Before diving into the history behind the Licensing and Certification Assessment Training [LCAT™] Series of Multi-State Study Manuals and Interactive Test CDs, we wanted to focus on the results and recommendations of the following significant industry studies:
2007 GAO Report On Actions Needed to Improve Oversight of the Title Industry
In its 2007 industry report, Title Insurance: Actions needed to Improve Oversight of the Title Industry and Better Protect Consumers, the GAO recommended that state regulators call for meaningful Agent/Agency capitalization requirements, meaningful industry prelicensing and continuing education, and greater oversight of Agent/Agency business practices.
May 2012 Ernst Title Industry Survey on Mortgage Fraud
In May 2012, Ernst Publishing Company released the results of a title
industry survey, revealing thoughts and perceptions held by industry
insiders regarding mortgage fraud. The survey touched nearly 9,000
industry participants, many of whom provided detailed answers.
About 40 percent of respondents felt that fraud in real estate
transactions had increased in the last year, while the
respondents were evenly divided on the topic of which type of fraud they
were most concerned about. Among the choices: Robo-signing, identity
theft, integrity of the record, fraud within the loan transaction, and
foreclosure fraud. Respondents felt that additional steps to combat
fraud would be to improve technology solutions, increase notary
responsibility, and further certifications for
title agents and loan officers.
June 2012 Demotech Report on Escrow Theft
On June 4, 2012, Demotech, Inc. released its report on Escrow Theft: Today’s Challenge in Title Insurance in which it concluded:
“States with stronger agent licensing requirements and stronger accounting oversight experienced fewer losses in large part, we believe, from reducing escrow theft. While we acknowledge the need for additional statistical information to segregate losses between “true” title insurance losses and losses resulting from escrow theft, we respectfully submit that the loss ratio observed in this study can reasonably be assumed to correspond with escrow theft loss. The conclusion that necessarily results is that the adoption of the NAIC Model Act, an equivalent regulation, or a regulation that is stronger than the NAIC Model Act will mitigate the risk of escrow theft. Specifically, adopting strong licensing requirements will set up a barrier of entry to the profession that ensures only those who are competent, responsible, and trustworthy enough to serve in the role of title agent will be admitted. In addition, enacting strong oversight of agents’ accounts and records will help regulators and insurers identify and prevent fraudulent activity.”
Passion Meets Purpose — A Quest For Meaningful Education
From the mid-80’s forward, The Koogler Group fostered a passion for developing and delivering quality education for the title insurance industry — from textbooks to classroom training, to seminars created for our National Lecture Series. Book sales, coupled with classroom and seminar attendance, told us we were on the right path.
Karen Koogler, CEO of The Koogler Group, first projected the trend toward meaningful industry education in the 90’s, when attendance of our Florida 40-Hour Title Agent Prelicensing Course increased from several hundred to more than 1200 attendees per year — with nearly two-thirds attending solely for the educational value of the course rather than for state licensure purposes.
Years later, when the GAO released its 2007 industry report recommending that state regulators call for meaningful industry prelicensing and continuing education, we began gearing up to deliver such courses throughout the country. However, our intentions were short-lived, as 2007 also marked the bursting of the housing bubble and meltdown of the mortgage market, all of which translated into tens of thousands of title agents losing their jobs as thousands of Main Street micro-agencies shuttered their doors. As was expected, the first thing companies cut in an economic downturn is education, which is also the last thing they pick up during economic recovery. Although the industry cycles every 8-10 years [a boom-bust-balance cycle], no one yet realized the negative impact nearly a decade of unparalleled levels of fraud — mortgage fraud, securities fraud, foreclosure fraud, foreclosure-rescue fraud, and short sale fraud — would have on the industry.
In November 2008 — after reading HUD’s RESPA Final Rule, and despite the staggering loss of industry personnel during the preceding two years — Karen had a vision of a national implementation program that would empower attendees to turn around and train others [coworkers and customers]. To that end, she wrote a 440 page RESPA Final Rule Study Manual, engaged a number of title insurers and state title associations to rent meeting space and pull together large groups of agents, and rallied The Koogler Group staffers to step up to the plate and help her support the industry by handling the logistics of one of the largest educational projects in which the company had ever engaged. In a span of less than nine months, Karen had personally delivered the full-day RESPA Final Rule Implementation Program to over 5,000 title agents, attorneys, closing agents, and loan originators throughout the country, with another 1,000 attending our 8-hour Building the Bridge Between the GFE and HUD-1 online program [which included another textbook that included additional chapters for mortgage lenders].
Following that Program, demand for meaningful industry education once again retracted and remained so until mid-2012. During that time, however, buoyed by the success of the RESPA Final Rule Program and already preparing for the CFPB’s 2013 release of its Integrative RESPA-TILA Final Rule — Karen realized that now was the time to help move the industry forward, as it rebuilds itself, by focusing on meaningful licensing and certification programs and products. When the CFPB later released its 2012-03 Bulletin, calling for supervised banks and nonbanks [which includes mortgage lenders] to increase oversight of regulatory compliance and risk management protocols of third party service providers [which includes title (closing) agents], we knew our educational efforts were on the right track.
Licensing and Certification Assessment Training [LCAT™] Series
From 2010 to 2013, The Koogler Group moved full-steam-ahead, developing a solid foundation of current, targeted, and meaningful industry education, upon which others — state regulators, state title associations, title insurers, agency owners and individual title agents — can build. Karen knew, if she built the “basic wheel” and made it available, industry-wide, that others could easily adopt it for their own specific uses. Throughout the development cycle, Karen has envisioned the LCAT™ SERIES as a plug-and-play partnering project for those interested in collaborating with The Koogler Group to develop their own state-specific [state title associations] or company-specific [title insurer] programs. The modular components of the LCAT™ SERIES provide unlimited flexibility in creating spin-off products and programs, without having to reinvent the basic wheel.
After writing 31 industry textbooks [since 1986] and teaching industry licensing, compliance, professional ethics, and job skills programs throughout the country for nearly three decades — collaborating with national, regional, and state associations and companies — Karen views the next 5 to 10 years as the most exciting time of her career. Our goal, at The Koogler Group, is to work collaboratively with state regulators, state title associations, and regional title insurers to protect consumers by promoting meaningful education throughout the industry, thereby preserving the presence of Main Street Title Agents throughout the country. While business may be global, real estate is local. Therefore, a strong local presence of title agents working on both sides of the industry — search/exam and settlement/escrow — not only serves consumers, but, also, contributes to the rebuilding of strong communities.
“The Strength of a Nation
derives from the Integrity of the Home,
and of Those who reside therein.”
Why The LCAT™ Series — And Why Now?
Every 8-10 years, the boom-bust-balance cycle of the housing and mortgage markets trickles down to impact the title insurance industry in two distinct ways. During boom periods — where transaction volume exceeds human capacity — oversight of title work and escrow procedures gets pushed to the back burner. This results, in an escalation of title claims and agent/agency defalcation, which reveals itself during bust periods. This time around, the boom-bust cycle was exacerbated by massive levels of fraud [most perpetrated by those outside the title insurance industry] which caused title claims and agent/agency defalcation to soar even higher.
The liability for title (closing) agents has never been greater. The Koogler Group has engaged in discussions with numerous state and federal regulators, state title associations, title insurers, title agents, and other industry professionals, in an attempt to encourage a public/private [regulator/industry] educational initiative that focuses on meaningful education and heightened requirements for those entering into the industry. In addition, we continue to emphasize the value of mandatory courses and comprehensive testing specifically targeted to closing agents and title examiners — whether through industry certification or state licensure.
The best time to institute new initiatives — including state-mandated or industry-driven requirements for meaningful prelicensing and certification education and testing — is when the industry is in a rebuilding phase. That time is now.
In addition to assisting those independently studying for state licensing or industry certification exams, the LCAT™ Series of Multi-State Study Manuals and Multi-State Test CDs provides meaningful educational which can be used for:
Click here to access the “Plug-and-Play” Partnership Program for State Title Associations and Title Insurers.