By Ellen Schweppe
The title insurance industry will flourish on its ability to adapt to customer needs in a changing marketplace, according to incoming ALTA® President Rande Yeager.
Sometimes that means you have to shake things up a bit.
When Yeager became president of Old Republic Title Insurance Group in Minneapolis, MN., in 2002, he decided to change the company’s annual report from a conservative format focusing on financial results, to a more cutting-edge design incorporating the company’s marketing campaign.
The result was national award-winning annual reports for two years running that reflect the company’s reputation as a relationship builder and service innovator as well as its financial strength. “We had done a more traditional report in the past, but we decided to make it something that people will actually read,” said Yeager.
Focusing on customers and building relationships are keys to success for the title insurance industry, Yeager said. “This is a relationship business, and germane to all of our efforts are the relationships we have with all of our agents and customers,” he said.
Also important is creating a business, legislative, and regulatory environment that encourages profitable, honest growth and adaptability to move with changing market conditions.
“We have to be able to accommodate the needs of the changing real estate industry, whether it’s through legislative initiatives or customer-driven products and services,” he said. “We need to be able to change quickly, positively, and honestly.”
Success for Yeager is a collaborative effort, whether it’s the success of the company he runs or the industry organization he will lead during the coming year.
“My business philosophy is to provide an environment that encourages people to do their best and to realize their potential, and to be supportive of their efforts to advance the corporation’s and the industry’s goals,” he said. “It’s a team effort.”
Title Career by Default
Yeager, like many in the industry, did not consciously pursue a title insurance career. Armed with a bachelor’s degree in psychology from Westminster College in Fulton, MO, and a master’s in business administration from Regis University in Denver, CO, he spent the early years of his career as a mortgage banker.
While working at a savings and loan in Denver, Yeager made friends with the local Ticor Title Insurance representative, who encouraged Yeager to take over his post when he was transferred to another state.
“So I got into it by default,” Yeager said. “I don’t know many people who didn’t have families in the business who set out to get into title insurance. It’s something that just sort of happens. People always say that you don’t pick it; it picks you. That’s my story, too.”
After 12 years at Ticor’s Denver operation, Yeager accepted a transfer to a larger division in Dallas, TX. When Richard Cecchettini, then about to become president of Minnesota Title and now retired chief executive officer of Old Republic Title Insurance Group, heard about Yeager’s move, he made an offer to his former Ticor colleague.
“We had stayed in touch after Dick left Ticor to work at Minnesota,” Yeager said. “He said, ‘If you’re going to move your family, why not consider moving to Minnesota instead of Dallas?’”
Yeager did. “I had a lot of confidence in Dick’s abilities and was familiar with his management style, so I was comfortable taking the position in Minnesota even though it was a much smaller company,” he said. “I saw an opportunity to help a smaller national company grow.”
Minnesota Title eventually changed its name to Old Republic Title to reflect its association with parent corporation Old Republic International, and Yeager moved up in the organization, becoming executive vice president in 2001, president and chief operating officer in 2002, and president and chief executive officer in 2003.
Operating in every state except Iowa, Old Republic Title Insurance Group is part of Old Republic International Corporation, a Fortune 500 company that also has general, life, and mortgage insurance groups. Old Republic Title provides a complete line of residential and commercial title insurance products and real estate transfer services through its national network of branch offices, subsidiaries, and independent agents.
Yeager is proud that Old Republic Title has been able to maintain its independence during an era of mergers and acquisitions in the title insurance industry.
“We’re one of five remaining major underwriters,” he said. “We’ve built confidence within our parent corporation that title insurance provides value to the shareholder, and therefore they have supported our efforts in growth and made it a place where we can do the kinds of things we need to do to maintain our independence.”
Yeager credits the company’s growth to a strong management team and a spirit of entrepreneurship among employees. “My primary strategy has been to provide a business environment that encourages profitable, honest growth and that offers rewarding careers for employees who are committed to the principles we’ve established as a management team,” he said. “And let everything else fall as it may.”
Internal and External Challenges
Yeager has witnessed many changes during his nearly three decades in the title insurance industry, including growth in merger activity, adoption of technologies to enhance industry operations, and development of new products and services to meet changing markets.
One of the greatest internal challenges he sees for title companies today is assuring that all of their business activities remain both legal and aboveboard. “Title companies sometimes face competitive pressures to cross over that line between what’s right and wrong and legal and illegal,” he said. “That’s always a difficult decision when you stand to lose business because a competitor will acquiesce to customer pressure to do something that may be in the gray area.”
In recent years, insurance regulators in several states have questioned the legality of some affiliated business arrangements between title companies and other organizations that provide services in real estate transactions. In an era when Enron and WorldCom dominate business headlines and corporate behavior in every industry is under scrutiny, Yeager sees the issue for title insurers as not just the legality of their actions in the marketplace but the perception of those actions by regulators, lawmakers, and the public.
“We have to be aware that sometimes our quest for market share or profitability can leave us in a position that may cause people to look negatively on our actions as an industry or as companies,” he said. “I think we have to guard against that. It’s something that all companies—whether they’re title insurance companies or any other corporation in America—have to be concerned about nowadays.”
Externally, Yeager cites ongoing efforts to reform the Real Estate Settlement Procedures Act, which regulates how consumers buy and encumber homes, as a key challenge facing the title insurance industry. “I think RESPA reform is going to be a slow process, very deliberate, but one that may in the end provide some necessary reforms to a statute that has been around for 30 years,” he said.
In 2004, U.S. Housing and Urban Development Secretary Alphonso Jackson withdrew the agency’s final rule changing RESPA regulations after members of Congress and many real estate, consumer, and lender groups expressed concerns about it. Earlier this year, Jackson revived HUD’s effort to revise RESPA and invited industry and consumer groups to a series of roundtable discussions on what reform should entail.
At a July roundtable, ALTA® representatives outlined the principles the association believes should guide RESPA reform. They include giving market-based approaches an opportunity to work before imposing regulatory directives, allowing consumers maximum freedom to select settlement service providers, and recognizing the important role small businesses play in the real estate industry.
“I think Secretary Jackson is establishing a good relationship with the industry that can only work to benefit everybody who’s involved in the process,” Yeager said.
Another external challenge for the industry is the proposed State Modernization and Regulatory Transparency, or SMART, Act, federal legislation that intends to facilitate a major overhaul of the state-based insurance regulatory system and eliminate conflicting state laws and regulations.
ALTA® continues to oppose standardizing state-based regulation of the title insurance industry under proposals such as the SMART Act. Of all the lines of insurance, none is as closely linked to state and local conditions as title insurance. Laws and regulations governing title insurance vary significantly from state to state, reflecting the great variety of state and local real estate practices.
“I think the industry and ALTA® have done a good job of educating lawmakers who are in a position to include or exclude us from all or portions of the SMART Act,” said Yeager. “We’ll continue to work to encourage lawmakers to exempt us from the Act.”
“And that’s not all that will be on our plate this year,” according to Yeager. “GSE Reform, Mortgage Impairment issues, Uniform Closing Instructions, and Interest on Business Checking are a few of the other issues that will consume our attention in the short run.”
Getting ALTA® Members Involved
RESPA and GSE reform, mortgage impairment challenges, and the SMART proposal are the industry issues most likely to require the attention of ALTA® members and staff during the coming year, Yeager said, while the title industry’s state organizations will continue to face issues such as regulatory changes and challenges to affiliated business arrangements.
“We’re a highly regulated industry, so the most important thing we can do as an association is provide for fair and effective legislation and regulation benefiting all companies,” he said.
The ALTA® board has also pledged to continue its support of the Public Awareness Campaign, a multiyear effort aimed at generating awareness and understanding of the title industry’s vital role in the real estate process. A key element of the campaign is the Title Industry Marketing Kit, available from ALTA®, that is designed to help title insurance professionals get the industry value message out to consumers and others involved in the real estate process.
“The industry can’t afford a ‘Got Milk?’ kind of campaign, so we’re going to have to do what we can with the resources we have available for public awareness and education,” Yeager said. “It will be a never ending initiative.”
During his year as ALTA® president, Yeager plans to focus on building membership and getting members more involved in association activities. He’ll do it by working closely with the ALTA® board and staff, and making the rounds of state associations to explain ALTA®’s goals and convince his colleagues that working for the good of the industry is the best thing they can do for their livelihoods.
“No one person can make a huge difference, other than in trying to get other people to participate in the efforts of the association,” he said. “It has to be a team effort. Communicating with people and helping them understand the urgency of contributing their personal efforts to the association’s goals are primary to what I’d like to accomplish over the next year.”
He ticks off ways members can get involved. “They can join a committee. They can contribute financially. They can contribute their time to contacting legislators and regulators to help us provide for legislation that’s beneficial to the industry,” he said.
Making those types of efforts—joining a committee, participating in lobbying initiatives, carrying the ALTA® message to state title groups—are what brought Yeager to the ALTA® presidency. His first ALTA® involvement was on the Technology Committee. Eventually, he was tapped to join the ALTA® board and served as chair of the Title Insurance Underwriters Section.
“I got involved in ALTA® because I wanted to contribute something to the industry,” he said. “Not only is it an honor, it is a way to effect change in more than just the environment that I’m working in.”
Providing a Valuable Service
Looking back over his three-decade career, Yeager is satisfied he made the right decision when he switched from mortgage banking to title insurance. “If I was given an opportunity to pick another career at this point, I wouldn’t do anything different,” he said.
Despite the challenges the industry faces, he continues to believe it is a good industry to be in, citing its contribution to closing a record $3.8 trillion in mortgage loans in 2003.
“There has never been a time while I’ve been in this industry that companies didn’t have problems and that everything was absolutely perfect. There has never been a time when the money just rolled in and there were no headaches,” Yeager said. “When we experience problems in our industry, it may seem as if it’s tougher on us than on any other industry, but it’s only because it’s the industry we’re personally involved in. Problems are just bumps in the road.”
Yeager focuses on the positives he sees in the industry’s future: It will continue to refine its products and services to reflect the changing marketplace. It will continue to harness new technologies that will make the real estate process simpler, cheaper, more efficient, and more accurate. It will continue to make progress.
“There’s always going to be a need for title insurance. There’s always going to be a need for someone to close loans and real estate transactions,” he said. “We provide a valuable service. We’re an integral part of the real estate transfer process and always will be.”
Ellen Schweppe is president of Ellen Schweppe Company, LLC, an editorial services firm serving the financial services and other industries. She can be reached at email@example.com or (703) 435-5621.