The real estate transaction is made up a conglomeration of professionals, each one with a real or a preceived duty to the parties at the settlement table.
Through our inattention to ethics and principle, we, the real estate industry, find ourselves surrounded by a vast quagmire of self-dealing, failed duty, and ethical breaches.
I agree with Robert Franco – ALTA’s new guidelines are a step in the right direction. After my first reading, I felt they were missing something. In my book, there is a single, gold standard for a code of ethics – the West Point Honor Code:
“A Cadet will not lie, cheat, or steal, or tolerate those who do”
It’s the last part that’s missing from the ALTA’s Principles of Fair Conduct. One of the critical issues in the Title Industry today is an epidemic of “looking the other way.” Unethical behavior is ignored, accepted and sometimes even encouraged.
Title Agents hold a unique position to observe improper behavior by the parties to the transaction. In most cases it is their duty to ensure that the improper behavior doesn’t occur. But all too often the fear of losing the client/deal froze them in their tracks. The deal “got done.” And the the trust in all real estate professionals erroded a little further.
May I suggest an additional statement be added to the principles:
To not engage in transactions with any entity that does not adhere to business practices that are lawful and consistent with a high stand of ethical beahvior
Now is the time for leadership. No one at the settlement table (Lenders, Real Estate Agents, Attorneys, or Title Agents) is stepping up to help lead everyone out of this mess. The Title Industry’s unique position in the “middle” of the settlement table, gives us a singular vantage point from which to lead. By adhereing to the highest of ethical principles, and not tolerating breaches on the part of others, we can lead everyone to higher ground.
But we, as an industry, are conflicted. We cannot police our masters. As long as title agencies are participants in controlled business arrangements they will continue to be beholden to their sole source of business, the real estate agent or lender. The independence of these entities is comprimised by design, and they will never be able to completely fulfill their duty to the other parties in the transaction. This conflict must be removed before the Title Insurance Industry can move ahead.
1 response so far ↓
Fran Gaspari // October 4, 2007 at 1:05 pm |
I respectfully disagree. Adding more statements to a ‘hollow’ code of ethics achieves nothing. The industry and ALTA had their opportunity to ‘police’ itself. It has been judged ‘wanting’. Only RESPA regulation can save the day–and I’m not a proponent of government intervention! Thanks, Fran