nobles and the rulers for mortgaging lands at astronomical interest rates. People were desperate for land and the ruling classes were raising the prices far more than people could afford to repay (sound familiar?) Nehemiah called this extortion and came down on them hard for the practice.

As an aside, modern Muslims still adhere to their ancient prohibitions against charging interest. I did some research on the Islamic principles of non-interest lending, and they have some pretty creative financing vehicles. According to Wikipedia, instead of making a loan to the buyer, the bank buys the land from the seller and re-sells it to the buyer at a higher price while allowing the buyer to pay in installments. There are other such approaches, such as sale and buyback, profit sharing, safekeeping and joint venture which basically accomplish the same thing. The Wikipedia article, however, does not address how federal truth-in-lending or financing disclosure laws would apply to such arrangements.

In the New Testament, Matthew 25:14-30 recounts the Parable of the Talents, in which Jesus tells the story of a man who goes out of town having entrusted some of his money to three of his servants. Upon his return, the man calls his servants to account for the money he gave them. Two of the servants give the man his original investment, plus 100%. The man calls the third servant (who hid his talent in the ground and did not invest it) "wicked and slothful" and that "I should have received mine own with usury." (v. 27) Of course, we know Jesus is using this parable as a spiritual object lesson, but the point is that in terms of trade and business, interest was never forbidden in Scripture, quite the opposite, in fact. The only thing prohibited was extortion and unreasonable interest.

So how does the borrower fit into this Scriptural scenario?

First of all, Scripture refers to debt as bondage. Psalm 22:7 tells us that, "...the borrower is servant to the lender." While the Bible cites no direct prohibition upon taking on debt, Romans 13:8 states, "Owe no man any thing, but to love one another..." It would probably be a lot easier for most Christians if the Bible did explicitly proscribe borrowing. But Psalm 37:21 (KJV) states, "The wicked borroweth and payeth not again: but the righteous sheweth mercy, and giveth." This clearly indicates that if we incur debt, we should repay it. "A good name is to be chosen rather than great riches..." Psalm 22:1 (KJV).

Lots of folks saw falling interest rates and rising property values as an opportunity to "cash in", either buying more house than they could afford or cashing out equity to finance such things as big-screen TVs, vehicles and so forth. As Christian financial adviser Dave Ramsey puts it, "we've used all this money we don't have to pay for stuff we don't want to impress people we don't like." Many unscrupulous lenders and brokers took advantage of the situation and made loans that they knew in their hearts their borrowers would never be able to repay, then re-packaged and sold portfolios of these loans to third party investors. Now the whole subprime scheme has blown up in their faces, leaving investors "holding the bag" and borrowers with no alternative but bankruptcy in some cases.

God's moral imperative is clear: lenders have an obligation not only to exact a fair price and rate of interest, but to refrain from extending credit to those who cannot repay, "And as ye would that men should do to you, do ye also to them likewise." Luke 6:32 (KJV); conversely, borrowers have a duty to live within their means and to pay all debts and obligations when due. We Americans can all certainly use a good healthy dose of common sense when it comes to being good stewards of the resources God has entrusted to us, and the Bible gives us the perfect "study guide".

The Case for Certification and Licensing

Scott Perry (Jireh Business Information Solutions, Inc.) — Tue, 01 Jan 2008 20:05:55 -0600

I'd venture to guess that most of you reading this get up in the morning with a fire in your belly and a genuine passion for the work that you do. You are the backbone of not only the real estate and title industry, but of this great nation of ours as well. You are the ones who are making this country work, and it is a genuine privilege to be associated with a fine group of talented people such as yourselves.

That is why in March 2004, I first proposed the concept of a national association for title searchers. I thought that a national organization with the goal of improving the profession of abstracting by giving abstractors a unified voice was way overdue. That organization, thanks to the tireless efforts of a core group of volunteers, has become what is now known as the National Association of Land Title Examiners and Abstractors (NALTEA). It is gratifying to see that I have colleagues in the abstracting community who not only share my vision for the future of our trade, but who have cared enough to contribute their time and talent to bring that vision to fruition.

NALTEA will hold its annual conference in New Orleans later this month, where it will be offering its initial Abstractor Certification Exam. As pointed out by Lynn Hammett of NALTEA's Education Committee, the abstractor is the only person in the real estate transaction not required to have some sort of certification or licensing. NALTEA's intent is to use this initial exam to create a professional designation with ongoing education requirements for title abstractors and examiners.

While I've long been an advocate for licensing of abstractors, any state requirement for licensure should have an examination component to keep it from simply being another revenue stream for the state governments. As it stands now, only a handful of states require abstractors to be licensed and requirements vary widely. The state of Kansas, for example, simply requires an applicant to 1) fill out a form, 2) pay an application fee, and 3) be able to fog a mirror when held under the nose.

At this writing, Pennsylvania does not yet have a requirement for licensing. When and if that ever happens, licensing should require an exam based on the standards set forth in The Abstractor's Bible by Attorney William F. Hoffmeyer, a recognized expert in the field of real estate law, particularly in the area of conveyancing interests in land.

As someone who truly has a passion for this line of work, it seems to me that in a state where even used car salesmen need to be licensed, the least we could do is require the same of the people who research and compile information about the biggest single investment most people will ever make in their lives.

Title Abstractors: Your First Line of Defense

Scott Perry (Jireh Business Information Solutions, Inc.) — Mon, 31 Dec 2007 03:06:00 -0600

Many real estate professionals are familiar with the function of title searchers and title abstractors. However, few stop to consider the importance of the role that the abstractor plays in the overall transaction. With all the talk of improvements in technology infrastructure and outsourcing of title search functions to overseas "thin" plants, it seems that most title people think that conducting a title search is simply a matter of inputting a few keystrokes on a computer. Worse yet, those same people are more likely to trust an automated title search than a search performed by a live human being. In fact, in a recent Forbes magazine article entitled, "Inside America's Richest Insurance Racket", author Scott Wooley claims that title insurance, "...is far less necessary in these days of computerized records, online searches and rare instances of title fraud or hidden liens."

I find it staggering that Mr. Wooley could be so woefully misinformed. One need only pick up a newspaper these days to be aware of the recent increases in fraud within the real estate industry, including property "flipping", mortgage fraud and identity theft. I believe that competent title abstractors are the first line of defense against such schemes. They function not only as the gatekeepers of the information the title industry relies upon, but as proofreaders for the county recorders' offices, bringing indexing errors to the attention of county workers.

A title policy is only as good as the title search that was relied upon to issue it. By extension, a title search is only as good as the abstractor who performed it.

Professional Abstractors: "We Don't Get No Respect"

Scott Perry (Jireh Business Information Solutions, Inc.) — Mon, 10 Dec 2007 11:28:41 -0600

If title agents are the "low men on the title totem pole" then abstractors are truly the "Rodney Dangerfields" of the title industry. We just don't get no respect. I really believe that many title agents just don't understand the time and effort that goes into a properly prepared abstract report. I think the mindset among real estate professionals in general is that title searching is something that is primarily done part-time by retirees and housewives trying to make a few extra bucks on the side.

Now, I'll grant you that there are a lot of fly-by-nighters who think they're abstractors because they know how to look up a deed. I encounter them out here in the field all the time. They're usually high school and college kids, hired by lenders and local agents, who have gotten MAYBE two weeks of training and are turned loose in the Recorder's office, or else they're community college grads who hang out a shingle and offer to undercut the fees of more experienced abstractors just to get clients. I've actually seen a title abstracting course offered online by an outfit out of GA that promises to "teach you everything you need to know to perform a title search". Frightening, but true.

I think those are BIG reasons that abstractors so often are the ONLY ones who are expected to basically work for free if a transaction does not close. No one would ever suggest that an appraiser or a surveyor waive his fee. If I call a repairman out to my house to fix my furnace, I have to pay him for a service call even if he doesn't find anything wrong. Appraisers, surveyors and home inspectors get paid regardless of whether or not the deal closes. Why should the searcher be treated any differently than any other professional? I don't know about anyone else, but I put out a substantial amount of money up-front to get a search to a client's desktop, not to mention the tremendous liability I'm being asked to assume. Why am I the only one in the "food chain" expected to "eat" my fees?

Personally, I'd like to see the abstractor's fee listed as a separate line item on the HUD, rather than being buried in an "all-inclusive" title premium as is the case in PA. I think that some type of licensing or certification would go a long way toward changing things. Our trade association, the National Association of Land Title Examiners and Abstractors (NALTEA) is offering an Abstractor Certification Test at its annual conference in New Orleans this year. It will be interesting to see how it will be received by the industry at large.