tsumani of defalcations? well, maybe not but there sure has been loads of them

I remember sitting down with a group of regulators a few years ago making an effort to help them understand this business.  One of my goals was getting them to embrace the concept that a title insurance agent handles millions of dollars with little or no oversight.  The most frustrating part of that effort was the assignment of regulatory authority and that the oversight for management of escrow accounts was somehow being divorced from the oversight of insurance issuance.  I remain unconvinced that we need new legislation to make that connection, however, as with any law its the interpretation by regulators and courts that matters and at that time they weren't yet fully getting the escrow account angle.  I left the meeting feeling at least somewhat satisfied that I had given them fair warning that they should expect a tsunami of defalcations as the mortgage crisis resolved.

Had to raise this subject today because my Google alerts fished up three defalcations.  Those that hit the news are the only ones we see.  Hard to say how many are resolved without indictments.  I guess it hasn't been a tsunami and for that I am thankful.  A tsunami might have taken out the whole industry including the good title agencies.  That's what happened to the good mortgage brokers.  They virtually lost their wholesale business in a tide that rocked their world.

I am certain that underwriters are being diligent in their oversight of agents.  We see that in the seminars.  The nods and winks have been replaced with hard statements about what is proper conduct.  It's all refreshing and I do feel good that we seem to be on the other side of the darkness.  We're back in the light.  ;)