Borrowers beware: These mortgage rules could soon get a face-lift
Getting a mortgage today is much different than it was before the financial crisis.
Loans have to meet certain standards and there are many rules lenders and servicers have to follow. But after a shakeup in leadership at the Consumer Financial Protection Bureau, the future of some policies is uncertain.
Proposals could change calculus of both buying and selling
By Tobie Stanger
If you’re planning to buy a home in parts of the country where real estate is pricey and taxes are high, you could soon snag some bargains thanks to the Republican tax-cut proposals. If you’re planning to sell, you could face some pain.
And in other parts of the country, the tax changes could make moving more costly, prevent you from borrowing...
During WWII there was a famous poster that warned “Loose Lips Sink Ships” to remind civilians at home that giving any type of sensitive information about their jobs in the factories could be used by the enemy. Today, we fight a war against fraud in cyberspace yet, despite all the technological advantages of the intervening decades, our defenses are still only as strong as the weakest link.
Using tools and services widely available in the cybercriminal underground, criminals need a single compromised account to steal from a business. In the title industry, perpetrators monitor the real estate proceeding and pick the time to make a fraudulent request to change the payment type or change it from a legitimate account to one under their control.
As reported by Forbes this summer, thieves have been known to research how a CEO communicates and even his or her travel schedule to make it easier to trick employees to comply with fraudulent requests. FBI Special Agent Martin Licciardo said the best defense in that case is “walking into the CEO’s office or speaking to him or her directly on the phone. Don’t rely on email alone."
That logical advice is not so easy to accomplish if the company hasn’t built a culture based on adhering to best practices to avoid business email compromise (BEC).
Admit Your Business is at Risk
The first step is recognizing that BEC is a real and present danger facing the title industry.
ALTA Dispatches from the front lines:
Maryland, August 2017: The FBI says fraudsters used fake emails to fool a settlement company into wiring them the proceeds of the sale of a couple’s home. Amount lost: $411,548.
New York, June 2017: A Judge trying to sell her apartment received an email she thought was from her real estate lawyer telling her to wire money to an account. Amount lost: $1 million.
Washington, D.C., May 2017: The homebuyers sued the title company for the lost money due to BEC, but also close to $5 million for an alleged violation of the RICO Act. The title company, which denies it had anything to do with the money going missing, said that it immediately contacted the FBI when the attack was discovered. Amount lost: $1.57 million.
Colorado, March 2017: A couple, who lost their life savings while trying to buy their dream retirement home, has filed suit alleging that none of the companies involved in the transaction—including a title company—did enough to protect sensitive financial information. Amount lost: $272,000.
But could it happen to you? Let’s imagine a criminal impersonates a trusted Counter Party in the RE Transaction by hacking into and using the email account of a Borrower’s RE Agent or Settlement Attorney to send fraudulent wire transfer instructions to the Borrower/Buyer. Based on the Borrower/Buyer’s subsequent request, their financial institution executes an authorized wire transfer to an account the criminal controls.
Yes, unless you have built your defenses, you are under threat of attack.
Understand the battlefield and make sure you are using the right weapons to combat BEC:
Establish a company domain name and use it to establish company email accounts instead of free web-based email accounts.
Create intrusion detection system rules that flag emails with extensions that are similar to your company’s. For example, legitimate email of abc_company.com would flag fraudulent email of abc-company.com.
Create an email rule to flag emails where the “reply” email address is different than the “from” email address shown.
Color code emails from your employee/internal accounts a different color than those from non-employee/external accounts.
Rally the troops and commit to training employees, reviewing company policies and developing good security habits:
Be careful posting to social media and the company’s website information about job duties and descriptions, hierarchical information and out-of-office details that can give criminals the information they need to impersonate a trusted Counter Party.
Train your team to carefully scrutinize all emails and not be afraid to use face-to-face or voice-to-voice communications when in doubt.
Be wary of irregular emails sent by high-level executives, as they can be used to trick employees into acting with urgency.
Review and verify emails requesting funds to determine if the requests are out of the ordinary.
Confirm requests for transfers of funds by using phone verification as part of a two-factor authentication; use previously known numbers, not the numbers provided in the email request.
Verify any changes in vendor payment location by following a call back procedure using contact information on file or having secondary sign-off by company personnel.
Similarly, stay updated on customers’ habits, including the details and reasons behind payments.
Communicate Any Breaches Immediately
The following are recommended steps to take if and when you are a victim of outbound wire fraud:
Ensure all employees have the information on whom to contact.
Contact your banking team immediately via telephone and email to inform it of the fraudulent transaction.
Provide a screen shot of the outbound wire if possible.
Once informed, your bank will alert its fraud department and law enforcement.
The bank will contact the Beneficiary Bank to alert of the fraudulent transaction, get a status update on the transaction and begin recall process.
Your banking team should keep you fully informed of the status and any additional steps such as completing an Affidavit of Forgery, Hold Harmless Approval, etc.
Once funds are secured, your bank will make restitution to the proper account.
The Internet Crime Complaint Center (a multi-agency task force made up by the FBI, National White Collar Crime Center and Bureau of Justice Assistance that is commonly referred to as the IC3) notes that all participants in real estate transactions, including buyers, sellers, agents and lawyers are at risk. The IC3 saw a 480 percent increase in the number of complaints in 2016 filed by title companies that were the primary target of the BEC/EAC scam.
Be sure that you and your banking team remain vigilant and prepared to meet this growing threat.
Joseph Curran is senior executive vice president and managing director at BankUnited N.A. He may be reached at email@example.com .
Unless you’ve been hiding under a rock for the last couple of years, you’ve surely heard of blockchain technology—albeit you may not understand it. Like technological advents of the past, e.g. the personal computer and the internet, blockchain technology may soon become a cornerstone of our day to day lives, especially as it pertains to transactions. Given that the largest transaction...
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 3.94 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.90 percent a week ago and 4.13 percent a year ago.
The 15-year fixed-rate average rose to 3.36 percent with an average 0.5 point. It was 3.30 percent a week ago and 3.36 percent a year ago. The five-year adjustable rate average rose to 3.35 percent...
A Fed Rate Increase Is Expected. But What Comes Next?
WASHINGTON — The Federal Reserve is expected to end the year by raising its benchmark interest rate for just the fifth time since the financial crisis, as it continues to slowly unwind its post-crisis stimulus campaign. But pressures are building that could prompt the Fed to start moving a little more quickly.
Robust job creation in November is the latest sign of stronger economic growth, and it comes as Republicans are preparing a $1.5 trillion tax cut that President Trump has described as economic “rocket fuel.”
The Fed is widely expected to acknowledge the strength of the economy by increasing its benchmark rate by one quarter of a percentage point on Wednesday, after its final policy meeting...
The electronic mortgage you knew has changed. Consumer expectations of the mortgage process are evolving. With the help of industry players, lenders are meeting increased digital demands by transitioning into new e-mortgage strategies. The new e-mortgage age has increased adoption, but not without growing pains, misconceptions and overcoming barriers.
This transition is essential to the future of the mortgage industry. In fact, surveys by Fannie Mae’s Economic and Strategic Research Group found that consumers want a fully mobile...
Major players in the financial industry hope for sweeping change at the Consumer Financial Protection Bureau (CFPB) now that a staunch conservative is in charge.
Office of Management and Budget Director Mick MulvaneyJohn (Mick) Michael MulvaneyOvernight Regulation: Feds push to clarify regs on bump stocks | Interior wants Trump to shrink two more monuments | Navajo Nation sues over monument rollback | FCC won't delay net neutrality vote | Senate panel approves bill easing Dodd-Frank rulesOvernight Cybersecurity: Mueller probe cost .7M in early months | Senate confirms Homeland Security nominee | Consumer agency limits data collection | Arrest in Andromeda botnet investigationOvernight Finance: GOP delays work on funding bill amid conservative demands | Senate panel approves Fed nominee Powell | Dodd-Frank rollback advances | WH disputes report Mueller subpoenaed Trump bank records MORE was cleared to begin reshaping the CFPB when a federal court last week blocked an attempt to depose him.
While Democrats are fretting about the CFPB’s future, banks and others in the financial services sector are eager for a new start at an agency they’ve long considered unaccountable and harmful.
“We want Mick Mulvaney to be smart, reasonable and balanced,” said Richard Hunt, president of the Consumer Bankers Association. “He knows the CFPB...
Senate Banking to Consider Dodd-Frank Tweaks this Week
The Senate Banking Committee's markup of S. 2155, the "Economic Growth, Regulatory Relief and Consumer Protection Act," has been scheduled for Tuesday, December 5, 2017. The bill has bipartisan support and is expected to pass.
While most of the bill's provisions focus on providing regulatory relief for community banks and credit unions, there are some pieces that will impact ALTA members. These include a change to the TRID three-day rule for instances in which the consumer could get a lower interest rate, a sense of Congress that the Consumer Financial Protection Bureau (CFPB) should put out more guidance on TRID, and a requirement for the CFPB to write new consumer protections for Property Assessed Clean Energy (PACE) loans.
The bill may also include an ALTA-supported amendment to require the CFPB to allow the disclosure of actual title insurance premiums and discounts to homebuyers. Under the current regulation, the CFPB does not allow title insurance companies to disclose available discounts for lender's title insurance on the government mandated disclosures.
This amendment would reflect the changes sought by the TRID Improvement Act of 2017 (H.R. 3978), which passed the House Financial Services Committee on November 15 by an overwhelming 53-5 bipartisan vote.
If you have any questions please contact Justin Ailes, ALTA's vice president of government and regulatory affairs, at firstname.lastname@example.org.
Daily Real Estate News | Friday, December 01, 2017
Many renters say saving for the down payment is a major obstacle that is preventing them from purchasing a home. A new mortgage offering says it wants to help remove some of that burden for renters.
Home Partners of America, a rent-to-own firm, is touting its new mortgage product that allows tenants to apply some of the appreciation in their home’s value during the time they live there to reducing the down payment. In some cases, it could reduce the down payment requirement...
Fannie: Millennials Embracing Home Ownership in Droves
While traditional age-group analysis sees demand as muted, a different lens reveals otherwise.
New research from the University of Southern California and Fannie Mae confirms that millennials are finally embracing home ownership.
The study, conducted by Patrick Simmons, director, strategic planning for the Economic & Strategic Research Group at Fannie Mae and Dowell Myers, professor of policy, planning, and demography at the Sol Price School of Public Policy at the University of Southern California, notes that traditional age-group analysis of the data suggests...
With a population of more than 88 million, the millennial generation has the vastness to truly make an impact on the housing market as buyers, according to a recent study released by Fannie Mae.
However, an underwhelming homeownership demand amongst this age group of mostly 25-34 year-olds has halted the nation’s housing recovery as millennials have a lower likelihood of buying homes compared to other generations.
According to Fannie Mae’s Perspectives blog, the Great Recession serves as the reason behind millennials slow ascent into homeownership
Our industry is at a crossroads. As our most experienced mortgage professionals enter into retirement, who will fill in the gap? The time has come to hire new talent. If the mortgage industry is to move forward, it will be because new professionals step into the roles that a retiring salesforce are leaving vacant.
However, taking a chance on a “rookie” loan officer can be risky. Today’s great loan officers have extensive industry knowledge, excellent customer relationships, and a predictable pipeline of business. These
In its a new 2018 Outlook entitled "Fitch 2018 Outlook: U.S. Title Insurance Industry (Market Fundamentals Point to Continued Strong Performance)," Fitch Ratings predicts a stable outlook for 2018, predicting that “ratings for the industry, on balance, will remain at current levels over the next 12-24 months.” Title profit margins have been strong for the third consecutive year, with title segment pretax operating margins...
Tablets and smartphones have become the tools we use to enable our ever-increasing technology-laden personal and professional lives. These devices are mobile and very easy to use and give us the choice of countless numbers of apps to make us more available to communicate and productive. These devices and apps also open us up to more potential security weaknesses and ways in which to get hacked. In addition to shopping at legitimate websites, you want to ensure your computer or mobile device is secure. Cyber criminals will try to infect your devices so they can harvest your bank accounts, credit card information and passwords. Take the following steps to keep your devices secured:
If you have children in your house, consider having two devices: one for your children and one for adults. Kids are curious and interactive with technology. As a result, they are more...
The Docket: Connecticut Court Rules No Coverage for Insured That Knew About Easement
November 30, 2017
The Docket is a monthly TitleNews Online feature provided by ALTA’s Title Counsel Committee, which reviews significant court rulings and other legal developments, and explains the relevance to the title insurance industry.
It’s a common adage that employees are the weak link in corporate cybersecurity. But I believe they are also the best defense, if they are given policies that are easy to follow and not too numerous and complex. Employee security training and best practices need to be user friendly and simple to be effective.
Cyber attackers don’t need to have advanced hacking skills to break into corporate networks; they just need to know how to trick people into opening attachments and clicking on links. Phishing attacks are the cause of 90% ...
Many if not most elderly people are fully able to be full participants in the management of their own affairs. Sometimes, though, conditions such as dementia and Alzheimer’s Disease can prevent them from making rational, reasoned decisions.” The Alzheimer’s Association tells family members to consider these signs in considering whether a person may suffer from dementia:
Poor judgment and decision making
Making a bad decision once in a while
Inability to manage a budget
Missing a monthly payment
Losing track of the date or the season
Forgetting which day it is and remembering later
Difficulty having a conversation
Sometimes forgetting which word to use
Misplacing things and being unable to retrace steps to find them
While title and settlement agents typically don’t come into contact with the subject until the closing, it’s important to be aware of red flags and proceed cautiously when encountering irregularities or unusual situations. Here are other signs to consider when evaluating whether a party to the transaction might be suffering from reduced mental capabilities:
Never get to speak directly with the elder person involved in the transaction
The appearance of disorientation or lack of understanding
The person seems unaware of dates and times
The person seems to lack understanding of what the transaction is all about
Recent, uninsured deeds in the chain of title (this comes up over and over in many flavors of fraud and forgery)
Change in contact person or other authorized user
Elder borrower not allowed to speak for him or herself
No documentation to support third-party’s authority
Use of powers of attorney or change in grant of POA
Free and clear property
Documents signed outside of escrow
Sales or loan proceeds paid over to somebody other than the borrower or seller
Holder of POA wants funds disbursed to him/herself
Although there are still problem areas, Freddie Mac’s latest monthly outlook shows many reasons for optimism, with “housing markets on track for their best year in a decade by a variety of measures.”
In Freddie Mac’s November 2017 Outlook, released today, Freddie predicts 1.2 million housing starts for 2017, and 6.13 million home sales. Both starts and sales are anticipated to increase across 2018 and 2019 as construction helps relieve the inventory shortages.
Sean Becketti, Chief Economist, Freddie Mac, said:...
House GOP Has Votes to Pass Bill, Brady Says: Tax Debate Update
The Senate tax-writing committee began hammering out the details of its tax cut proposal on Monday. The House may vote on its bill as soon as Thursday. Here are the latest developments, updated throughout the day:
House GOP Has Votes to Pass Bill, Brady Says (5:28 p.m.)
The chief House tax writer says he’s confident the chamber has enough...
Commercial mortgage loans jump 8 percent in third quarter
By Dave Kovaleski | November 13, 2017
Commercial and multifamily mortgage loan originations were up 8 percent in the third quarter, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations.
They were also up 21 percent in the third quarter...
Mortgage subsidies take center stage in tax debate
The future of the mortgage-interest deduction and other federal housing incentives has proven to be one of the hot spots in the debate over tax reform.
But while Realtors and some industry groups say Republican proposals to scale down tax perks meant to spur homeownership could severely damage the market, other analysts say mortgage subsidies should be restructured or eliminated altogether.
The conservative leaning American Enterprise Institute’s (AEI) International Center on Housing Risk says that the mortgage interest deduction should go.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average slipped to 3.90 percent with an average 0.4 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.94 percent a week ago and 3.57 percent a year ago.
The 15-year fixed-rate average fell to 3.24 percent with an average...
There’s been a lot of buzz about online notaries and digital closings over the past year. While many states will start to consider online notary legislation, the fact remains there are four main ways closings can occur. Here’s a summary of the options:
The Future is Bright for E-mortgages: An Overview of Relevant Laws and Requirements
November 9, 2017
By Michael Gordon and Rajasekhar Penugonda
The industry is working to streamline the overall mortgage process by encouraging the use of electronic documents. Fortunately, there are U.S. federal and state laws that permit lenders to originate e-mortgages in any state and deliver them to investors, including Freddie Mac, for purchase. And with the legal framework in place, interest in e-mortgages is picking up speed.
While barriers to adoption remain, powerful forces are driving interest in e-mortgages, not the least of which...
TitleTap, a provider of real estate law and title insurance website marketing tools, launched a new blogging service for title agents and real estate attorneys.
“Getting found online today has a lot to do with quality content and information that is localized,” said Eliot Dill, co-founder and COO of TitleTap. “Blogging strategically not only supports boosted ranking results but also helps you become the authority in your market while fueling other marketing mediums like social, email, flyers and PR.”
PCN Network announced a new service offered through its technology-based disbursement solution to securely manage mortgage funds help protect against cyber theft and fraud.
Called SafeValidation, the solution confirms payoff accounts and authenticates payees for outbound wires. Both are incorporated into SES Technology and are included in the Safe Escrow service.
“Two thirds of title agents believe that not enough is being done to control escrow security,” said Pritam Advani, CEO of PCN Network. “And our technology solutions are likely to control escrow fraud better than current processes. Safe Escrow, built on proprietary SES Technology, supports this tighter security through central escrow management, while still providing local execution by agents.”
Joyce Lombardo, owner of Fast Tract Title, added “I frequently hear stories of thefts of escrow funds. I worry that I could be targeted next. Safe Escrow and SafeValidation give me confidence that my funds are secure and are being sent to the right payee.”
Industry Heads Agree on Explicit Government Guarantee for Fannie and Freddie
Nov 3 2017, 9:39AM
The second in a scheduled three-part hearing on Sustainable Housing Finance was held on Thursday by the Housing and Insurance subcommittee of the House Financial Services Committee (FSC). This hearing focused on "Private Sector Perspectives" on Housing Finance Reform...
ALTA Past President Details Wire Fraud Threats During Congressional Testimony
November 2, 2017
ALTA Past President Daniel D. Mennenoh ITP, NTP detailed the threat of wire fraud during a Congressional hearing Nov. 1 before the Subcommittee on Financial Institutions and Consumer Credit.
During the hearing title “Data Security: Vulnerabilities and Opportunities for Improvement,” Mennenoh shared that wire fraud scams have increased 480 percent over the past year. These crimes have cost consumers $5.3 billion.
“The average successful bank robber’s haul is $3,816 while the average successful wire fraud loss is $129,427,” Mennenoh...
The number of wire fraud scams reported by title companies to the Internet Crime Complaint Center (IC3) spiked 480 percent in 2016, according to a warning issued to businesses by the FBI. If funds are transferred to a fraudulent account, it is important to act quickly:
Contact the financial institution immediately upon discovering the fraudulent transfer.
Request that the financial institution contact the corresponding financial institution where the fraudulent transfer was sent.
Contact your local Federal Bureau of Investigation (FBI) office if the wire is recent. The FBI, working with the United States Department of Treasury Financial Crimes Enforcement Network, might be able to help return or freeze the funds.
The U.S. economy grew faster than analysts had expected in the third quarter of 2017, with the Bureau of Economic Analysis saying America's real gross domestic product increased at 3 percent — below the 3.1 percent rise in the previous quarter, but...
At the end of the Mortgage Bankers Association (MBA) national convention held in Denver this week, President David Stevens made a surprise announcement that he would retire effective Sept. 30, 2018. Prior to this, however, he fielded questions from VantageScore President Barrett Burns and MBA members during a Q&A breakout session. Stevens answered several questions covering a range of issues, but much of the discussion focused on reform of government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac,...
In the wake of Equifax’s announcement of a major breech involving the data of nearly one-third of the U.S. population, consumers are increasingly alarmed about the safety of their personal and financial data. The hearing will assist the subcommittee in developing policy...
A bill to change part of the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures rule has bipartisan support in the House of Representatives and a coalition of many of the biggest trade groups in housing now say they support the bill too.
The bill in question deals with a title insurance issue and how its fees are presented on both the Loan Estimate and the Closing Disclosure forms...
The National Association of Insurance Commissioners adopted the Insurance Data Security Model Law during a joint meeting of the Executive (EX) Committee and Plenary.
The model law, adopted during National Cybersecurity Awareness Month, creates rules for insurers, agents and other licensed entities covering data security, investigation and notification of breach. This includes maintaining an information security program based on ongoing risk assessment, overseeing third-party service providers, investigating data breaches and notifying regulators of a cybersecurity event.
"Considering the recent series of data breaches, cybersecurity is more important now than ever," said Ted Nickel, NAIC President and Wisconsin Insurance Commissioner. "Regulators have a critical role to play...
New York Releases New Regulations Targeting Title Insurance
October 24, 2017
The New York Department of Financial Services (DFS) adopted two new regulations for the title insurance industry that clarify rules for marketing expenses and address affiliated business arrangements.
The first final regulation clarifies rules about marketing expenses including meals and entertainment, and ancillary fees that title agents or title insurers may charge the insured at closing. The second final regulation requires title insurance companies or agents that generate a portion of their business from affiliates to function separately and independently from any affiliate and be open for business from other sources.
The New York State Land Title Association provided input to DFS as it created the new regulations, but said “regrettably, the end product does not serve the people of New York State, despite its good intentions.”
“In fact, we believe these regulations will have major fallout for the title insurance industry, and therefore, consumers, other real estate professionals, and the real estate industry as a whole,” the NYSLTA reported in a release. “We believe the new regulations will force small, local title insurance companies to close, costing jobs and making the market ripe for take-over by multi-state conglomerates, thereby reducing the options available to consumers.”
While the DFS believes the regulations will help “consumers know what they are paying for during the closing process,” the NYSLTA disagrees with the assertion that consumers will benefit. The bulk of all the closing costs incurred—state, county, and local fees and taxes—remain unchanged, NYSLTA said in its release. In Nassau County alone...
Stewart announced that its title and settlement services are now available through Ellie Mae’s Encompass mortgage management solution. The integration allows lenders to order Stewart’s solutions directly through Encompass for improved quality and efficiency in the loan origination process, the companies said in a release.
“Stewart and Ellie Mae are excellent partners and we look forward to continuing our long-standing, successful relationship,” said Bill Sullivan, senior vice president of Stewart’s enterprise lender sales division. “Stewart’s dedicated customer service and the secure, seamless integration with Encompass simplifies and further automates the mortgage process for Ellie Mae lenders.”
Daily Real Estate News | Wednesday, October 18, 2017
Quicken Loans is commanding the largest share of the mortgage market, according to 2016 data recently released by the Federal Financial Institutions Examination Council. But Wells Fargo boasts the highest origination dollar volume at $126 billion in 2016, compared to Quicken Loans’ $90.6 billion.
iEmergent, which compiled the data, calculated the top mortgage lenders by looking at the number of purchase and refinance loans originated. The following...
"Our buyer has evolved, they've moved from mom and pops to young people who want to pay with various forms of payment," said Ben Shaoul, president of Magnum Real Estate Group.
Others, however, are not as comfortable with the relatively new currency.
Bitcoin is already in retail and restaurants — so it was only a matter of time before the cryptocurrency took on real estate. That time is now. Bitcoin is slowly making its way into closings on everything from Lake Tahoe land in California to Manhattan condos to single-family homes in the heart of Texas.
"Our buyer has evolved, they've moved from mom and pops to young people who want to pay with various forms of payment," said Ben Shaoul, president of Magnum Real Estate Group. "Cryptocurrency is something that has been asked of us - ...
New ALTA President Urges Industry to Answer ‘Mandate for More Transparency’
October 17, 2017
In an era when the consumer is more inquisitive, and knowledgeable, than ever before, 2017-18 ALTA President Steven G. Day NTP urged ALTA ONE attendees to continue educating lenders, real estate agents and consumer about the work the industry provides to benefit them and the real estate transaction.
‘The Future is Already Here. It's Just Not Evenly Distributed’
October 17, 2017
With the theme of “Ready for What’s Next” as the backdrop for this year’s ALTA ONE, ALTA CEO Michelle Korsmo opened the conference with a quote from author William Gibson.
“The future is already here, it's just not evenly distributed,” Korsmo shared with the more than 1,100 attendees attending ALTA ONE in Miami. “There’s a lot of wisdom in this thought. It gives us some direction as we ponder the potential changes in our industry. The future is already here.”
Self-driving cars, Amazon drones and solar roof shingles are all products that are already available—just not commonly used. Yet.
An example more closely to the title industry is remote online notaries. Legislation allowing these types of closings has already passed in a few states.
“Online notaries are here and some are using them, but it’s not evenly distributed,” Korsmo said. “Online notary is not part of our daily work flow. The question is will it be? And if so how and where?”
Customer needs will play a large role in how and when title and settlement companies implement online notary processes into their work flow. Having a culture that is connected to your customer is critical to understanding what innovation changes will take hold.
Korsmo shared a message Amazon CEO Jeff Bezos wrote in his letter to shareholders. Bezos describes his process for remaining relevant and providing solutions to his customers with what he calls “true customer obsession.” The letter goes on to say “… customers are always beautifully, wonderfully dissatisfied, even when they report being happy and business is great. Even when they don’t yet know it, customers want something better, and your desire to delight customers will drive you to invent on their behalf.”
“Beautifully, wonderfully dissatisfied. That resonates with me,” Korsmo said during her opening keynote. “Just because everyone seems happy doesn’t mean they don’t want more or different. It can drive you to invent of their behalf. I think about it when we work to deliver services to you.”
Korsmo then outlined several initiates ALTA has developed over the past few years to help members be ready for what’s next and succeed in the market. Some of the recent benefits include:
ALTA Best Practices
Title Action Network
Homebuyer Outreach Program
To close her speech, Korsmo challenged the attendees to do three things:
Introduce yourself to someone at an engagement lab who was thought-provoking and tell them why. ALTA ONE engagement labs are designed for discussion and interaction, just like all of ALTA ONE. Take the opportunity to meet someone new and have a meaningful conversation.
Think of the innovation that you’re most skeptical about right now. Maybe it’s artificial intelligence, online notary, or even blockchain and bitcoin.
ALTA ONE is about identifying the one idea that will benefit your business the most. Think about “the one thing” you’ll take back to your team to do differently that gets you closer to obsessive customer focus. It’s the best way to be ready for what’s next.
“Allow yourself to think differently,” Korsmo said. “Allow yourself to think about what’s next. And, allow yourself a little fun while you’re at it.”
With legacy foreclosures dwindling and delinquencies now near pre-crisis lows, it would make sense if foreclosure timelines were shortening, but apparently that’s not the case, according to the most recent quarterly foreclosure report from ATTOM Data Solutions.
Properties foreclosed in the third quarter had been in the foreclosure process an average of 899 days, up from 883 days...
On the campaign trail, President Donald Trump promised to dismantle the Obama-era rules on the banking and mortgage industry. As late as this April, Trump spoke of “a major elimination” of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
This wasn’t entirely hyperbole. In June, House Republicans passed a sweeping regulatory reform bill, the Financial CHOICE Act, that called for tossing out sections of the Dodd-Frank Act and establish a new regulatory framework. The banking and mortgage industry generally supported the bill, even if few lobbyists gave it much chance of gaining traction. The CHOICE Act received no support from Democrats, who deemed it the “Wrong Choice Act.” ...
U.S. Senate: Credit Bureaus Data Security and Equifax
The U.S. Senate Committee on Banking, Housing, and Urban Affairs met Tuesday morning in an open session titled “Consumer Data Security and the Credit Bureaus” to address how credit bureaus intend on protecting consumer data—specifically in light of the recent Equifax data breach.
U.S. Senator Mike Crapo (R-Idaho), Chairman of the committee delivered the opening remarks.
“As a follow-up to our hearing on the Equifax data breach, today we will receive testimony on the protection of consumer data at credit bureaus,” Sen. Crapo said.
At the Equifax hearing, Crapo said that members expressed interest in better understanding how credit bureaus are regulated, how they protect consumer data, and whether...
Weekly mortgage applications rise 3.6% after rates dip
Total mortgage application volume rose 3.6 percent for the week, according to the Mortgage Bankers Association.
But volume was nearly 19 percent below the same week one year ago, when interest rates were lower.
It didn't take much to bring borrowers back to the refinance table.
Just a slight drop in interest rates pushed refinance applications higher after they had fallen for the last month.
That helped increase total mortgage application volume 3.6 percent for the week, according to the Mortgage Bankers Association, whose seasonally adjusted results included an accommodation for the Columbus Day holiday. Volume was nearly 19 percent...
The latest forecast for overall residential loan production this year and next year has been beefed up by nearly $250 billion. But last year's estimate of purchase financing was cut.
During the fourth quarter, $427 billion in single-family loans are expected to be originated by U.S. home lenders. The total includes loans to finance a home purchase and refinances.
Business is then expected to tumble to $359 billion in the first-three months of next year then rise to $476 billion during the second-quarter 2018.
Fannie Mae made the predictions in its Housing Forecast: October 2017.
The secondary lender raised its current-quarter outlook from $377 billion expected last month. The first-quarter 2018 forecast grew from $322 billion, and the following period's projection was up from $433 billion.
The outlook for purchase financing during the final-three months of 2017 was nudged up to $268 billion from $263 billion a month earlier. Purchase-money volume during the first-three months of next year is now expected to reach $213 billion versus $209 billion in the prior report.
Expected fourth-quarter 2017 refinance originations increased to $159 billion from $113 billion last month, and first-quarter 2018 refinances are projected to reach $147 billion, more than $113 billion previously predicted.
Fannie has total originations for all of this year coming in at $1.788 trillion, more than $1.679 trillion previously predicted. Next year's outlook jumped to $1.718 trillion from $1.578 trillion.
The estimate of 2016's purchase financing was reduced to $1.052 trillion from $1.061 trillion in last month's forecast. This year's purchase forecast, though, climbed to $1.126 trillion from $1.078 trillion, and the 2018 purchase outlook grew to $1.182 trillion from $1.163 trillion.
Last year's estimated refinance production increased to $1.000 trillion from $0.991 trillion. The 2017 refinance outlook increased to $0.662 trillion from $0.601trillion, while next year's expected volume rose to $0.536 trillion from $0.415 trillion.
Refinance share is expected to thin from 49 percent in 2016 to 37 percent this year and 31 percent in 2018.
After a month of incremental increases, fixed mortgage rates took their biggest leap since this summer.
According to the latest data released Thursday by Freddie Mac, the 30-year fixed-rate average climbed to 3.91 percent with an average 0.5 point. (Points are fees paid to a lender equal to 1 percent of the loan amount.) It was 3.85 percent a week ago and 3.47 percent...
It looks like would-be homeowners are in luck. According to CoreLogic’s most recent U.S. Home Price Insights report, home prices are stalling—and it could mean more affordable real estate is on the horizon.
How to avoid losing your home settlement funds in a wire fraud
Q: Three weeks ago we were given wire instructions by our escrow company and had no reason to believe that they were not real.
Our escrow officer was extremely busy and impossible to reach via telephone. She was always available via email and text. Unfortunately, we received instructions via email and confirmation via text, and it was encrypted with DocuSign authentication. We wired almost $500,000 and even sent confirmation to her as requested. Later that day we stopped by to drop off a document that had been notarized to her office and learned that they had not received...
U.S. housing market not without challenges, but on solid growth path.
Many Americans remain locked out of access to the mortgage market.
Yet household debt now at 20-year lows is boding well for the economy and housing market.
With the Great Recession now eight years behind us, many investors have lately been taking stock of the housing market. More than a few respected institutional investors see great prospects for growth in the industry, and the fundamentals for U.S. housing market growth indeed look promising. The industry's outlook isn't without major challenges, however, which should be addressed. With that said...
Passwords are critical gateways to your company’s databases and networks. But they’re also potential open doors for hackers. Up there with “password” and “qwerty” in the Hack Me Hall of Fame are passwords that are short common terms like team names, dog breeds, dates and other easy-to-guess options. They’re risky on two fronts, according to the Federal Trade Commission. First, an up-to-no-good insider will take one look at the screensaver of an employee's adorable sheepdog Ralphie and immediately try “sheepdog” and “Ralphie.” Second, common words are particularly susceptible to dictionary attacks, the tech equivalent of the million monkeys at a million typewriters that systematically try every conceivable word until they hit pay dirt. When creating passwords, remind your employees to skip those obvious choices. This is one time when good spelling can lead to bad results.
Longer passwords are better, of course, but they can be harder to remember. So how can businesses balance security and practicality? The FTC suggests considering the passphrase as an alternative. Hackers aren’t likely to guess a nonsense word like “iwtraranaped,” but the guy in the next office who plays in a Kiss cover band on weekends will instantly...
The national ALTA Title & Settlement Agent Registry (ALTA Registry) is a searchable online database of underwriter-confirmed title agent companies, real estate attorneys, and underwriter direct offices.
Lenders and their vendors, title agents, underwriters, and other participants in the closing process must be able to identify each other and communicate in a timely and consistent manner throughout the mortgage transaction. Because there has been no unique ID number used across the industry to help match provider records in different databases, communication has often been difficult and costly for the title industry and its customers. This challenge can also impact compliance and vendor oversight requirements and the need for collaboration throughout the transaction.
As the national trade association for the land title insurance industry, ALTA is perfectly positioned to develop and maintain this industry utility. ALTA offers a unique 7-digit identifier, the ALTA ID, which is automatically assigned to each new database record as a permanent ID number and is never changed, reassigned, or reused. Branch offices have their own ALTA IDs and may be connected to primary business locations with no requirement for consecutive or numerically correlated ALTA ID numbers. ALTA ID numbers are available for free to title agents and to real estate attorneys.
Bipartisan push begins in Congress to change part of CFPB’s TRID rule
Reps. French Hill and Ruben Kihuen lead effort on changing title insurance issue
October 6, 2017
In an increasingly rare moment of bipartisanship, two Congressmen from opposite sides of the political aisle are partnering to push for a change to the Consumer Financial Protection Bureau’s Know Before You Owe mortgage disclosure rule, also called the TILA-RESPA Integrated Disclosures rule, or TRID.
On the Republican side, the effort is being led by Rep. French Hill, R-Arkansas, ...
Despite higher rates, millennial borrowers took out mortgage loans at higher amounts than they did a year ago, according to data from the Millennial Tracker released by Ellie Mae.
Millennial borrowers closed loans in August with an average amount of $185,919, a slight increase from the $184,113 average loan amount in August last year. The change comes in spite of an increase in the average 30-year note rate to 4.211% from 3.706%. ...
American Land Title Association Applauds Bipartisan Bill to Help Consumers Understand True Cost of Real Estate Transaction
Washington, D.C., Oct. 05, 2017 (GLOBE NEWSWIRE) -- The American Land Title Association (ALTA), the national trade association of the land title insurance industry, applauds U.S. Reps. French Hill and Ruben Kihuen for introducing a bipartisan bill to correct the inaccurate disclosure of title insurance premiums on the TILA-RESPA Integrated Disclosures (TRID) and help consumers understand the true cost of their real estate transaction.
The TRID Improvement Act of 2017 amends the Real Estate Settlement Procedures Act (RESPA) to require the Consumer Financial Protection Bureau (CFPB) to allow the accurate disclosure of title insurance premiums and discounts to homebuyers. Under the current regulation, the CFPB does not allow title insurance companies to disclose available discounts for lenders title insurance...
ALTA-supported Bipartisan Bill to Fix TRID Introduced in House
October 5, 2017
U.S. Reps. French Hill and Ruben Kihuen introduced today an ALTA-supported bipartisan bill to correct the inaccurate disclosure of title insurance premiums on the TILA-RESPA Integrated Disclosures (TRID) and help consumers understand the true cost of their real estate transaction.
The TRID Improvement Act of 2017 amends the Real Estate Settlement Procedures Act (RESPA) to require the Consumer Financial Protection Bureau (CFPB) to allow the accurate disclosure of title insurance premiums and discounts to homebuyers. Under the current regulation, the CFPB does not allow title insurance companies to disclose available discounts for lenders title insurance on the government mandated disclosures.
Cohn: 'People don't buy homes because of the mortgage deduction'
White House National Economic Council Director Gary Cohn on Thursday pushed back against criticism that Republicans' tax plan could hurt the real-estate market, saying, "People don't buy homes because of the mortgage deduction."
The key to take down scammers: Here are a few surefire security tricks
"Think before the click"
If a settlement agent believes cybersecurity is something only the big banks and other high profile financial institutions need to be concerned with, think again. Small businesses have a big target on their backs. In fact, ...
Dustan Myrex saw nothing suspicious when he received an email that appeared to be from the closing attorney’s office concerning the wire transfer needed before he bought his house a couple of weeks ago.
It was a Wednesday morning and he had discussed the details surrounding the closing costs with the office the day before.
So when the new email stated “revised wiring instructions is (sic) attached, let me know when the wire is sent,” Myrex followed...
Finalized TRID Rule Applies to All Residential Deals Involving Cooperatives
In July, the CFPB finalized a uniform rule regarding the application of the TILA-RESPA Integrated Disclosure (TRID) requirements for cooperative units.
Under the existing rule, coverage of cooperative units depended on whether cooperatives were classified as real property under state law. Cooperatives are sometimes treated as personal property under state law and sometimes as real property. Because state law sometimes treats cooperatives differently for different purposes...
NATIONAL FLOOD INSURANCE PROGRAM GRANTED 3 MONTH EXTENSION
September 8, 2017
President Donald Trump signed a three-month extension to the National Flood Insurance Program on Friday, giving Congress more time to come up with a long-term financial solution for the program.
Trump signed the extension, which was included in H.R. 601, after the House passed the extension in a legislative package on Friday that also provides funding for hurricane relief and other priorities. With this new extension, the program will now expire on Dec. 8, 2017.
Freddie Macannounced a new enhanced relief refinancing offering intended to aid borrowers who are making their mortgage payments on time, but are unable to participate in the GSE’s “no cast-out” refinance program due to having a loan-to-value (LTV) ratio above maximum requirements. The new program will be effective for mortgages with applications on or after November 1, 2018.
In order to be eligible for the Enhanced Relief Refinance Program, mortgages must be owned or securitized by Freddie Mac, possess a note date on or after October 1, 2017, and not currently hold the status of being a Freddie Mac Relief Refinance Mortgage. In addition, mortgages must not have been...
Draft Bill to Fix TRID Discussed During Congressional Hearing
September 7, 2017
A draft bill expected to be introduced by U.S. Rep. French Hill (R-Ark.) that would correct the inaccurate disclosure of title insurance premiums on the TILA-RESPA Integrated Disclosures (TRID) was discussed Sept. 7 during a Congressional hearing titled “Legislative Proposals for a More Efficient Federal Financial Regulatory Regime."
Called the TRID Improvement Act of 2017, the bill would amend the Real Estate Settlement Procedures Act (RESPA) to allow for the calculation of a simultaneous issue discount when disclosing title insurance premiums. It also would change the period in which a creditor is allowed...
Home prices 'overvalued' in a third of U.S. markets
Homes are now overvalued in more than a third of the nation’s 100 largest metros and nearly half of the country’s top 50 markets, CoreLogic reported.
As of July, home prices in 34 percent of the top 100 cities exceeded their long-run level, the company said. In the top 50 markets, 46 percent were overvalued. In these cities, the prices have risen by 10 percent or more...
PRIA Conference Discusses eRecording and Predictable Recording Fees
The Property Records Industry Association (PRIA) held its annual conference last week in Nashville, TN. Attendees included county recorders, title professionals, lenders and vendors. Topics of discussion centered on emerging technologies and the modernization of property records. Online notary was the focus of many conversations, as documents notarized via webcam are now legal in a few states (including Montana and Virginia, and soon in Texas and Nevada). E-recording and predictable recording fees were also highlighted at the conference. According to PRIA, 1,700 counties around the United States are now e-recording. Predictable recording fees are also becoming more common around the country. Currently, 16 states and the District of Columbia have some sort of predictable recording fee structure. PRIA attendees participated in a workgroup meeting to discuss necessary steps in promoting adoption of predictable recording fees by state legislatures. If you have any questions please contact Elizabeth Blosser, ALTA's director of grassroots and state government affairs, at email@example.com.
TRID Fix a Topic in Congressional Hearing Thursday, September 7
TRID will be on Congress' radar Thursday at a hearing entitled, "Legislative Proposals for a More Efficient Federal Financial Regulatory Regime." The TRID Improvement Act of 2017, a yet-to-be-introduced discussion draft of a bill by Rep. French Hill (R-AR), will be a topic of conversation in the Financial Institutions and Consumer Credit Subcommittee of the House Financial Services Committee.
ALTA has been working closely with Rep. Hill's office on the legislation. The bill amends the Real Estate Settlement Procedures Act (RESPA) to allow for the calculation of a simultaneous issue discount when disclosing title insurance premiums. The bill also amends RESPA and the Truth in Lending Act (TILA) to change the period in which a creditor is allowed to cure a good-faith violation on a Loan Estimate or Closing Disclosure from 60 to 210 days after consummation to match the cure period for QM, or a Qualified Mortgage.
Terminating Easements in States East of the Mississippi River
August 24, 2017
By Adam Leitman Bailey and Israel Katz
One of this century’s most common sources of real estate litigation in the states east of the Mississippi River is easements. In urban areas, entire development projects have been halted as a result of easement agreements, many of them ancient. In our nation’s system of transferring title, in which each parcel of land is transferred with all of the rights of their predecessor owners (no matter how old), these disputes will continue. This article discusses how to terminate easements and...
Feds target luxury real estate wire transfers in money laundering investigation
Nearly one-third of cash sales tied to "illicit activity
The federal government is again expanding its investigation into whether foreign buyers are using shell companies to buy luxury U.S. real estate to launder money after its investigation found that potentially illicit activity is behind more than 30% of cash...
Title and settlement companies impersonated as part of an email phishing scam should notify customers as soon as possible, contact law enforcement, provide resources for affected consumers and review the company’s security practices...
The Financial Crimes Enforcement Network (FinCEN) renewed and expanded existing Geographic Targeting Orders (GTO) that require U.S. title insurance companies—along with their subsidiaries and agents—to identify the individuals behind companies used to conduct high-end, all-cash real estate transactions in certain major jurisdictions.
Following the recent enactment of the Countering America’s Adversaries through Sanctions Act, FinCEN revised the GTOs to capture a broader range of transactions, including those involving wire transfers. The order also includes transactions above...
Agent Has No E&O Coverage for Theft of Escrow Money by Email Impostor
August 22, 2017
A U.S. district court in Maryland recently ruled that an exclusion in a title agent errors and omissions policy for "insufficiency in the amount of escrow funds" has been held to negate the carrier's duty to defend or indemnify the agent for the theft of the seller's money by impersonation and fraud.
Hardly a day goes by without news of some new cyber attack. Less reported—but equally as concerning—are coverage denials under cyber-insurance policies for losses that were plainly caused by computer hackers. Here are some examples, and the lessons
TRID Amendments and Proposal Published in Federal Register
August 15, 2017
The Consumer Financial Protection Bureau’s amendments and proposal to the TILA-RESPA Integrated Disclosure rule were published to the Federal Register on Aug. 11.
The official effective date of the amendments is Oct. 10, 2017. From that date until Oct. 1, 2018, each lending institution will get to choose which of the amendments to comply with. Title and settlement companies will need to be...
This information is not a substitute for legal advice, is for your reference only, and is not intended to represent the only approach to any particular issue. This information should not be construed as legal, financial or business advice, and users should consult legal counsel and subject-matter experts to be sure that the policies adopted and implemented meet the requirements unique to your company.
Is there a recommended “look back” period when performing a Best Practices assessment?
ALTA does not recommend a specific “look back” period for Best Practices assessments. When determining an appropriate look back period for assessments, it is important to consider...
As president and chief executive officer of Texas-based Rattikin Title Company, Jack Rattikin III has plenty of things that occupy his attention. Third-party vendor oversight and threats to the rating structure in Texas are two top-of-mind issues, but they’re not what keeps Rattikin up at night. Over the past year, a new threat has emerged to become the main reason for late-night tossing and turning for title and settlement professionals: phishing and wire fraud.
“I make it clear in every staff meeting and in front of our closing that wire fraud is our number one concern,” Rattikin said. “It’s not just closing deals and searching titles anymore. There’s a lot of risk that we have...