Steve Poizner, the insurance commissioner for the California Department of Insurance, recently stated that "the title industry is broken." In many respects he is correct and I, for one, agree with many of his recommendations. Especially the idea that title insurance companies need to change themselves. He wants to offer title insurers a chance to clean themselves up before creating more regulations. IMO this is the way to go and let's hope that the title companies in California get the message.
Roberto Franco at the Source of Title Blog has a new post discussing some if his ideas. I agree with much of what he is saying but there is one point that I do disagree with. He believes is that marketing to consumers is not the right way to go and states "If the goal is to get the title companies to market directly to consumers, that may increase operating costs. It may be difficult to get the title companies to spend more money on marketing in the face of rate caps." OK, he may be right if title companies continue to market to real estate professionals AND add consumers to their marketing efforts. IMO what Mr. Poizner wants is to diminish the amount of marketing money (and sometimes kickbacks) spent on the professionals and move that effort to consumers.
I think this is the right way to go for two reasons.
- It can significantly decrease the corruption that is too accepted by many in the industry.
- By reaching consumers directly title companies will be able to educate them about title insurance and maybe help change the way the public views them.
It seems that the only time the general public hears about title companies is when another one is being sued for illegal practices. Those companies that are being sued may be in the minority but to the general public it is standard operating practice. This needs to change and marketing directly to consumers will help do that. Roberto Franco makes some very good points but I disagree with him on this one.