FAN and Closingsuite.com Founder and CEO Aaron Davis and COO Mike LaRosa were approached recently by RESPA News for their thoughts on building a successful JV or ABA title operation. You can see the full articles here (subscription required).

As we’ve been saying, affiliated businesses are the hot topic right now. In a soft market, lenders, home builders, brokerages and title agencies alike are seeking new revenue sources. Unfortunately, some are doing it the wrong way. More than a few regulatory enforcement agencies tend to keep a careful eye on ABAs. While speaking at a RESPRO event earlier this year, Mike joined co-presenter Marx Sterbcow, managing attorney for The Sterbcow Law Group, in reminding potential ABA operators that building a shell of a business and calling it an ABA will only result in enforcement action: “Why are you in business, if you can only employ one person?”

Building an ABA the right way means building a full-fledged title operation from the ground up, and planning for the long term.

RESPA News readers were also privy to Aaron’s insights about building a successful ABA in the publication’s recent “The ABCs of RESPA: Getting Back to Basics” report.

Mike and Aaron are no strangers to ABAs. They’ve helped build or helped others build successful ABAs for years. In fact, they’ve also talked some potential operators out of ABAs where a different structure of partnership made more sense.  They both feel strongly that building a successful ABA is not much different than planning a successful independent title operation. If you can’t support the costs of running a true agency operation, you’re probably not in a position to build an ABA.

There are still many ways to plan for a profitable business, however.  Aaron, also a presenter at the RESPRO event, reminded potential ABA (or JV) operators that technology can really help streamline your workflow—especially for non-core services. “You can outsource typing, you can outsource scanning, and some of those post-closing functions,” he said. “Technology that didn’t exist when RESPA was written now allows some pieces of the puzzle to be outsourced. Title production software allows so much more to be done than when these guidelines were written.”

Anyone interested in building title JVs or ABAs should really have a look at the RESPA News report. Also, feel free to email Aaron or Mike with questions. We’d be happy to discuss!