I realize that I've been pontificating quite a bit  recently about the dangers of "offshoring" title work to India.  For those of you who are tired of my rant, I apolagize in advance.  It's just that I'm an "old school" title abstractor and title examiner.  I know that title searches conducted overseas are a waste of bandwidth and eventually we'll be inundated with senseless litigation that could have, should have, been avoided. 

Earlier today, I mailed the following letter to United States Senator Barbara Mikulski.  Tomorrow the same letter is being sent to all other federally elected officials from the state of Maryland.  Will it do a damn bit of good?  I don't know!  I just know that I've done something, anything, and will continue to do everything possible.  It makes me feel better somehow.  I'm going to ask every title person that I know to mail a modified version of this letter to elected officials from their respective states, if they believe in this cause.  I guess as a nation, we've generally become indifferent, or complacent, and causes don't have the meaning they once did.  I appreciate the support offered by the Active Rain community. 

Let me know your thoughts about the letter. 

___________________________________________________________________________________________________________________________________________________ 

Dear Senator Mikulski:

A development with potentially detrimental consequences for Maryland’s homeowners and the state’s workforce has been revealed in The Economic Times, published in India. A recent article titled “Winning the title bout in style” (copy attached) tells the story of a certain entrepreneur, named M Sanjay Kanth, who owns a Bangalore-based company that provides real property searches, among other services, to the American Title Industry. Three of this nation’s largest title insurers, First American Title, Fidelity National Title, and Stewart Title, are outsourcing domestic title searches to India. The methodology employed in processing the orders is every bit as disturbing as the loss of jobs locally and across the nation.

Automated ownership records are an invaluable resource for title professionals, but have limited application from a risk management perspective. Substantive research must be conducted at courthouses where it’s customary for trained abstractors to compare title indexes to other sources of information. The secondary sources of information are often handwritten ledgers maintained by clerks at various desks scattered around administrative buildings. Admittedly, the process is draconian, but it’s all that exists in most states and very accurate once the idiosyncrasies are learned. It takes years of supervised abstracting experience for a candidate to qualify for errors and omissions insurance.

As I’m sure you’re aware, Maryland was the second state to automate it’s land records, in 2006, and make certain information available online, without charge. While the site is a tribute to human ingenuity and the marvels of technology, it’s search qualities lack the accuracy and predictability needed to prepare an owner’s title policy. It’s possibilities are eclipsed by it’s practical limitations. Title research conducted on-line has the heightened potential of producing catastrophic results for innocent consumers with the degree of risk exposure varying by individual state and jurisdiction. 

The following disclaimer must be acknowledged before entering Maryland’s automated site:

“The Clerk of the Circuit Court assumes no responsibility for this site.  This website should not be used as a sole source for searching title. Researchers must check all indices including those at the courthouse.”

The disclaimer speaks for itself and exists for good reason.

Untold numbers of Maryland residents who work as abstractors will soon become unemployed if they haven’t already. The exact count is impossible to estimate as the group has failed to organize formally. The elimination of domestic abstracting jobs is not a legitimate example of disintermediation as the involuntary void is creating employment opportunities overseas. Accurately compiled title research using every available resource is as important today as it was in the past.

The questionable motives of title insurers who encourage the use of unreliable data to produce title policies clearly raise public policy implications. Litigation free homeownership is a fundamental premise of a culture dependent on real property as a source of financial and emotional security. Title insurance theory has as it’s conceptual core the avoidance of losses through skilled risk evaluation and mitigation. Thorough research provides the functional underpinning for a properly drafted title policy and the legitimacy of property rights at time of transfer.

Last November, James R. Maher, the Executive Vice President of the American Land Title Association, wrote a highly publicized letter refuting a scathing indictment of the title industry by Forbes Magazine.

In part, Mr. Maher wrote:

”Title insurance is much more than an insurance policy—it is the very extensive process that occurs before the policy is issued to ensure, to the extent that it can, that the title to a specific property is free and clear of defects. Issues with title are found and corrected by title professionals in one out of every three residential real estate transactions ... For most Americans, their home is the single largest financial investment they will ever make. There are literally dozens of ways in which the title to their property can be jeopardized. The title insurance industry exists to ensure that title issues don’t affect their homeownership rights—before and after a purchase.”

The abuse of abstracting protocol has historically resulted in title claims for trusting home purchasers.

During the past year, the troubling behavior of title insurers has attracted the concerned, sometimes angered, attention of elected officials, government authorities, litigators, and media. The Government Accountability Office, this past April, released an unfavorable report pointing to the societal risks imposed by the oligopolistic nature of title insurance markets. Indisputably, industry leadership has strayed from a mandate to guard the property rights of this country’s citizens and lending institutions. Title insurers must be held to the high standards of accountability dictated by any position of public trust. The public deserves no less. Nothing other can be tolerated without imposing unnecessary costs, emotional and financial, on the American public.

The concerns raised by the developments described herein far exceed the scope of a single letter. A dysfunctional title industry contributes to a broad range of problems for communities and families. I ask for the opportunity to meet with you in person to further discuss these very important societal issues currently affecting your constituents.

Sincerely,