DOWNTURN SILVER LINING?
Organizations that prepare ahead of time are better positioned to navigate a downturn than their competition. They will also be poised for faster growth coming out of the downturn as market conditions improve. The title insurance industry has entered the second year of what’s expected to be a continued decrease in origination volume. As an industry, this isn’t the first downturn. It won’t be the worst. But it will be a real challenge.
“The good news is that I’m already seeing title business owners innovating the way they do business and adapt,” said Aaron Davis, founder and CEO of Florida Agency Network. “More often than not, the title industry sees its biggest advances and innovations in the face of major change. I’d bet that, as the market stabilizes later in the year, we’ll start to see title firms starting to do things a little more efficiently or effectively, to their competitive advantage.”
Some of this will include the increased adoption of digital closings and remote online notarization, improved use of centralized or shared resources and better awareness and investment in maintaining technology and improved cybersecurity.
“I think you’ll see increased collaboration and even a re-examination of long-standard practices and models,” Davis said. “We will all be better off if we continue to ask the question, ‘Is there a better way to do this?’”
As title professionals assess what’s under the hood of their operations, another key question for the next year is what will happen with the economy and mortgage rates. Even though the economy appeared to catch its breath in the second half of 2022, Doug Duncan, Fannie Mae’s chief economist, still expects a mild recession this year.