Title Abstract Offices

SIC 6541

Companies in this industry

Industry report:

This category covers establishments primarily engaged in searching real estate titles. This industry does not include title insurance companies, which are classified in SIC 6361: Title Insurance.

Title examiners, also known as title abstractors, are responsible for researching, analyzing, and evaluating the legal ownership or title to real property. Whenever real estate is bought, sold, or financed, a search of title records is required to determine all persons who may have a legal claim to ownership in the property. A title search may also be required to fulfill the terms of a will in distributing property, to subdivide land into smaller parcels, or to obtain a building permit. Persons who acquire land generally want to purchase property that is free from competing claims of ownership, delinquent taxes, and other legal headaches that can devalue the investment. Even buyers who purchase land despite such potential problems generally want to be made aware of any defects in the chain of title when making a bid. Title examiners review the chain of title for a number of defects, including liens on the property, easements, rights of way, water and mineral rights, and other encumbrances. Title examiners are typically employed by title insurance companies, land development companies, and state and local governments.

The common practice of recording real estate transactions with an official recorder or registrar began in colonial Massachusetts and quickly spread across the country. Every state keeps some form of public record that identifies formally documented property rights. In some states county governments are charged with the duty of maintaining official property records, while in other states municipal governments have been given that responsibility. But almost every locality categorizes and indexes the information in a slightly different fashion. Title abstracts are prepared to reflect these public records, often by the examiner. Title examiners then usually search the chain of title from the most recent owners to the oldest. When there is a gap in the public records, examiners must investigate further to complete the chain of title.

Additional investigation may include a search through miscellaneous public filings that could cloud title to land, including records relating to marriage, divorce, birth, adoption, and other legal proceedings. Plat drawings, metes and bounds descriptions, land books, and zoning ordinances may also help title examiners complete a chain of title and remove possible defects. After the search has been completed and all documents reviewed, title examiners prepare a title report that describes the property's legal title and lists any existing encumbrances, competing rights, or conflicting claims. Title examiners occasionally assist in preparing a legal description for property as well.

In the early 2000s, the leading title insurance companies also created title examination divisions. These title companies searched for other ways to expand their businesses, developing profit centers for a better bottom line, adding appraisal services, and increasing automation.

However, not all expansion in the industry was encouraged by the government. Certain proposed mergers and acquisitions raised federal antitrust concerns. In 1996, Commonwealth Land Title Insurance Company proposed to consolidate its title plant operations in the District of Columbia with those of First American Title Insurance, its only competitor in the market. The next year Commonwealth terminated existing contracts with customers and required them to sign interim deals under which they would pay higher prices for title services. In 1998, the Federal Trade Commission (FTC) issued an order in response to the proposed joint venture. The FTC compelled Commonwealth to rescind all the interim deals, make refunds to customers who were overcharged, and provide services to customers based on the prices, terms, and conditions available before November 1997. Commonwealth was also required to relocate its operations and maintain them as a fully functional title plant in competition with First American.

During the mid-2000s title examiners benefited from expanding technology to simplify some search efforts. For example, real estate and property information could be obtained from the MetroScan database, which offered fee-based services to title examiners. Operated by First American Real Estate Solutions, MetroScan provided property location and sales and loan information, confirmed legal descriptions, and retrieved land record documents. Data Trace was another fee-based service available to title examiners. Data Trace provided every document recorded on the property, including mortgages, liens, and easements. In addition, many county recorder and county assessor offices maintained web sites that provided information on ownership and any federal or state liens. Although such databases substantially reduced the time needed to research a title, complicated cases required title examiners to engage in more legwork to trace title transactions.

In the mid-2000s the title examination sector came under scrutiny as part of the broader examination of the title insurance industry. Referral kickbacks, work share, and inflated rates were investigated by the U.S. Department of Housing and Urban Development (HUD). During the early 2000s HUD tripled the number of staff dedicated to enforcing the Real Estate Settlement Procedures Act (RESPA), which, along with numerous state statutes, regulated the title industry. New RESPA regulations were published in 2008 and enacted in 2009 and 2010 in response to disclosure and other problems realized during the subprime mortgage crisis of the late 2000s.

A surge in housing sales during the early and mid-2000s, due in part to the availability of low-interest, subprime mortgages, kept title abstract offices busy. However, in 2006 the housing bubble burst. Housing prices fell as interest rates rose, and many Americans, in an economy that was spiraling downward, found they could not make their house payment. Default rates skyrocketed, as did foreclosures, as a majority of these subprime mortgages had been packaged and sold to investors on Wall Street. By September 2009, 14 percent of all mortgages in the United States were either delinquent or in foreclosure. In the second quarter of 2010 alone, more than 895,000 foreclosure notices were filed on U.S. properties, according to the Los Angeles Times.

Whereas the financial crisis of the late 2000s had the most significant financial effect on banks and other mortgage servicers, no single entity in the real estate industry remained untouched. One of the biggest concerns for title abstract companies, according to one claims advisory service, was the almost limitless litigation possibilities that were expected to arise. According to Jack Cuff and Associates, by February 2008, "278 lawsuits had already been made against virtually every participant in the subprime collapse." Although Kurt Pfotenhauer of the American Land Title Association commented in an October 2010 National Mortgage News article that "We think at the end of the day that the banks' errors in foreclosures are not going to result in title claims, because the bank's the one that made the mistake in the way it foreclosed," he also acknowledged that "to get to that conclusion, we will have to engage in some relatively expensive litigation."

The total number of title firms in the early 2010s was approximately 11,217, according to Dun & Bradstreet. Together these firms employed 65,549 people and generated annual revenues of $3.5 billion. The trend toward increasingly complex real estate transactions was expected to fuel an increased demand for practitioners. Training is typically acquired on the job and lasts between one and two months. Despite this seemingly short apprenticeship, the industry has been under pressure to improve standardization.

The American Land Title Association (ALTA) is the primary professional organization in the industry; it had nearly 3,000 members in 2010. ALTA members include title insurance agencies, title examiners, and attorneys. Based in Washington, D.C., ALTA and its members are also involved in numerous other aspects of the residential real estate business. They provide credit reports, escrow services, flood certifications, and relocation services.

Some of the leading title abstract offices in 2010, according to the ALTA, included Fidelity National Financial of Jacksonville, Florida, which issued 45 percent of all title insurance policies in the United States. First American Title Insurance Company of Santa Ana, California, had offices in all 50 states as well as 12 other countries. First American Title was the largest subsidiary of First American Financial (formerly The First American Corporation). Other leaders in the industry included Stewart Title Company and Old Republic National Title.

© COPYRIGHT 2018 The Gale Group, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. For permission to reuse this article, contact the Copyright Clearance Center.

News and information about Title Abstract Offices

Using the business lists in Site To Do Business.
Valuation Insights & Perspectives; January 1, 2006; 700+ words
...three businesses we selected for inclusion had codes of: 6331 (Fire, Marine and Casualty Insurance), 6541 (Title Abstract Offices) and 6162 (Mortgage Bankers and Loan Correspondents). As a note, if you are looking for a specific business...
Using the Business Lists in Site to Do Business
Valuation; January 1, 2006; 700+ words
...three businesses we selected for inclusion had codes of: 6351 (Fire, Marine and Casualty Insurance), 6541 (Title Abstract Offices) and 6162 (Mortgage Bankers and Loan Correspondents). As a note, if you are looking for a specific business...
BUSINESS LICENSES
The Spokesman-Review (Spokane, WA); May 15, 1994; 700+ words
...Auburn, Wash. Air Chem, E429 Third, Misc. retail stores. All Seasons Closings Inc., E33 Lincoln, title abstract offices. All Strong Construction, Mead. Alpine Air Purification System, W5816 Holyoke. Anderson Creations, S4116...
Commentary: Title Track: Abstracts of title are now taxable
Daily Record (Rochester, NY); August 9, 2010; 700+ words
...a significant effect on the abstract of title and title insurance industry.On July...determined previously that abstracts of title were not subject to taxation...divisions and county clerk's offices. Often the fee is for what...
Contract Award: Clay County Abstract & Title Wins Federal Contract for "Award US Government Leased Office Space"
US Fed News Service, Including US State News; March 14, 2016; 259 words
...awarded a $395,342.50 federal contract on Feb. 25 for "Award US Government Leased Office Space."Contractor Awardee: Clay County Abstract & Title Co. Inc., 121 Kidder Street # 104, Vermillion, SD, South Dakota 57069, United States...
Garden City-based Abstracts Inc. acquires Riverhead title agency
Long Island Business News; March 26, 2012; 232 words
...Garden City-based title insurance agency Abstracts Inc. has acquired Aquebogue Abstract in Riverhead...disclosed. Aquebogue Abstract founder Kenneth...in the Riverhead office that was first...staff as a part of Abstracts Inc. to continue...clients," said Abstracts owner Sal ...
Small-town guy charms title, abstract business.
Daily Oklahoman (Oklahoma City, OK); May 8, 2005; 700+ words
...helped prepare him for the title and abstract business, which is intimidating...is president of Warranty Title & Abstract Co., which has offices in El Reno and west Oklahoma...president of First American Title Insurance Co., one of the...
Title company office under investigation.(SHELBY COUNTY)(Kings Title & Abstract)(Brief article)
Indianapolis Business Journal; November 19, 2007; 360 words
...at the Shelbyville office of Kings Title & Abstract led the Indiana Department...of the company's offices. After receiving a...at the Shelbyville office. Atterholt also suspended...money" from Kings' title insurance escrow account...

Search all articles about Title Abstract Offices