Insider Interview
Homegrown title expert addresses new law, housing market and his company
David A. Townsend, president and CEO of Farmers National Title Insurance Co. in Columbia, was named this month to the state’s Title Insurance Advisory Committee. The 12 committee members will advise Missouri’s Department of Insurance on how to implement and administer a new insurance reform law. Senate Bill 66, signed by Gov. Matt Blunt on July 13, is designed to protect consumers from improper title insurance practices. It enhances consumer protection for homebuyers and closes loopholes affected by insurance and annuity sales.
Townsend, a graduate of Hickman High School and the University of Missouri Law School, started Farmers National Title Insurance (1207 W. Broadway, www.farmerstitle.com, 442-3351) in 2006. The company, which has four employees in Columbia and 55 agents in more than 90 locations, offers title insurance and related services, including legal, underwriting, education, escrow consulting and lender relations. Townsend could have located the business anywhere in the region but decided to move back to Columbia in 2005 to begin licensing the company.
Q: What kind of problems with the title insurance industry does this new law attempt to solve?
A: The new law does not address problems as much as it provides a framework of the regulation of the industry. Many of the perceived problems were the result of not understanding how the title insurance industry works. The new law is designed to provide consumers with more information in regard to title services. It is also designed to increase the supervision of escrow policies and procedures. I feel that the legislation is a good first step to creating an environment where consumers and title companies can work together successfully. Many homebuyers have no idea how hard title and escrow companies work to make sure their closing goes smoothly. The new law increases the oversight by the Department of Insurance over escrow and title matters. Farmers National Title Insurance Co. is ahead of the curve in that we have already implemented many of the consumer benefit requirements under the law.
Q: What are some of the challenges facing the committee members as you craft insurance regulations to implement SB66?
A: The members of the committee are a very diverse and accomplished group. I think the main challenge is educating the members of the committee that are not in the title industry on the intricacies of the title market and how companies operate. Without a solid understanding of how title companies work, it would be difficult to implement effective policies and procedures to benefit the consumer. I feel our first task will be to establish goals for developing solutions within the new law. The Title Insurance Advisory Committee is made up of very talented individuals that represent different participants in the real estate transaction. I am looking forward to creating a title insurance environment in Missouri where everyone benefits.
Q: On the wider issue, have you noticed a slump in the local residential and commercial real estate markets?
A: As far as the local market goes, it does seem that there is a greater amount of inventory available at this time. To me, that means it is a great time to buy a house. I think we are very fortunate in the Midwest in that our prices are extremely reasonable. Statewide, certain areas have noticed fewer residential orders than a year ago, but we have also had record sales the last few years. Commercial property seems to be in an upswing right now. Many of our title agents have stated that their commercial orders are up this year. As far as a slump goes, I do not feel that the market is something to be concerned about at this time. Interest rates are still good. Many can remember rates of 10 to 15 percent. We should feel fortunate mortgage rates are still good, that we live in Columbia and that our town is a great draw to residents and businesses. We should focus on growing our community so that we do not experience slumps.
Q: Regarding your own company, we understand that Farmers National Title has grown significantly and will expand to other states in the near future. Could you elaborate on your growth and expansion plans?
A: Farmers National Title Insurance Co. is Missouri’s only Missouri-headquartered domestic title insurance underwriter. Nationally, title insurance is dominated by five major companies. These companies operate both agency operations and direct operations and, as a result, compete directly with their agents. Farmers National Title Insurance Co. is an agent only company. Our policies are sold through locally owned businesses throughout the state. We provide the highest level of agent support and are focused on their success. As a result, we have experienced unprecedented growth. Farmers National Title Insurance Co. has insured over $1.3 billon in property since we were founded. We have experienced this growth as a result of our quality agents in Missouri. Farmers National Title Insurance Co. also has designed and implemented a patent pending Agency Accounting system that is state of the art. It is a paperless, real-time system that ensures flawless accounting. Our agents benefit from increased time savings and unparalleled accuracy in generating policies of title insurance with Farmers National Title Insurance Co., which results in greater service to the consumer. Our use of superior technology and our focus on our agents have propelled us to where we are today. We are fortunate to have a very experienced board of directors and shareholders. The management staff and board work as a team to achieve our goals.
Farmers National Title Insurance Co. is currently in the process of expanding into additional states. We will add an additional state this year and three more in 2008. Farmers National Title Insurance Co. will replicate our business plan in each state we enter. Our focus will be on the independent title agent and providing them with the tools they need to succeed.