ALTA President Mike Pryor's Full Letter to the Wall Street Journal
August 3, 2009
Your recent story, Title-Insurer Fees Draw Scrutiny, notes that "for most people, title insurance is just another mysterious fee." As one who sells title insurance for a living, I agree with your assessment. However, as with most "mysteries," knowledge provides clarity and understanding. A continued dialogue can be highly beneficial to a better understanding of this "mysterious fee."
Few know the critical role of title insurance in the American economy. It is not only a facilitator of a lender's need to securitize a transaction, it is also a speedy facilitator. Title insurance actually saves borrowers money because it reduces the costs of loan and locked interest rate commitments. Few understand the research, correction, and improvement to the public records that is the result of a properly searched title. Fewer still grasp the absolute calamity that would be visited upon America's entire system of wealth building and home ownership if those valuable property records were not being properly searched and regularly updated by experienced title professionals. Long before our current economic troubles, title industry statistics revealed that one in three residential transactions required some form of corrective action to clear title prior to closing. With identity theft and fraud on the rise, one could reasonably expect that number to increase.
The fundamental error in most people's approach to this "mysterious fee" is their view that title insurance is just a financial product, that all title policies are the same, and that the lowest price is always the best. Such a limited view will yield no clarity to solving the mystery. Solving any mystery requires us to look at the facts from every angle. Only then, can we declare the mystery solved.
2009 President, American Land Title Association
CEO, Lenders Title Company
Little Rock, Arkansas