From AI Hype to AI Reality: Pat Stone on Leadership and the Future of Title | Ep 105

In a world where change is the only constant, Mo Choumil stands at the forefront, guiding title professionals to not just grow their businesses, but to master the art of innovation. With every episode, you're handed the keys to unlock unparalleled growth and stay ahead of the curve. Get ready for a transformative journey. Hello everyone, and welcome to another episode of the Title Agents Podcast. I am your host, Mo Choumil, CEO of Alltech National Title, and today I have the pleasure of having my good friend here, Patrick Stone, CEO of WFG and chairman.

I don't think you're CEO anymore, you're chairman of the board. Is that correct? Chairman, yes. That's fantastic. Well, I can't thank you enough.

You were literally my first guest 2 years ago. And we're starting season 3 or year 3. So I'm very glad and happy to have you back. And you know how much I think the world of you, and that means a lot coming on this show and share your wisdom with our audience. Well, pleasure to be associated with you, Mo, and thank you for having me.

So for listeners who may not know your story, can you give us the short version of your journey from title examiner trainee to building The masterful WFG. Yeah, the, you know, I've been at this 51 years and, you know, so I started as a title examiner trainee looking for a job after college and saw an ad for title examiner trainee and had no idea what it was, but I went and applied and got the job. I've had a couple setbacks, if you will. I did that for about a year and decided that wasn't exciting enough, so I became a stockbroker for a couple years. I decided that that was too slimy for me.

So I went back to the title business and, you know, learned sales and actually got trained on how to close an escrow and just got really interested in the business and trying to make it work more efficiently and better. I spent a couple years with an independent agent. I spent 10 years with Stewart Title. I spent 14 years with Fidelity. Fidelity National Financial, and then I retired and I hated being retired.

I mean, you talk about, you talk about needing a purpose and not having one, that's being retired. And so I decided to start this company in January of 2010, and I've had a lot of fun doing it. It's kept me out of my wife's way and life's good. And you're, you're being very humble. You're instrumental in along with Bill Foley, of building Fidelity to what it is.

So— We did a lot of acquisitions. Bill is an absolute genius, financial genius, and we, I think, did 69 acquisitions my time with him. So since our first conversations 2 years ago, what has changed the most for you, for WFG, and for the title industry? Well, I think the 2 things that have probably impacted the industry the most, one, obviously, cyber Cyber threats, cybersecurity. We are spending an extraordinary amount of time dealing with that, and it is very, very impactful.

The other thing is the amount of conversation and worry around AI. You know, we've used AI in some form for a long time, automated title products. As a technological innovation, it has come to the forefront in the last year and a half. Or 2 years, and I think it's going to have a big impact on our business over time, but the amount of anxiety it's causing is off the charts right now. Yeah.

So you've experienced multiple industry cycles and technology revolutions. What aspect of the title business should never change regardless of how advanced technology or AI or whatever they may be becomes? Well, you know, a couple things about our business, and it depends a little bit where you are in the country because the business varies dramatically as you move around the country. But a couple things I think that are just fairly profound, and we are really the nexus of the real estate transaction. We bring the players together, we verify the ownership, we verify what's impacting the property.

In a lot of cases, we have title, but we also have escrow, and we are the entity that makes it understandable for the buyer and seller. So those things haven't changed, and I don't think they're going to change. You know, if you really look at our industry, real estate is probably the most, how do I want to say this? We have 3 major regulatory silos in this business. We have the realtors that report up to one regulatory silo.

We have lenders that are regulated differently, and then title companies are regulated on a state-by-state basis because we're an insurance company. I'd like to say this. This is going to sound somewhat cynical, Mo. When I started 51 years ago, it took all of 45 days to close a deal. Today, it only takes 45 days to close a deal.

So here we are, 50 years later. We spent billions of dollars, but because we're regulated in these separate silos and the regulation is really very strong in all cases, we don't have the level of integration in the process that we should have. We should be able to take time and cost out of the process. We have not been able to. So, as we'll get back to the automation piece, and as AI automates more tasks, what human skills become even more valuable?

Oh, I think the ability to communicate, and this is a real skill that I think is paramount, is a willingness to engage with people, answer questions, and be a resource. That has not changed. And almost every buyer and seller has a lot of questions or a lot of anxiety, and to a large degree alleviate that with our knowledge and our expertise. If it's just title, the fact that we can resolve issues and problems, you know, it amazes me how many problems arise in title searches still today, you know, People go, well, let's just automate everything. Well, if you take a look at the different databases around the country, the different business practices, the different regulation, we are the one entity that actually understands how to bring it all together.

So if a young title professional asks how to stay relevant for the next 20 years, I don't know how it's possible with AI, 20 years, it seems like 100 years. What advice would you give them? Well, I think one, stay abreast of the industry as a whole. You know, try to read the different resources that are out there. I mean, we have, you know, we have Inman News, we have HousingWire, we have The Title Report.

There are a lot of sources of information that will keep you abreast of what's going on in the industry, what's relevant, what's concerning people. I think also try to stay really attuned to the technological advances being made. Obviously, we're spending a lot of time now talking about AI, but you really need to know what's going on and how to use the technology to make the process more efficient and more understandable for your clients. Yeah. Where do you think the title industry currently sits on the AI adoption curve?

Well, yeah, where does anybody sit on that curve right now is a good question. I know what you guys are doing. I know you guys are way ahead of the curve. And I was at the WFG Summit and I love what you guys are doing. Yeah, I think the industry is embracing it.

And I think here's what's happening is, is, you know, AI has a lot of applicability to things that are measured or things that can be numerically defined and can be analyzed in a repetitive manner. But I think the applicability of AI for a lot of the processes that are standardized Makes a lot of sense. Will it replace your job? No, but someone that uses it well might take your job. You know, so I do think AI has a tremendous potential for our industry.

So what's the biggest misconception title professionals have about AI today? Oh, that I hear about 50 a day. So I think it's not even a misconception, it's a lack of understanding. I think people look at it as, something out there that's going to replace them or make them irrelevant. That's not the case.

What it'll do is it'll allow us to automate some of the functionality that is measurable. And I think it'll help us in a lot of ways be more efficient and operate in a more accurate manner. So I think it's worth embracing and understanding. If you have questions, talk to somebody that knows Uh, you know, talk to a tech company that's using it. Um, don't be intimidated.

Be curious. Awesome. What, uh, business functions or processes do you believe will evolve the most over the next 3 to 5 years? Oh gosh. Um, I know you're big on trying to cut down on, uh, the touches and processes.

I know you talk— I forgot, you said 2 years ago is how many touches for a file? Like 100 and some touches? Oh, it was, uh, it was 80-some. Yeah, it was just crazy. And I do think, you know, I do think that AI will help reduce the amount of duplicative behavior around the transaction.

I keep thinking, you know, we've done a lot with our MyHomeTech company about trying to create informational— how do I want to put this? Data vaults, information that's going to be standard and used over and over again without having to be rekeyed or looked up every time. And I think AI will help with that a lot. I really do. You know, we, if you look at the, as you just mentioned, if you look at the real estate process, we do the same thing over and over again.

Sort of the lenders is sort of the realtors. And yes, name and address. We did a re— you know, this was 20-some years ago, but it's still accurate. We did research on how many times name and address were entered, and it was over 80 times. The same name and address.

This is just crazy, right? So I do think AI will help us resolve some of that, but I do think there's going to be, there needs to be more, how do I want to put this? There needs to be more interface between our regulatory agencies. So beyond AI, what other trends are quietly reshaping the future of our industry and real estate in general? The biggest one is cyber theft.

I mean, you know, it is becoming so incredibly sophisticated and, you know, the ability of bad actors to access data and to formulate inquiries and interfaces that appear to be legitimate and coming from a responsible source, it has become so sophisticated that it is beyond scary. And it is a constant problem, you know, because there's so many players in this business, because we have so many different entities entering data. It is very easy in this industry for the cyber thefts. It's a perfect industry for them to come after, and they're coming after it big. Yeah.

So you've always focused on removing friction from transactions. Where's the greatest friction in closing process today, specifically for independent title agents that may not have the sophistication or systems in place like the, like WFG or the bigger companies? Well, I think the, again, it depends greatly on where you are in the country that the friction point would be different. But again, the lack of standardized data set is the biggest impediment we have to creating efficiency in this business. We are all entering the same data over and over again.

We're using it a little bit differently, but it's, It's a very inefficient process. And can we, can that be fixed at some point? I sure hope so. I kept thinking it was going to be fixed 50 years ago, but it, you know, it hasn't changed much. So if, this is a hypothetical question, if you owned a small independent agency today, what are the first practical AI applications would you implement?

Oh, that's a good question. I can't really answer that. Again, it depends on where you are, but I would, if If I'm a small agent, talk to your underwriter, talk to your underwriter's tech department about what's working, what they're doing, where they're going with it, and how you can use it. I think the biggest, biggest positive comment I can make is, is ask questions. Don't be afraid to ask questions.

Don't be afraid to go out and look for answers. Don't be afraid to explore all the potential sources of information. There are some companies that are way ahead of other companies on using AI right now. However, almost all the companies are investing in it to a large degree, and your underwriter should be able to help you. And I love what WFG's doing with assisting independent title agents with ATS.

I think it's called ATS. Yeah. Okay. You want to chime in? Can you tell the audience what's the role of ATS and I don't want to box you in.

Well, you know, we've really, we've had a great deal of success in automating some of the processes and using AI, and we are working diligently to make that available to everybody that we do business with. You know, I think, and, you know, people go, well, you know, do you really want to, do you really want to put these things out there? Do you really want to talk about automated title services? You want to talk about this? You want to talk about, yeah.

Yeah. And you know what? It benefits everybody and we need to make, in order to really achieve any really efficiency, the more people we can get to engage, the more efficient we're going to be. Did you have something particular that intrigued you about the ATS effort? Oh yeah.

I met the team. They were really very friendly and very approachable because I mean, as I told you before, like I am deep very deep into AI, kind of become an expert at it, but they were really good at kind of taking that fear away from people that were very shy or afraid of even what AI is. They were very approachable, friendly, and kind of, I love that. That's what you're doing too. We're all in this together.

And if you're, you know, we obviously market and sell our skillset to our agents. And, you know, people go, you know, why are you doing this? Why are you putting all this time and effort in it? Because the more money our agents make, the more money we make. Common sense.

Yeah. This is a mutual benefit to the nth degree. Yeah. How can leaders separate genuine innovation from hype? Well, that, you know, I think again, I would look for sources, That either validate or raise serious questions about anything you're looking at.

Don't make a decision independent of exhausting all your resources and all your points of access to people that may know something about it. Again, your underwriter should engage with you to a large degree. But I think, I think if you take the time and effort to really explore things, you'll find about, you'll find one thing. One thing you'll find out right away is how much it's being used. If it's not being used much, then I would take a really hard look at its applicability and how efficient it is and what the impact can be.

But I think really the thing I would say is don't be afraid to ask questions. I can't tell you, Mo, how many times in my career I have met people that don't ask questions. And I've actually sat down with a couple of people and said, why don't you ask questions? And they said, well, I don't want people to know that I don't know things. Well, yeah, you don't learn much that way.

Ask questions. Yeah. If you were launching WFG from scratch in 2026 or '27, what would you build differently? You know, I don't know that I would do it a lot differently. We, you know, we, our original methodology and growth pattern was governed to a large extent by the amount of capital.

I think that is always the case with most startup businesses. And as we've grown and become more national and completely national and broadened our exposure and our involvement, you know, we continue to be amazed at the amount of opportunities that are unexplored. So I don't know. I think, I don't know that I would do anything a lot different, Mo. It's been a real fun journey.

It really has. What does a title agency of 2030 and beyond look like? Well, it's going to be a highly automated organization that has very good cyber theft protection and uses AI intelligently. You know, I do think that no matter how you feel about AI, no matter how you feel about cybersecurity, no matter how you feel about anything, you've got to deal with it, right? You've got to deal with it.

So ask questions, find out somebody that knows something and talk to them. And like you mentioned, our ATS effort, we are more than happy to talk to anybody and help you become more conversant, but also make good decisions about how you invest your dollars. What's one prediction about AI, title, or real estate that most people aren't talking about yet? Oh, you know, I, you know, that's a hard question, Mo, because in my whole career, all 51 years, I keep thinking about how easy it would be to make things more efficient in this business, especially if you could break down some of those regulatory barriers we talked about earlier. And I'm hoping that AI will have some impact on that and that we can start sharing data and information more universally.

You know, obviously you've got cybersecurity, you've got to be very cognizant of, got to be very careful. But at the same token, wouldn't it be nice if we could align our business processes so that we didn't duplicate the same thing over and over between the lender, realtor, and the title company? And that it flowed evenly from beginning to end. We might even be able to take 2 or 3 weeks out of the process. I'm rambling a little bit, but yeah.

Well, I was at the WFG Summit a couple weeks ago, and I was very happy to see you're sharing MyHome, that's the platform you would— that was proprietary to your direct shops. Now you're opening it up to title agents. Did you want to touch A little bit about MyHome and what it does. Well, MyHome does a lot of things. We were the first company to develop a statusing software so that the buyer and seller can subscribe and be updated 14 times during a transaction.

We've done the efforts on trying to automate the processes. We've done more, you know, we've got a couple automated products. MyHome Prompts and a couple other things that are just really outstanding products that make people more efficient. Did you have something in particular in mind? No, I was just— I had a great conversation with Wendy who runs MyHome, I guess.

Yeah. And just as far as the lead generation for title agents, and I was very fascinated what it did 2, 3 years ago that was still closed to your direct shops. Now it's open to the To the title agents. I love what you're doing because it just, um, there's tools and, uh, they may be overwhelming for some agents, um, that are kind of just can be very helpful as far as especially the outreach, uh, communication, sales and marketing piece of it. Yeah.

We've developed what we call marketing technology directors that are experts. And you can, if you would like someone to come visit your operation and talk to you, we'd be happy to provide that. That's awesome. Looking ahead for the next few years, what gives you the most optimism about the future of our industry? Well, for some reason, this apparently is not exciting enough for the press because you don't hear or read a lot about it, but there was a profound change in the desirability of controlling your environment because of the pandemic.

And what I'm saying here is there's always been a focus on owning a home, but it was always kind of characterized As, you know, the American dream and the way to create intergenerational wealth was to own a home. And we kind of always characterize it that way. I think now because of the pandemic, there's more focus on controlling the environment in which you live. People stay in their homes longer, but people also want to have a home. They want to actually have control of their environment.

That desire is very strong now. Now, You've got a problem with affordability, but I don't think that desire is going to go away. So I do think when you see interest rates come down a little bit, we're going to be in a very good place. Yeah. But I forgot to ask you about the economy.

What do you think? Kind of just a little high level. You're always— appreciate your opinion. Where we are, where we're heading, kind of just— you don't have to go in depth. You know, here's the thing that probably also doesn't get enough media attention, and that is the amount of capital, investible capital that got, you know, that got amplified dramatically with all the government efforts to stimulate the economy during the pandemic.

You know, and then we had some significant rate shifts. We had a lot of things happen, but the amount of investible capital out there You see that really impacting the economy. There is a lot of money to put into different things. You see dollar amounts now that you never saw before in terms of investments in companies and individuals. But the amount of capital out there is very promising.

I worry a little bit about the economy and I'm not going to get political here, but I will tell you, I worry a little bit about limiting I think we need to regulate immigration very carefully. We need to administer it very carefully, but we need it. We need it because our population is actually on the verge of shrinking. In other words, we have more deaths than births. And plus a couple industries, most specifically agriculture and construction, have been very dependent on immigration.

So I think the capital's there to stimulate the economy. There are a lot of people thought we were going to have a recession. But there is so much money out there to invest that we didn't have a recession. Will we have one in the future? Undoubtedly, we'll have one at some point.

But the amount of money available for investing and developing and trying new things has been phenomenal. That's awesome. As we're coming to the end of this episode, I always ask a couple questions. Do you have a favorite quote or? Yeah.

Well, my favorite, yeah, my favorite quote is, it's not what you say, it's what people hear. Love it. And every time I talk to a new crowd, I try to really be aware of where they're coming from contextually. In other words, what's their experience? What are they exposed to?

What do they know or what do they perceive to be the truth, right? Because if you're going to get someone to listen to you, you've got to say things in a manner they can hear it and not automatically think you're trying to do something that you're not, right? So really think about that. Think about who you talk to and what you think their perceptions might be. Address them.

Address them and be as straight up as you can in the process. I think that's probably my favorite quote. That's awesome. How about a favorite book? Well, now I'm going to kind of boggle your mind on this one a little bit.

Okay. And I read this book back in 1975, and I have referred to it probably 5 million times since then, but it's called Extraordinary Popular Delusions and the Madness of Crowds. And it was written in 1841 by a guy named Mackay. And so why that book? Why do I mention that book?

That was the first meaningful attempt to analyze financial bubbles. And he wrote this back in 1840, and actually I think it probably was published more in 1860, but it's, you know, it's very old. But what he did is he took a look at some of the— he started with the Tulip Bubble. Yeah. That was the first financial bubble of any meaning.

And then talked about the South Sea Bubble, talked about all these different bubbles. Well, you read the book and you, It dawns on you that we are, we get caught up and excited about trends that build momentum and we try to get on the bus before it leaves the station or get on the train before it leaves the station. Almost always when there is some sort of excitement and movement in response to an opportunity, We exceed common sense, right? We create a bubble. I can guarantee you that is happening right now on a couple levels.

It just is a pattern that we do over and over and over again. So being cognizant of how the human mind works, I think, is a good thing to have. And that book really helped me. Well, I'm going to definitely love to read that book. And you mentioned it last time we talked, I believe.

Any last words of wisdom to our audience before we part? Ask questions. I mean, if I can give you anything of value today, don't be afraid to ask questions and go to your underwriter, ask questions, go to people you know in technology, ask questions. You learn by asking questions and by reading things and by just being aware. You don't have to be alone.

You don't have to feel like you're isolated or that you don't have access to information. You do. Be forceful. Ask questions. That's awesome.

Well, Pat, thank you so much, and I cannot appreciate you enough. I appreciate all you do for the industry and for us agents. Thanks a lot. Mo, thanks for having me. Well, wow, what an amazing conversation with Pat Stone, chairman of WFG, uh, has tons of wisdom and, uh, is one of my favorite people in title.

If you enjoyed this episode, as always, please help us out by subscribing, but most importantly, please give us a 5-star review. Until next time, have a wonderful day. In a world where change is the only constant, Mo Choumil stands at the forefront, guiding title professionals To not just grow their businesses, but to master the art of innovation. With every episode, you're handed the keys to unlock unparalleled growth and stay ahead of the curve. Get ready for a transformative journey.