Southern Title Insurance Corporation, a regional title underwriter based in Richmond, VA, announced that it would voluntarily suspend issuance of new title policies effective as of September 15, 2011 and will focus continuing efforts on the resolution of claims received on previously issued policies.
Despite a an influx of new agents, new market opportunities and a solid management team, Southern Title has continued to incur higher than normal claims arising from policies issued by now-cancelled agents in the years between 2005 and 2008. That situation, in conjunction with a substantial recent agent defalcation, made a suspension of operations the most prudent course of action.
The reason for the closure: a former Southern Title agent in Texas who embezzled escrow funds, according to Brad Dantic, general counsel for Southern Title’s parent company, ALPS.
â€œWe are working closely and voluntarily with the Virginia Bureau of Insurance to get our hands around what was an agent defalcation in the state of Texas that triggered substantial claims for Southern Title,â€ Dantic said.
So – higher claims and embezzlement. Bad combination.
I’ve had a couple conversations with folks about this and the consensus so far is this:
– There are still options for buyers who are purchasing homes (and therefore title insurance)
– Other title insurance companies stand to benefit from Southern Title’s closure
– The real estate market is much more than solely “real estate”
– This tangentially tracks with the trends I’ve heard that there are more title insurance claims now than almost ever before.
I’m sure there’s more to the story, but that’s a story someone else will have to write. I’m off to meet a new client.