Comstock's magazine 0419 - April 2019 - Page 47

“We think that we can make this whole process faster and more efficient and bring costs down, which can then ultimately be passed down to the consumer.” — David Howie, CEO, Tellus Title Company has since been acquired by San Diego-based XYO Network but has an office at the McClellan Center. McBain is no longer with the company.) “Because all that data is encrypted and it’s a provable encryption, [the lender] can be assured that that’s a real person and that’s real data,” says McBain. “So it’s worth it for them to bid for your business.” Or consider real estate investment trusts, or REITs — companies that own, operate, or finance investment properties and let individuals buy shares. REITS work something like mutual funds for real estate. But those shares trade at less than their real value because of the uncertainties as- sociated with bundling different properties, says Kevin Shtofman, national blockchain lead in the real estate practice of Deloitte Consulting. Instead, blockchain could let a property owner bypass a REIT and sell micro-shares directly to investors in the form of digital tokens, cutting out the inter- mediary REIT. “We can sell each development in- dividually to investors, therefore unlocking more liquidity and hopefully increasing the value of the underlying asset,” he says. Shtofman’s company has also mapped out a way that blockchain could speed up the existing title management system. A Deloitte report highlights a Ghanaian startup launching a land title registry to get all private land registered on a blockchain. When a property is being sold, a land surveyor uses GPS equipment to report the property’s boundar- ies. The title with those GPS coordinates and oth- er details get recorded on the blockchain. As long as the original title is clear of defects, those time- stamped and unchangeable records remain secure and transparent forever. A system like that would cut the number of errors in land titles — about 30 percent today, ac- cording to Goldman Sachs. Each of those mistakes requires a labor-intensive process to clear. Only ti- tles that are clear of defects would get recorded on the blockchain. With all subsequent changes to the title recorded there, the amount of time that insur- ance companies would need to check a title would be cut significantly, says David Howie of Tellus Title Company, who works out of Placer County. Howie is out to create a kind of Dewey Decimal system for property on a blockchain, similar to the one Deloitte describes. “We think that we can make this whole process faster and more efficient and bring costs down, which can then ultimately be passed down to the consumer,” he says. Title insurance companies are trying some- thing similar to speed the title search process it- self. One task in a title search on a property is to identify prior title insurance policies written for April 2019 | 47