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ALTA 2014 National Update


ALTA 2014 National Update Peter J. Birnbaum Treasurer - ALTA President and Chief Executive Officer Attorneys Title Guaranty Fund, Inc. (312) 372-4375 – PowerPoint PPT presentation

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Title: ALTA 2014 National Update

ALTA 2014 National Update
Peter J. Birnbaum Treasurer - ALTA President and
Chief Executive Officer Attorneys Title Guaranty
Fund, Inc. (312) 372-4375
  • Best Practices
  • Integrated Mortgage Disclosures
  • Improving the Closing Process
  • Advocacy Priorities
  • ALTA News
  • Messaging Campaign

ALTA Primer
  • 107 years old
  • Governed by 11 member board of AGENTS and
  • Creates our policy forms and endorsements
  • Provides Educational Resources
  • Advocacy
  • ALTA IS about YOU and your business!

Market Forces
  • Federal Regulators Remind Lenders of Their
  • CFPB Enforcement Actions
  • The Message
  • Lenders are responsible and liable for acts of
    third party providers that harm consumers

Best Practices
  • ALTA Response to Market Demands
  • Best Practices Framework
  • Title Insurance and Settlement Company Best
  • Assessment Readiness Guides
  • Assessment Procedures
  • Certification Package
  • Policy and Procedures Creation Guidance

Best Practices
  • Title Insurance and Settlement Company Best
  • Establish and Maintain Current License(s) as
  • Written Procedures and Controls for Escrow Trust
  • Written Privacy and Information Security Program
    to Protect Non-Public Personal Information
  • Adopt Written Policies Ensuring Compliance with
    Federal and State Consumer Financial Laws
    (recording and pricing procedures as applicable)
  • Adopt Written Procedures Related to Policy
    Production, Delivery, Reporting and Premium
  • Maintain Appropriate Professional Liability
    Insurance and Fidelity Coverage
  • Adopt and Maintain Written Procedures for
    Resolving Consumer Complaints

Best Practices
  • ALTA Board Motion
  • Encourages members to complete self assessment no
    later than September 2014
  • Assessment Readiness Guides
  • Exclusively available to ALTA member
  • Separate guide available for each pillar
  • Take ownership of your future

Creation Guide
  • Policies Procedures Creation Guide
  • Detailed instructions and tips on how to draft
    policies and procedures that fit a companys
  • Example of what written policies and procedures
    should look like
  • Policy and procedure template
  • Important for each company to craft own policies
    and procedures as cookie-cutter policies not
  • Member benefit

Lender Support
  • Wells Fargo Endorsement
  • Letter to its settlement agents network
  • Wells Fargo supports ALTA's Best Practices, and
    considers them to be guidelines for sound
    business practices that should ideally already
    be in place for businesses providing title and
    closing services for our customers.
  • Wells said implementation can help companies
    prepare and be recognized as a top performer

Best Practices
  • Develop Elite Provider Program
  • Help title and settlement companies implement the
    Best Practices
  • For more information, go to

Best Practices
  • Why You Should Implement Now

Integrated Disclosures
  • Dodd-Frank Act
  • Created Consumer Financial Protection Bureau
  • Purpose Protect consumers by carrying out
    Federal consumer financial laws.
  • Mandate on RESPA/TILA disclosures
  • Replace the existing disclosures required by
    RESPA and TILA with a single disclosure.
  • Implementation August 1, 2015 (no staggered

Integrated Disclosures
  • Loan Estimate
  • Three pages
  • Combines early two-page TIL and three-page GFE
  • Who provides?
  • Two options lender or mortgage broker
  • When?
  • Within three days of application
  • Still subject to tolerances
  • Closing Disclosure
  • Five pages
  • Combines three-page HUD-1 and final two-page TIL
  • Who provides?
  • Two options lender or combination of lender and
    settlement agent
  • When?
  • Three days before closing
  • Exceptions

Integrated Disclosures
  • Applicable Loans
  • Final rule applies to most consumer mortgages,
  • Home-equity lines of credit
  • Reverse mortgages
  • Mortgages secured by a mobile home or dwelling
    not attached to land
  • No-interest second mortgage made for down payment
    assistance, energy efficiency or foreclosure

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Integrated Disclosures
Integrated Disclosures
  • Uniform Closing Dataset
  • Joint effort by Fannie and Freddie to standardize
    the underlying data required by the new Closing
  • Eliminates guesswork determining where data goes
  • Goal is to enhance the accuracy and quality of
    loan data
  • Agents, lenders need to verify systems can accept
    electronic information from each other
  • Lenders likely to demand this to meet three-day

Integrated Disclosures
  • Disclosure of Title Insurance
  • Owners Title Insurance Labeled as Optional
  • Lenders policy
  • Services you can shop for category
  • How to calculate Full premium without any
    adjustment that might be made for the
    simultaneous purchase of an owners title
    insurance policy.
  • Can use enhanced policy or endorsements if the
    lender knows that these products will be
  • Owners policy
  • Other category
  • Must be listed as optional
  • How to calculate Full owners title insurance
    premium, adding the simultaneous issuance premium
    for the lenders coverage, and then deducting the
    full premium for lenders coverage.

Integrated Disclosures
  • Whats Not Included in the Final Rule
  • All-in APR
  • The Bureau did not adopt the proposed amendments
    adding additional costs (such as title insurance)
    to the finance charge.
  • Record Keeping
  • The Bureau did not adopt its proposed requirement
    that creditors maintain evidence of compliance in
    an electronic, machine readable format.
  • Final Closing Disclosure must be retained for
    five years after consummation by the creditor

Whats Next
  • ALTA will continue to work with CFPB and
    coalition partners to improve rule
  • Education and training material
  • Submit questions to ALTA about the rule
  • Follow ALTAs blog for updates and analysis

Improving the Closing Process
  • CFPB Releases Report on Closing Process
  • Identifies Four Pain Points
  • Not enough time to review
  • Overwhelming stack of paperwork
  • Complexity of documents
  • Errors in documents
  • Two Potential Solutions
  • Simplifying closing package
  • Electronic closings
  • E-closing Pilot Program

Advocacy Priorities
  • Improve CFPB Transparency
  • ALTA President Rob Chapman Testifies Before
  • Need for small business advisory panel
  • H.R. 4383

Advocacy Priorities
  • Points and Fees
  • Fees paid to title companies affiliated with the
    creditor 3 cap on points and fees under QM
  • Critics of the industry use the Congressional
    debate to attack the industry
  • Senate proposed CFPB study
  • House Committee hearings
  • Committee approves after mark-up

Advocacy Priorities
  • GSE Reform
  • Johnson/Crapo bipartisan proposal
  • Passed out of Senate Committee on Banking,
    Housing, and Urban Affairs
  • Communicate ALTA members interests on GSE reform
  • Preserve the 30-year fixed-rate pre-payable
  • Allow small businesses to compete
  • Ensure that consumerswhether they live in urban,
    suburban or rural communitieshave equal access
    to credit and competitive interest rates
  • Preserve title insurance as an important
    underwriting risk management standard

Advocacy Priorities
  • Tax Issues
  • Mortgage Forgiveness Debt Relief Act
  • Called a tax extender
  • Forgiven debt is considered income
  • Foreclosures, short sales or a mortgage
  • Estimated 9.7 million homes with mortgages, or
    18.8 are still underwater
  • Subsidized rates for non-primary residences
    phased out now
  • Buying or selling a property could trigger rate

Advocacy Priorities
  • National Association of Insurance Commissioners
  • Financial Reporting
  • Guaranty Fund
  • Consumer Shopping Tools
  • Escrow Theft and Title Insurance Fraud White

Title Action Network
  • Energized movement of land title professionals
    promoting industrys value and protecting
    consumer rights
  • Quick and easy to join
  • Focused on ensuring state and federal legislators
    understand value of the land title industry
  • Wont clog your email or take up your time
  • Easy-to-understand and provides brief advocacy
    updates on issues important to you
  • More than 7,500 members
  • All state land title associations but two have
    partnered with TAN
  • Join at
  • Like us on Facebook!

  • The Title Industry Political Action Committee
  • Voluntary, non-partisan PAC of the America Land
    Title Association
  • 100 of your contribution to TIPAC helps elect
    and re-elect candidates who support our industry
    and understand our issues
  • 2013 Raised 420,326 (goal was 350,000)
  • 2014 goal 425,000
  • Your states 2013 contribution
  • Contact Jessica McEwen at

Liaison Program
  • Advocacy If We Dont Do it, Nobody Will
  • Important to identify and capitalize on
    relationships ALTA members have with members of
  • Get involved with ALTAs Policymaker Liaison
  • Contact Madeleine Nagy at or
    Wayne Stanley at

Market Share Analysis
  • Refi Drop Tightening Market
  • 2014 Q1 Title Premium Volume Down 16
  • 2.4 billion during Q1 2014 compared to 2.9
    billion during Q1 2013
  • 49 states and D.C. all reported decreases
  • Only state to report increase Texas
  • Top states
  • Texas (361 million, up 3.7 percent from Q1 2013)
  • California (279 million, down 25.9 percent)
  • Florida (231 million, down 2.0 percent)
  • New York (216 million, down 2.4 percent) and
  • Pennsylvania (92 million, down 33.6 percent)

ALTA Study
  • Economic Impact of Title Industry
  • The title insurance and real estate closing
    industry help consumers sell, purchase, and
    refinance nearly 10 million real estate
    transactions worth more than 2 trillion annually
    across the country
  • Title insurance and real estate closing industry
    generates nearly 7.9 billion in wages per year
    to 222,921 American workers
  • 65 of settlement agents are small businesses
  • Employ an average of three people
  • Generate 214,801 in revenue per year
  • The direct and indirect economic contributions of
    the industry to the U.S. economy include more
    than 50 billion in economic activities and
    nearly 12.7 billion in wages

ALTA Study
ALTA Growth
  • Record membership five consecutive years
  • More than 5,000 member companies
  • 90 increase over past decade
  • Diverse membership base, with majority of members
    being small-sized title agents
  • Also retain high percentage of members
  • Title professionals value advantages of being an
    ALTA member
  • To join or renew membership

National Title Professional
  • Purpose Designation recognizes professionalism
    and raises awareness of value nationally
  • Qualifications and requirements
  • State certification/designation coordination
  • Three-year renewal
  • 26 designations awarded in 2013

ALTA Conferences
  • Annual Convention
  • October 15-18, 2014 at the Westin in Seattle,
  • Business Strategies Conference
  • March 18-20, 2015 at Sheraton Philadelphia
    Downtown Philadelphia, Pa.
  • Federal Conference and Lobby Day
  • May 18-20, 2015 at the Mandarin Oriental in
    Washington, D.C.

ALTA Member Benefits
  • Policy Forms License
  • free with membership
  • TitleNews
  • Digital edition now available
  • Education e-Kit
  • Tools to help members educate consumers, real
    estate agents, lenders, the media and others
    about the value of title insurance
  • Title Topics
  • Monthly webinar in topics impacting the industry
  • UPS Savings
  • ALTA members can save up to 36 on shipping

ALTA Membership
  • Several Membership Options
  • 800-787-2582

Attorney Membership
  • Eligibility individual real estate attorney who
    practices real estate law and provides title,
    closing and/or settlement services
  • Benefits
  • Title Law Quarterly focusing on key lawsuits
    affecting real property law
  • weekly email updates
  • Advocacy
  • Title Counsel meeting and CLE opportunities
  • Cost 250 per year
  • (includes license)

Messaging Campaign
  • Plan
  • Review current messaging and communications
    vehicles what works and what doesnt work
  • Audience
  • homebuyers, real estate agents, lenders and
  • Research
  • Focus groups and only surveys
  • Develop Integrated Messaging
  • Overarching theme, messages keyed to audience
  • Expect to share results during ALTAs 2014
    Annual Convention

Early Findings of Messaging Campaign
  • DO provide more information to professionals
    (lenders, realtors and attorneys)
  • DONT assume they have an understanding of title
  • DO provide clear, plain and simple materials they
    can give to home buyers
  • DONT clutter explanations with data and stats

Early Findings of Messaging Campaign
  • DO help people understand title insurance
    protects from defects that could come up (cite
    examples fraud, missing heirs, unfiled liens,
  • DONT say title insurance protects from things
    that could be missed
  • DO use language about protection, peace of mind,
    and confidence for homeowner
  • DONT use slogans (protects the American dream,
    helps stabilize the housing market)

  • Thank You!