2022 State of the Title Industry Roundtable Recap

For the fifth year in a row, PropLogix has launched its latest State of the Title Industry Report, highlighting many of the experiences and challenges faced by title professionals in 2022. To help us dissect what happened this year, we invited some industry experts for our 2022 State of the Title Industry Roundtable, where we discussed the results of our survey. Here’s a recap of that webinar in case you missed it!

 — Prefer to watch the webinar? Click here to view it. 

A Little Bit About Our Panelists

We invited three notable professionals to our panel of experts for this year’s discussion. The first guest; the American Land Title Association (ALTA) CEO, Diane Tomb. Diane has over 20 years of experience in the housing industry and has served as ALTA’s CEO since 2019.

Second to join us was David Townsend, founder of Agents National Title Insurance Company. David also serves as a board member of ALTA and has worked with the University of Missouri to create learning opportunities for college-age adults and students coming out of high school interested in the title industry.

Our third panelist was Brent Scheer; our very own Chief Financial Officer at PropLogix.  Brett has served on various ALTA committees, including serving as the chair of the ALTA’s Accounting Committee from 2010 to 2016. He also serves as a Board member of the Title Reinsurance Corporation.

Who Are Today’s Title Professionals?

As Diane acknowledged, we have an aging workforce, with more than half (56%) of professionals between the ages of 45 and 64. Over the past few years we’ve started to see a larger share of younger people in the industry, but still, about a third of the industry is over the age of 55, which is far more than the national average in terms of the overall labor pool. Below is a quick glance at today’s title professional:

This Year’s Primary Challenges

Juggling Too Many Responsibilities & Finding New Business

As title professionals have learned to do more with less this year, finding new business has become increasingly more difficult within the last few months. We took a pulse check based on a sample of 170 attendees during the Roundtable to see how our August SOTI data has changed over the past few months, and this is what we’ve found:

Data from our August SOTI Report (Ranked):

1. Juggling Too Many Responsibilities: 46%
2. Unexpected Delays: 44%
3. Not Enough Time: 28%
4. Educating other parties: 26%
5. Finding New Business: 24%

Data from our Recap Poll (Ranked):

1. Finding New Business: 51% 🔼 (+27%)
2. Juggling too many responsibilities: 22%  🔻(-24%)
3. Unexpected Delays: 7%  🔻 (-37%)
4. Not Enough Time: 11%  🔻 (-17%)
5. Educating other parties: 9%  🔻(-17%)

Fatigue

As Diane pointed out, when this pandemic first hit, we weren’t sure what it would look like for our industry. And since then, most title professionals haven’t had time to come up and breathe. Other industries had opportunities to sit back, bake bread from scratch, and learn new languages, while title professionals were trying to learn new technology to keep up with volume, and find new ways to work around the several obstacles that come with being an essential business in a pandemic. And then, in 2021, the insurance premium volumes increased by almost 36%. With the volatility the title industry has dealt with over the past couple of years, it’s safe to say it has been exhausting for all of us. 

As David mentioned, some companies did not staff up because they’ve been through this before and know what it’s like to have to step up and then shrink. So, a lot of those title agents did more with less or with the same. And that’s why they are worn out.

Volume

After this year’s interest rate spikes ended the refinance boom, volume took quite a dip for many companies in the title industry based on data from our August SOTI Report:

Far Above Average: (3%)

Above Average: (20%)

Average: (41%)

Below Average: (28%)

Far Below Average: (8%)

We took another poll during the roundtable and saw data shift a bit more, leaning more below average and far below average:

Far Above Average: 1% 🔻(-2%)

Above Average: 5% 🔻(-15)

Average: 18% 🔻(-23%)

Below Average: 42% 🔼(+14%)

Far Below Average: 34% 🔼(+26%)

As David pointed out, during the Refi Boom, the large national providers had to ramp up from about 250 to 300 people to anywhere from 1,200 to 1,400 people during that time in the pandemic. And now we are back to 2019 levels. In the Sunbelt, purchase business has stayed relatively strong because everybody needs housing as long as the jobs remain as strong as they are.

Title Professionals Consider Outsourcing

The majority of our respondents said that outsourcing allows them to focus on other important closing tasks.

As our SOTI data reveals, title professionals are more likely to outsource:

• Municipal Lien Searches (83%)
• Title Searches (71%)
• Tax Reports (65%)
• Judgement Searches (61%)
• UCC Searches (57%)
• HOA Research (47%)

While tasks that were once standard for people to do in-house have become more standard to outsource, title professionals still prefer to keep some tasks in-house. 

Title Professionals are more likely to keep these tasks in-house:

• Title Curative/Clearing (88%)
• Lien Release Tracking (75%)

As David pointed out, many states require you to perform certain tasks in-house, and that’s often the case with title clearing. If you’re paying a lien off, you need to ensure that it was released as a core function of title and closing.

Looking Ahead at 2023

After what we’ve learned from 2022, the panelists touched on some priorities for the title industry in 2023:

Optimizing Business in a Changing Market

As Diane mentioned, things have been volatile, but some things tend to be the same. ALTA’s primary focus for 2023 is optimizing business in a changing market. 

• How can we all anticipate those things? 
• What role can we play? 
• How can we get professionals to provide us with the information that we can share with others?

Many professionals in our industry have started companies in the last ten years and have not known a down market. As someone who started a title company right before the largest real estate downturn in the history of our country, David is optimistic for those who may be experiencing this for the first time.

Attracting Talent

Attracting talent, retaining talent, and developing talent, as our industry evolves is a top priority. As the economy is shifting, it is still important to keep our employees, and all of our industry folks trained and educated.

ALTA is currently working on a new consumer-facing website focused solely on bringing talent into the title insurance field. Features to include are:

• Job descriptions for every possible job in the professional’s office
• The benefits of being a professional
• Different career opportunities once you’re in the field

According to Diane, the biggest challenge is getting people to understand that this is a career.

Bringing Title to Universities

One of the things ALTA has talked about for 2023 is partnerships with universities to create a pool that has folks coming into our industry.

David has worked with the University of Missouri to create learning opportunities for college-age adults and students coming out of high school. He wrote a course for the University of Missouri Law School as an accredited class for title insurance. The students took abstracts from patent to current and learned about the closing process claims process. Some of his students have gone on to work in the industry for underwriters in their claims department, and others have managed the title operations for large real estate developers.

ALTA has also been working with Ivy Tech, one of the community colleges in Indiana, and developed a certificate program for Title and Escrow to attract younger talent. 

As Diane points out, our industry’s future jobs will be data-driven and technology-driven so it’s critical for us to skew younger to a certain degree.

Other priorities:

• Leveraging modern payment systems
• Promoting homeownership opportunities
• Protecting against predatory practices (like Right-to-List Agreements)

Financial Forecast

Brett has an optimistic prediction and thinks 2023 is going to see the normalization of today’s rate and price issues.  Based on Mortgage Bankers Association’s economic data and industry changes, he anticipates 2023 to soften as much as 10% on the purchase side. Looking at the low rates from 2021 and 2022, there is still demand out there and compression in pricing from the supply chain issues that we continue to work through. 

While we’ve got some work to do, we’re moving in the right direction.

Related Blogs:

• Reflecting on 2022’s Biggest Moments
• 2022 State of the Title Industry Report Recap (Plus 2018-2021)

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