The Risk of Not Curating Property Ownership Records

Homeownership is a central tenet of the “American Dream” and property ownership is the largest source of wealth for all but the highest income families in the United States. Furthermore, the economic activity associated with the U.S. residential real estate market accounts for a significant share of the total economy. The strong emphasis in this country on property rights enables the real estate economy to function effectively and transparently, but it relies on a public good – reliable, accurate, real property records.

Title insurers play a critical, but largely misunderstood role in the real estate industry. It is title professional’s efforts to mitigate title risk exposure the reliability and accuracy of the property ownership records underpinning the real estate economy. This analysis attempts to estimate that value and shows that there is significant risk exposure to the clear and undisputed ownership of property that costs relatively little to curate pre-transaction.

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?

• 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 the burden of defending property rights in court to increase.
• The price for curating the public record and insuring ownership rights relative to the total estimated risk exposure is small.

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