Cool. I know a few of you. Most of you, I don’t. So I’m going to introduce myself. My name is Tom Casill, the president, chief executive officer, founder at MacGregor Abstract. I’m going to tell you a little bit about myself. I’m going to tell you a little bit about title insurance companies in general, and then I’m going to tell you about a closing that we just did for somebody that’s going to help you understand why different types of title insurance companies might be more appropriate for what you’re doing. 

I was born and raised actually right here in Flora Park. I started title insurance in 1976. That’s right. I know, I don’t look that old, do I?  Thank you. Thank you. That’s OK. I’ll help you. I’ll help you out. I went to work for First American title at the time, and I left them 10 years later. So I got my training inside the title insurance company that actually pays the claims. Not that it’s important for you to know how the claims get paid, but it’s important to understand the mindset of how they handle their transactions to help them avoid and still do enough closings that they’re making some money by doing some closing.  That having been said, I’m an inside guy, I’m a title guy, I’m kind of a technician. I sit at the phone, I talk to people on the phone all day long. As opposed to that, there are a lot of my competitors that are professional salespeople, and they’re very good at what they do. And sometimes I look and I see what they do, and I’m kind of envious because they do it well and they get a lot of business because they’re good salespeople.

But unfortunately, if they are good salespeople, they either don’t have someone like me or they’re paying a big salary to someone like me to sit there and do what it is that I do. So there are companies that are run by salespeople that at some do know what they do, but some are so busy that they’re not available on the phone. We have oh, just just let me throw this in. So what I do is I hire salespeople and one of the things I did earlier this year, I hired a real estate investor as a salesperson. And this was very good for me because the real estate investor came on, on staff, on salary, and they already had a handful of attorneys that they use. They already had a handful of bankers that they use, a handful of realtors, and it was a really easy thing for them to step into. And that’s what led to the story I’m going to give you in a few minutes. But before I get into the story, I am still hiring salespeople of that ilk. So if you know people that might be looking to do other things, get other income, real estate investment wise, or real estate professional wise we’re into those conversations. So, this salesperson being an investor speaks to a lot of their investors.  And investors, a lot of times, like to take control of things, and sometimes they like to delegate it to their attorneys or whomever. 

And there was a short sale.  Now you guys, how many realtors do we have? You guys are realtors here and you’re familiar with short sales and generally how they work. I’m learning about short sales. After that was good. I got to get your card before I leave. There’s a short sale going on and we’ve been doing short sales for, you know, since 2008 that got very popular and we have some underwriting guidelines that we have to go by. And the big piece of paper is the short sale approval. The short sale pay off bank is agreeing to take less money than they do, but because they’re in that spot, they get to write the terms on what’s going to happen. And if you’re familiar, I’m going to tell you what happened. There was a short sale. There was a junior lien. I don’t remember if it was a mortgage or if it was a judgment. And the short sale pay off bank was allowing, I think, $8,000 to pay off the junior lien. It was much larger than that and the dream the land holder was not agreeable. They wanted $30,000. The buyer was agreeable to pay the extra money to come in. But because the short sale pay off approval letter wouldn’t address that other than the $8,000. Whoever did this was going to do it in violation of the short sale payoff letter, which puts the pay off bank. If I say pay off too much, which puts the payoff bank in a place where they could void the transaction even after they get to pay off. It’s a risky thing.

So there has been a lot of communication and this was not my deal. I didn’t bring this deal home. There was a lot of communication between the parties and the payoff bank kind of agreed in an email chain that they would allow the borrower to come in and put extra money in, but they wouldn’t change their payoff approval letter. And the people that were doing the title on this, but they choked on it. They, my competitor is if I told you his name, half of you probably know who it is or not. Anthony, who was a very competent man, very busy man. He’s never in the office. He’s always out shaking hands and doing the sales thing. And so that means that he’s leaving the people in the office to make the business decisions. And I choked on it and because my investor salesperson had already spoken to this investor that was buying his property. They knew to call us and they put the deal in front of us. And we looked at it and I had comfort because I had an email chain from the bank authorizing the extra money going and paying off the junior lien, so I’m good, I’m good.

 Ok, so now this transaction is a twofer. I’m going to have two examples out of this one transaction. But that’s the difference between dealing with the company where somebody is running the show. That’s a title guy as opposed to somebody that’s busy doing a lot of other things. So we go through the process. They missed some things. They were sloppy and they missed some things.  We raised them and cured them. We get to the closing and something comes up that has never come up before.

They have a lender, the buyer has a lender coming in and I get a call at about five o’clock from the lender’s attorney saying that he’s uncomfortable with the wire instructions on the payoff. And I said, “What do you mean you’re uncomfortable with them?” So I had the payoff letter and I don’t remember what it was, but he was looking at them and he saw some ambiguities. And he wanted to know beyond doubt that when he sets that wire and it’s hundreds of thousands of dollars, he wants to know that it’s going to the right place, that it’s going to be credited to the right account. And here it is, like a Friday at five o’clock. What are we going to do? He doesn’t want to jump to wire the money. So what he suggests is that he wires me the money at five o’clock on a Friday. And of course, that’s not going to happen until Monday.

So I’m looking at this and what am I going to do? What am I going to do wiring the money to questionable wiring instructions? Now, if I had left my staff to do that, they never would have taken it. I have an attorney on staff and he would not do that because he understood the risks without my approval. But because I was there, I was able to look at it, measure the thing I happen to know the attorneys involved. I’ve been doing this well. I don’t know how many years I’m doing this now, but because I knew the attorneys, I talked to them, I knew that they were going to be around. I knew the shuttle was going to be around. There are privacy issues that pay off. Bank won’t talk to me without the seller and their borrower there. I mean, there’s a lot of strings attached to this, but because I was able to put everything together, the loans The short end of this is that we did close. We did get the payoff out the following Tuesday or the following Wednesday. They closed, the buyer came in and buyers an investor. He’s happy, he’s fixing up the thing. The main point is, if you’ve got to deal with the title company, there’s differences.

Some people don’t have transactions like that and they don’t care. Some people would rather be wined and dined and taken out to the baseball game and steak dinners, all of that stuff. Technically, right now, you’re not allowed to do with regulations being the way they are. I will say that they’re not being done, but I say that they’re not allowed to be doing it. Now I could get up here and I could tell you all I know about title insurance. I bore you to death and I probably won’t be here for a week because I’ve been doing it for so long. But I just wanted to bring some illustration to the different types of companies that are out there. There’s the title guy and there’s the sales guy that a snake on the sales guys bad. Like I said, they do more business than I do sometimes because I’m not that good at the sales. Other than that, that’s really what I wanted to convey is that if you need to know something about title insurance, if you know that you know where to come to get your answers, that’s all I got.

MacGregor Abstract Corporation