Can I own an interest in a title company? Yes, If you ...
Have the necessary capital and can market the business
Partner with highly skilled title industry professionals
Have an Underwriter willing to sponsor your license
Follow the Rules of the Texas Department of Insurance
Follow the Rules of the Real Estate Settlement & Procedures Act - RESPA
Are willing to work hard and follow the rules
Who can own a Title Company?
Ownership interest in a Title Agency by Real Estate Agents, Homebuilders, Developers, Banks and Mortgage Companies a/k/a Producers, is legal and is usually done through AfBAs. An AfBA is an Affiliated Business Arrangement.
In an ABA, Producers partner with title professionals. Producers generates the business and the title professionals are primarily responsible for managing and operating the business. Affiliated Businesses must comply with all RESPA (Real Estate Settlement and Procedures Act) rules which include proper disclosures, requirements related to organizational structure and distribution of profits.
Typical ABA Models
Examiner Model - ABA employs Examiners to issue Title Evidence and Title Examinations and issues policies but outsources Closings.
Escrow Model - ABA employees Escrow Officers to handle escrow and Closings and issues policies but outsources Title Evidence and Examinations.
Full Service Model - ABA employs Examiners and Escrow Officers and issues Title Evidence and Title Examinations and performs escrow and Closings and issues Policies.