When the Levees Broke
Back in September 2005, I docked a flat-bottom boat to my front porch so I could wade through the flooded ruin of my home. Like 80% of New Orleans in the aftermath of Hurricane Katrina, my neighborhood had been underwater for two full weeks. I watched my law books float by in waist-deep sewer water and wondered how exactly we were going to rebuild.
As a native Louisianian, I was no stranger to hurricanes. We were used to hearing that warning, packing a car, and getting out of Dodge. But, for the first time, many of the millions who evacuated never came back.
Empty houses sat rotting as painful reminders of the storm while the city’s tax base took its own direct hit. Since real estate tax is the #1 source of revenue in most jurisdictions, empty houses meant lost funding for schools, roads, parks, and programs. I wasn’t sure if my proud and resilient city would ever recover.
The Opportunity in the Wreckage
Distressed assets have become a favorite of investors and developers because they offer a healthy return on investment regardless of the state of the market. Cities and neighborhoods benefit from revitalization of vacant homes, too. What stands in the way is the $25 billion title insurance industry.
Because the Constitution guarantees “life, liberty, and property,” the government can’t simply seize an abandoned asset and offer it up to investors, even if it’s been sitting empty for years. If a rightful owner were to show up after a sale, title insurance would have to pay claims. Title insurance companies only approve insurance after adequate proof that all owners have been found, notified of the delinquency, and given a fair chance to bring a property back into good standing. This is a harrowingly manual process, as I discovered in my early days as a real estate attorney.
A Major Opportunity - With a Catch
After earning my law degree from LSU, I was trying to grow my own real estate title company and law practice when a large out-of-state investment company came to me with an offer. They had attained a substantial portfolio of delinquent tax properties through legal foreclosure, but their sales were falling through when their buyers couldn’t get title insurance approved.
But tracking down and contacting owners meant finding property tax history (which often requires a subscription to a city or county website), downloading documents, manually transferring data from one doc to another, typing it up in a database, tracking people down, folding and stuffing certified mail envelopes, dealing with half of your mail or more getting returned, and often having nothing to show for all of your work. Meanwhile, the property sits empty.
When I inquired into better processes, most people told me it couldn’t be done. It was a fool’s errand, they said. Well, so is living in a city in a bowl below sea level. I dove in.
A Workflow That Finally Made the Work Flow
I created a title insurance underwriting workflow that evaluated the risks of obtaining a clear title and described curative measures for getting there.
Ideally, a property would go through the workflow and come out the other side insurable. I validated my idea with a national insurance company, asking, “If a property has gone through this process, would you say it’s worth insuring?” They would answer in the affirmative and always add, “IF you can pull it off.” They had doubts. I powered through them.
With the workflow developed, I still needed to bring those manual processes into the 21st century.
The result was JurisDeed: a tool that manages the necessary micro-steps of clearing a title so real estate brokers and attorneys can focus on the big picture.
Outside Chances, Outside Support
I met Lydia McEvoy at the National Conference of Tax Lien Investors. She was an attorney and a tax collector for a large suburb of Kansas City. We instantly bonded over our mutual disdain of returned mail and absentee taxpayers and brainstormed where and how a business of this nature could fit into the market.
I officially launched JurisDeed in 2020. When I raised a pre-seed round of $300K as a solo founder, the first thing I did was buy the intellectual property from the developer. The second thing I did was call Lydia and ask her to be my co-founder and COO.
Together, we discovered the enormous scope of the problem. Undaunted, I knew the landscape and refused to take no for an answer. Lydia, having spent time in the real estate trenches herself, was detail-oriented and had a keen awareness of the challenges of distressed properties. We took our idea and developed a long-overdue solution. Now, JurisDeed is ready to scale up to unlock property opportunities in every city and county in the country.
To make a difference, you have to think differently. When people say no, I ask why not? Pulling these archaic processes out of the dark ages is finally not only possible but necessary for building a resilient housing market.
Bringing Homes Back Online
Distressed properties represent untapped value larger than the entire GDP of many developed nations. JurisDeed gives these properties a shot at title insurance for the first time. While our country suffers from a shortage of affordable housing, it’s criminal to let any viable property just sit there.
Imagine the millions of distressed properties in this country being released back onto the market and becoming a much-needed roof over somebody’s head. Now imagine investing in the company that made that vision a reality.
Welcome to JurisDeed.
JurisDeed Team
Stephen Morel
