ALTA Responds to Forbes Article
June 15, 2010
Forbes was at it again making another uneducated attack on the industry in an article posted online recently.
The article “Why Title Companies Hate Technology” is filled with inaccuracies and goes on to say that “if you want to know who owns a piece of land,” just grab a folder. The American Land Title Association quickly posted a response to the article within hours of its posting. Many other industry professionals also responded attempting to educate the author.
Below is ALTA’s response to the article:
Let’s be clear about the cost for title insurance. For a one-time fee, a title agent examines the history of a property contained in public records, where they find issues that must be corrected in one out of every three title searches. This time-consuming work is needed to ensure clear ownership to a property.
Technology has increased efficiency, but it is not a silver bullet. First, it takes money to build, maintain and update databases. Forged documents, one of the most common title problems found, in addition to falsified documents, invalid deeds, and incorrect property descriptions, are just some of the title issues which must be examined. Other title risks include recording mistakes, deed indexing errors, unpaid mechanics' liens, judgment liens, income tax or property tax liens, undisclosed easements, claims by missing heirs, and claims by ex-spouses. This behind-the-scenes work takes place so homeowners never have to think about it. All of this takes time and money, and can’t be simply replaced by technology.
Beyond assuring free and clear ownership, title insurance protects against errors in deeds, forgery, fraudulent conveyances, mistakes in public records and errors in estate proceedings that have happened prior to the closing of the transactions.
Consumers do have a choice in selecting the provider of their title insurance related services. They can either select their own title insurance company, or choose to designate a third party, such as a real estate agent, to make a recommendation. The American Land Title Association urges homebuyers, regulators and legislators to check out its consumer website, www.homeclosing101.org, to learn more about title insurance, the closing process and associated costs.