First American Financial Corporation, a provider of title, settlement and risk solutions for real estate transactions, has published a data-driven analysis of the vital role that the title insurance industry plays in protecting the smooth functioning of the real estate economy in the United States.
Authored by First American Chief Economist Mark Fleming, “What Is the Risk of Not Curating Property Ownership Records?“, the paper estimates that the title insurance industry’s work to maintain accurate and reliable property records mitigates $600 to $900 billion in risk exposure to home buyers, lenders and other participants in real estate transactions.
The work conducted by the title insurance industry, which includes aggregating and organizing disparate sources of data impacting real property, identifying and remediating risks, and helping resolve errors in the public record, is necessary to clearly and reliably trade property rights and ownership in a real estate transaction.
“The U.S. residential real estate market accounts for a significant share of the total economy, but it relies on a public good–reliable, accurate real property records–that the title insurance industry plays a critical, but largely misunderstood, role in maintaining. It is the industry’s efforts to mitigate title risk exposure that maintains the reliability and accuracy of property ownership records underpinning the real estate economy,” said Fleming. “When the price of maintaining a smooth-functioning real estate economy is just pennies on the risk-dollar, do we really want to jeopardize that and risk diminishing the economic benefits it provides?”
Highlights of “What Is the Risk of Not Curating Property Ownership Records?” include:
- Annually, prior to the pandemic, the title industry’s estimated pre-curative risk exposure ranged from $600 to $900 billion a year.
- During the boom in sales and mortgage refinancing in the pandemic total estimated industry risk exposure surpassed $1 trillion a year.
- The degradation over time of the public records, if not curated, will cause the marketability of title to become less clear and increase the burden of defending property rights in court.
- The price for curating the public record and insuring ownership rights relative to the total estimated risk exposure is small.
First American Financial Corporation provides data products to the title industry and other third parties; valuation products and services; mortgage subservicing; home warranty products; banking, trust and wealth management services; and other related products and services. With total revenue of $6.0 billion in 2023, the company offers its products and services directly and through its agents throughout the U.S. and abroad. In 2024, First American was named one of the “100 Best Companies to Work For” by Great Place to Work and Fortune Magazine for the ninth consecutive year, and named one of the 100 Best Workplaces for Innovators by Fast Company for the second consecutive year.
“What Is the Risk of Not Curating Property Ownership Records?” was written and compiled by Fleming, who serves as Chief Economist for First American. In his role, he leads an economics team responsible for analysis, commentary and forecasting trends in the real estate and mortgage markets. Fleming’s research expertise primarily includes real estate and urban economics, applied econometrics, and mortgage risk. As a trusted and influential voice with 20 years of experience in the mortgage and property information business, Fleming is frequently quoted by national news outlets and industry trade publications, such as The Wall Street Journal and New York Times, and he is a regular guest on a high-profile broadcast news channels, including CBS, CNBC, Fox Business News and NPR. Before joining First American, he developed insights and analytical products for CoreLogic, and property valuation models at Fannie Mae. Fleming graduated from the University of Maryland with a master of science and a doctorate in agricultural and resource economics and holds a bachelor of arts in economics from Swarthmore College.
Click here to access the white paper “What Is the Risk of Not Curating Property Ownership Records?“
