Innovation on the Title Side? Yes, There Is

I’ve conducted thousands of interviews with mortgage executives since I started covering this business back in the ’90s. During many of those interviews, I’ve asked leaders of some of the industry’s most successful companies how they came to work in home finance. I have yet to hear a single executive tell me that they left high school intent on entering a university in the hope of one day becoming qualified to run a mortgage company. People just end up here, for whatever reason. I’m no different. A writer who loves technology, I found myself writing about the mortgage industry one day and found something like a home here. I’ve enjoyed it immensely. But looking back, there were clues that might have predicted this. One of my early jobs was courthouse researcher for a title and abstract company. Back in the ’80s, title companies were working pretty much they way they had since the beginning, at least in the rural Midwest. When a new order came in, the boss would hand me the names of the grantors and grantees and I’d trot across the street to the courthouse and make my way into the County Recorder’s vault and start poking around in the big, dusty, leather-bound record books. Later, I’d head over the tax assessor’s office and the county clerk’s, looking for any past due taxes or recent judgments. I’d compile my findings and carry it all back across the street to the office. I never dreamed that one day title companies would be on the leading edge of home finance innovation. But that’s exactly what I’m finding. In fact, I’m working on a story now about this very topic for my next column in the print edition of HousingWire Magazine. It turns out that the new RESPA changes have prompted some forward thinking title companies (and the technology firms that support them) to step up and offer some new tools. I think this is interesting because for most of the time I’ve been reporting on this business, title companies were the ones most engaged in keeping everything exactly the same as it has always been. Sure, the bigger firms will argue with me and tell me about all the client-facing innovation they’ve engaged in over the years to keep their clients happy. The truth is that title insurance has been, at least for the recent past after the sector’s consolidation, dominated by a few giant companies that have been so resistant to change that when one innovative company stepped forward with a new title product a few years back, the other firms in the space sued it nearly to death. Change has not been viewed as a friend to the title insurance business. There are, of course, many excellent reasons why title companies hate change and they are generally immediately preceded by a dollar sign. But one of the consequences of an administration that is desperate to create change before the rest of its former constituents give up on it completely is, well, change. I seriously doubt that the new RESPA rules will have any impact on borrowers’ ability—or willingness—to shop around during the mortgage origination process. But then, I would have said I had no faith in the changes causing anything but kicking and screaming on the part of title companies, and there I would have been wrong. I’ll tell you more about some innovative title industry execs in a future Beyond Binary column. Until then, I’ll be watching this sector to see what these guys do next. Rick Grant is a veteran journalist, covering mortgage technology and financial markets. Follow him on Twitter: @NYRickGrant