Growing up in a traditionally nomadic corporate family, Charlie Foster changed home towns at two-year intervals. As his father moved to different assignments for DuPont throughout his early life, Charlie enjoyed the sense of adventure that accompanied relocating to an impressive array of states from coast to coast. This lifestyle helped produce a goal-oriented youngster who was familiar with tackling new challenges, which are qualitities that have continued to serve him well during a successful business career.
With the title industry at a defining moment, Charlie’s able leadership will be called upon frequently during his term as ALTA®’s 1999-2000 president. The LandAmerica Financial Group chairman and CEO moves to the top slot at the Association helm facing an agenda of issues with critical implications for the title business, such as:
Accelerating the impact of these and other challenges is a keenly competitive marketplace, where title companies face unrelenting demands to maintain their hard-won superiority in financial assurance and information services for real estate investors, while offering superlative personal service.
Narrowing Demand, Expanding Services
The new ALTA® president maintains that redefinition of the industry has been characterized by a narrowing of demand for the title product by customers who are also calling for an expanded package of services. This has been especially prominent on the mortgage origination side. An impressive industry response continues through the harnessing of electronic commerce, which is especially visible as major title underwriters unveil connectivity, Internet presence, and the availability of one-stop shopping.
Although he rates as aggressive the title company response to high-volume lender demands for faster turnaround on title reports and one-stop availability for a variety of information services, Charlie considers this initiative embryonic. While major title underwriters now offer delivery of multiple services to volume customers through a single electronic connection, he finds that most customers remain frustrated by the fragmented nature of the title business and the time required for service in some parts of the country. This clearly indicates there is much more to be done by title companies.
Although demand for "faster-better-cheaper" real estate information service emerged from the refinancing side of the business and has been successfully met with no decrease in quality (including accuracy, as claims data show) the full impact remains to be determined since the buy-side has just begun to press for similar performance. Industry activities such as workflow process design have shown that technology is enabling consolidation of work steps without adverse effects on title examination and underwriting. The steps remain, but there are fewer handoffs from one desk to another as the process gains speed. Gains in productivity by the industry have accompanied the surge in refinancing orders experienced during recent years, the ALTA® president says. But the result did not emerge from electronic connectivity or new software. Rather, the accomplishment is largely attributed to revamping the workflow process and reducing the number of forms needed. The technology is there for connectivity, he adds, and single seat production of an entire title order is within reach where the title plant is digitized. While on-line, digitized information can make single-seat handling possible for all orders coming into the plant, this capability exists only in a few locations across the nation.
Perhaps the most severe test during a technology surge comes as interest rates trend upward and title business drops, the new ALTA® president observes. Conflicts emerge between:
1) necessary cost and staff reductions during a period of decline in title orders; and
2) sustaining the efforts to build and implement new Internet (and Intranet) based technology platforms, which are capital and people intensive projects.
In Charlie’s view, these counter pressures may reshape the industry paradigm, since continued rapid growth in the size and scope of technology investment would likely bring more title underwriter consolidations. Yet, intense competition may prove to be the ultimate wild card. High volume title customers are expected to continue placing their business with the two or three title underwriters who can best provide a variety of real estate information services from a single location.
Controlled Business Impact
Another powerful force continuing to impact the industry is the influence of controlled business operations " particularly lenders or real estate brokers desiring to own or joint venture title insurance activity. As Charlie puts it, numerous title agents look to sell their businesses to controlled business enterprises. Managers of title underwriter branch offices look to become controlled business agents. Other agents feel betrayed when underwriters accommodate lenders and brokers wishing to become part of the action. What transpires is considerably different, depending on the part of the country. Those concerned are scrambling to make new rules, he notes, or to understand the rules just made.
Adding to the complexity is arrival of banks on the title insurance playing field, which ALTA® is battling to keep level through support of financial services reform legislation in Congress. As Charlie points out, national banks, state chartered banks, and community banks are already in the business. Balancing the marketplace means preventing banks from engaging in activity that title agents are not allowed to undertake. Some agents, he believes, may welcome an opportunity to align with banks. And, underwriters who can serve as one-stop service providers or vendor management facilities for lenders will encounter additional opportunities.
As he begins his presidential term, Charlie believes that the ongoing viability of the industry depends on the realization that great opportunity remains for title companies as their customers seek to further expedite the real estate closing process. Retaining business expertise, information service capability, and financial assurance"and wrapping that expertise in a personal service dimension"are critical in successfully responding to the commodity transformation now being experienced in the market, he says. Packaging and delivering title company capability accordingly will mean a great deal in determining the outcome. Are title managers ready for the demands of a rapidly changing industry in the new century? From mag cards commonly in use two decades ago, Charlie finds the title industry has made astounding changes through technology during the past five years. But many of the same work flow steps remain in title production and closing. Charlie predicts the industry will be anything but static over the next 20 years, as title companies and their customers relentlessly pursue "electronic fulfillment""the capability to originate, process, and close a loan electronically without paper files or physical meetings.
Twenty years from now, Charlie won’t be surprised to see the title industry using a single data base for 80 percent of its action. And title companies competing in the marketplace may
well have portfolios of enterprises linked to their central function of providing real estate information services.
While Charlie sees the business fundamentals remaining similar, he thinks those in title management face dramatic differences in necessary technological skill sets. Any manager unable to handle his or her own word processing, spreadsheets, PowerPoint"and whatever comes next in the explosion of technology"will face serious disadvantages. The next generation of management coming out of school has the necessary technological skills and knows how to assimilate new techniques, adds the ALTA® president, who serves as a trustee of the Virginia Association of Independent Colleges and the Virginia Commonwealth University Foundation. As Charlie puts it, the manager lacking these important skill sets may wind up wondering what has happened to his or her career.
ALTA® in the Millennium
And the outlook for ALTA® in the New Millennium? In Charlie’s view, what happens will be particularly influenced by title industry consolidations and the emergence of controlled business operations. Funding for activities of the Association from large underwriter dues will be diminished in the wake of consolidations. He expects more attention to focus on fee-based ALTA® products and services.
A major element in the future of the national Association, Charlie adds, will be convincing more agents who presently are members of only regional or state title organizations that they also have an important stake in becoming active participants within ALTA®. The ALTA® president says expanding the Association agency base also calls for giving serious consideration to the need for attracting into membership new constituencies involved in real estate information services"even if the result is an appropriate renaming of the organization.
As the New Millennium unfolds, Charlie is calling for an initial emphasis on strategic planning to facilitate expanding the boundaries of ALTA®. He visualizes building momentum through strengthening and extending already successful ALTA® initiatives such as:
Leisure Moments Infrequent
When Charlie and his wife Betty do have some downtime, they can often be found at their beachfront retreat in South Carolina " Charlie on a nearby golf course and Betty walking near the surf. They met while both were employed by IBM in Richmond, VA. Another popular pursuit in recent years " catching up with daughters Elizabeth, 24, and Sarah, 22, during their various adventures, which has taken the couple to England, Alaska and other widely located destinations in the United States. With personal travel, company travel, and various journeys to attractive places on behalf of ALTA®, Charlie does not feel a strong need for additional vacation time. In addition to golf, the association president is a former marathon participant and still works out regularly as a runner (or, as he puts it, make that jogger " make that staggerer.) He also likes to spend time reading and surfing the Internet.
Support for Presidential Iniatives
ALTA®’s New Millenium president is clearly a man of insight, intellect, and initiative. As we come to know him better over the next twelve months, we will doubtless begin to see the impact of these qualitites on the course of ALTA® and the industry itself. ALTA® staff, membership, and volunteer leaders look forward to working with him and tackling the issues of the coming year. Welcome Aboard, Charlie!