Growing Lender Profits Through Diversification into Title Insurance–TitleEase’s Joseph D’Urso
Joseph D’Urso is CEO and Co-Founder of TitleEase LLC and Lincoln Abstract & Settlement Services, LLC. He has 35 years of experience in financial services and the mortgage industry. Lincoln Abstract offers a full range of title and settlement services nationwide and TitleEase is an innovative franchisor in the real estate title and settlement services sector.
It’s not breaking news that the mortgage market has been through the wringer the past two years. After interest rates jumped from historic lows to over 7% and put a freeze on refinancing and home purchases, many lenders saw revenues drop by half. The result has been massive staff cuts and brutal operational restructuring.
However, as someone who’s been in the financial trenches from Wall Street to the mortgage industry, I’ve learned one fundamental truth: tough markets create incredible opportunities for those willing to think differently.
Today, the industry is split into two factions. There are lenders who are waiting and hoping for lower rates to turn things around, and there are lenders who are taking action by looking for new ways to maintain or boost profitability. One of those ways is by branching out to ancillary businesses to create additional revenue streams.
Why Title Insurance?
As ancillary businesses go, title insurance and other closing services are particularly appealing right now for a couple of reasons. First, it’s a natural fit with your mortgage business, since you’re already dealing with title work on every loan. Second, it gives you greater control over the transaction process, which means better service for your customers.
Another factor to consider: While market consolidation in the title industry has reduced competition, it also created openings for lenders to establish a foothold. Offering title insurance enables lenders to deepen customer relationships, particularly in a slower market where each client interaction carries greater significance. By integrating title insurance into their services, lenders can provide a more comprehensive and seamless customer experience, which fosters loyalty and strengthens their brand.
Title insurance also improves long-term enterprise value. By diversifying revenue streams, lenders can expand beyond traditional mortgage activities and create a more stable financial foundation. This diversification not only enhances a company’s worth but also positions it for sustained growth in a competitive industry.
Two Main Paths
For lenders looking to enter the title insurance market, there are two main paths forward. The first is a joint venture (JV) with an existing title provider. Joint ventures present a complex landscape of potential approaches. JVs come in many different forms, ranging from simple arrangements to more intricate partnerships. Some JV models are legally compliant and structured with rigorous oversight, while others may fall short of regulatory standards.
The primary approach involves partnering with an existing title provider through a JV. However, it’s crucial to recognize that legal and compliant JVs require careful structuring, including seeding the venture with sufficient capital—similar to the requirements for establishing a standalone title company. Success in this arena hinges on identifying a partner with complementary skills, aligned vision and a commitment to regulatory compliance.
The other alternative is franchising, in which the lender runs their own title business and the franchisor offers full middle and back office support. The benefits of the franchise model include shared operational risks, combined expertise, access to established networks and minimal initial capital investment. With the right partner, this approach can enable lenders to leverage a proven title business model, marketing support, significant shared revenue, training programs and established technology platforms.
Each strategy offers distinct opportunities for lenders looking to expand into the title market. But which is best?
Joint Ventures vs. Franchising
Joint ventures give lenders a relatively easy way to enter the title business by allowing them to access existing systems. By partnering with an established title company, a lender can tap into the company’s operational infrastructure, compliance frameworks, underwriter relationships, and technology, which simplifies the initial setup.
However, joint ventures come with significant trade-offs. One of them is profit-sharing, which means lenders must forfeit a significant portion of potential earnings. Another is that both parties share decision-making responsibilities, which can limit a lender’s strategic vision, operational flexibility and brand development. The lender lacks oversight of their business partner’s financial management, which consequently limits their ability to influence the profit distribution.
Franchising, on the other hand, is significantly different. Under this model, lenders own the title business and have complete operational control and greater profit retention. Yet they still benefit from a proven business model, comprehensive training programs, advanced marketing support, and established compliance frameworks.
While the initial investment may be higher, franchising offers a pathway to build a potentially valuable business asset that can be expanded or potentially sold in the future. It also enables lenders to maintain entrepreneurial flexibility. A lender with its own title franchise business can more easily adapt its business to local market conditions and develop deeper customer relationships. This approach is particularly valuable in a slower market, where every client relationship becomes critical to long-term success.
Launching a title business doesn’t take nearly as long as many think, either. The franchise model can have a lender up and running in two to three months, benefiting from comprehensive support that streamlines the startup process. The franchise model offers a turnkey solution, enabling entrepreneurs to rapidly enter the title industry with guidance and resources tailored to their specific timeline and goals.
For lenders considering the title business, the decision between a joint venture and franchising ultimately depends on their individual goals, risk tolerance, and strategic vision. Lenders must carefully evaluate their specific circumstances, market position, and long-term objectives.
What’s Needed to Succeed
Contrary to popular belief, you don’t need decades of real estate experience to succeed in the title business. The key skills are more about attitude and adaptability. This includes providing customer service that actually feels like service, the ability to build genuine relationships, tech-savviness, and being persistent through market challenges.
It also doesn’t hurt to have a solid understanding of compliance basics and regulatory issues involved with launching a title business. That said, these requirements are often more straightforward than they appear. RESPA (Real Estate Settlement Procedures Act) might sound intimidating, but it’s really about ensuring transparency and ethical practices. A good partner will help ensure you’re compliant with RESPA in terms of a new title business.
Looking Ahead
Because the mortgage business keeps changing, success means being able to roll with the punches. Offering title insurance can help lenders develop more stable revenues, stronger customer ties, and a competitive edge in the marketplace.
Whether you pursue a joint venture or franchise, taking action now positions you ahead of the curve. The key is aligning with the right partner and having a vision for the future. In a competitive and shifting market, adding a title business is more than a smart idea—for lenders who truly want to lead, innovate and grow, it’s essential.
(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)
