Managing Change: Major Issues Facing the Industry and the Opportunities That Exist Peter J. Birnbaum| ALTA Board of Governors | Attorneys’ Title Guaranty.

Peter J. Birnbaum| ALTA Board of Governors | Attorneys’ Title Guaranty Fund, Inc. | [email protected]

Market Drivers

Compliance/Regulatory Environment Consumer Protection Economy

ALTA GoalHelp industry understand these pressures and

navigate the changing landscape

Dodd-Frank Act

Congress Makes Sweeping Responses to CrisisIndustry Left Picking Up PiecesMajor Components

of Legislation○ Created Financial Stability Oversight

Council○ Reformed mortgage, securitization and

derivative markets○ Established Consumer Financial

Protection Bureau

CFPB

Different Type of Agency: Consumer CopPurpose: “Protect consumers by

carrying out federal consumer financial laws.”

Concerned about financial transactions at a household level

CFPB consumer complaint portalEnforcement actionsMandate to combine TILA-RESPA

Disclosures

CFPB

Complaint Portal CFPB believes publishing complaints will:

○ help detect market trends○ aid consumer decision-making ○ drive improved consumer service

According to the CFPB, a complaint is:○ “a written expression of dissatisfaction with or allegation of wrongdoing by a

provider of any financial product or service or any entity subject to regulation or supervision by the Bureau or a Prudential Regulator made by a Consumer (including a representative acting on behalf of a Consumer).”

Nearly 8,000 complaints published in June Companies given the opportunity to post response

Enforcement Actions

CFPB More Active Than Other RegulatorsTargeting perceived low-hanging fruitCordray Issues First Ever Agency Appellate

Decision in PHH RESPA Case○ Held that PHH Corp violated RESPA by accepting payments for

the referral of settlement service business○ Expanded penalty from $6.4M to $109.2M○ Key take away: Every “Kickback” is a violation

Cordray said RESPA violation occurred every time there was a “kickback” Decision sends important message regarding calculation of remedies under the

RESPA anti-kickback provision

Enforcement Actions RESPA Section 8(a) – anti-kickback

April 2015 – Genuine Title, individual loan officers and title company owners

January 2015 –Wells Fargo, JP Morgan Chase and Todd Cohen February 2015 – NewDay Financial September 2014 – Lighthouse Title January 2014 – Fidelity Mortgage April and November 2013 – Mortgage insurance

RESPA section 8(c) May 2014 – RealtySouth October 2013 – Borders & Borders May 2013 – Paul Taylor Homes

It’s More Than New Forms | It’s A Process Change

TILA-RESPA Integrated Disclosures

www.alta.org/cfpb

TILA-RESPA Integrated Disclosures ALTA Model Settlement Statements

Developed to bring standardization Help meet state regulator requirements to accurately show

costs Not meant to replace Closing Disclosure Available in Excel, Word or PDF format Four versions available

Borrower/Buyer Seller Combined Cash

Federal Regulators Remind Lenders of Their Liability and CFPB Enforcement ActionsThe Message

○ Lenders are responsible and liable for acts of third party providers that harm consumers

○ Lenders worried about risk Title/settlement agent typically last consumer touch point Want to be confident consumer leaves with good experience

Regulatory Environment

ALTA’s Best Practices

Created in response to regulatory Created in response to regulatory pressure to help as many companies pressure to help as many companies

as possible compete in the marketas possible compete in the market

Best Practices Lender Support

Wells Fargo letter to settlement agent 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.”

BankcorpSouth, IBERIABANK, Trustmark Requires independent, third-party certification to ALTA’s Best Practices

SunTrust Self assessment of ALTA’s Best Practices

www.alta.org/bestpractices

Best Practices

Self-assessment vs. Third-party Certification?Be proactiveTalk to lenders and understand their needs

○ Make sure there are no barriers to business relationship

Completing self-assessment good first step○ Will show any deficiencies a firm may have in being compliant

NCLTA and the NCBAImportant Partnership Representing Settlement Industry

Best Practices Assessment

Readiness Guides Guides for each pillar Series of simple questions

about the firm’s practices and procedures

Suggested reviews or testing Collect Best Practice

materials via appendices Member benefit/Subscription

available to non-members

www.alta.org/bestpractices

Best Practices Compliance Management Report

Standardized, 32-page report Customizable: Add firm name and logo Complete and provide to lender to show compliance Member benefit/Subscription available to non-members

www.alta.org/bestpractices

Best Practices Elite Provider Program

Help title and settlement companies implement the Best Practices

Comprised of service providers committed to offering comprehensive benefits to the title insurance and settlement services industry

Elite Providers provide effective solutions for ALTA members’ critical needs

Discounts offered to ALTA members

www.alta.org/elite

ALTA Universal ID Purpose

Response to market needs Lenders increasing oversight of

third-parties Help lenders, vendors identify

settlement agent across industry databases

What You Should Do Update firm record Learn your Universal ID Make updates now

www.alta.org/universalid

Take Charge of Take Charge of the Consumer the Consumer ExperienceExperience

1) Communicate Early with Homebuyers

2) Talk about the Benefits to the Insured (not the work you do)

3) Monitor and Follow-Up on Complaints

Communications

Things You SHOULD Do DO provide more information to

professionals (lenders, real estate agents and attorneys)

DO help people understand that title insurance protects from defects that could come up (cite examples: fraud, missing heirs, unfiled liens, etc)

DO provide examples of how title insurance protected consumers

DO use plain language about protecting property rights, peace of mind and confidence for homeowner

Message Research Campaign

Title Insurance Education E-Kit

Content Exclusive to Members Help members educate consumers, real estate

agents, lenders, the media and others about the value of title insurance

Information in a variety of formats that can be easily downloaded and used by members Homebuyer presentation Videos Education articles and blog content Social media content Brochures

www.alta.org/ekit

ALTA Primer

108 years old Governed by 11 member board

consisting of agents and underwriters Creates our policy forms and

endorsements

ALTA is About You and Your Business!

Record Membership

www.alta.org/membership

ALTA & Real Estate Attorneys Special Membership Category $250 for individual attorney 15% of ALTA’s members are Real

Estate Attorneys Includes subscription to Title Law

Quarterly with information on key lawsuits affecting the industry and developments in real property law.

National Title Professional

Wendy S. Gibbons Esq., NTP

Purpose Designation recognizes professionalism and

raises awareness of value nationally

Qualifications and Requirements State certification/designation coordination Three-year renewal 38 designations awarded through 2014

www.alta.org/ntp

Industry News TitleNews

Monthly print magazine Mix of ALTA and industry news

Digital TitleNews Emailed every month Exclusive video and audio

features Can easily forward to staff and

clients

TitleNews Online Emailed every Tuesday and

Thursday Mix of ALTA and industry

news

News You Can Use Daily morning email Compilation of top headlines

from around the countryWant to reprint content in your publication?

Email [email protected]

Industry News ALTA Blog

Posts on various topics Heavy focus on aspects

about CFPB TRID rule Can comment on posts Subscribe to blog to receive

updatesblog.alta.org

Title Topics Free monthly hour-long

webinars on topics impacting the title industry

Average 500+ attendees Presentations recorded and

archived

www.alta.org/titletopics

Social Media

Twitter twitter.com/altaonline

Facebook facebook.com/altaonline

LinkedIn linkedin.com search for the group American Land Title Association

Pinterest pinterest.com/altaonline

YouTube youtube.com/altavideos

Your Participation Counts Title Action Network

Nearly 11,000 members Quick and easy to join Focused on ensuring state and federal legislators

understand value of the land title industry Won’t clog your email or take up your time Easy-to-understand and provides brief advocacy

updates on issues important to you

Join at www.titleactionnetwork.com

“Like” us on Facebook! www.facebook.com/titleactionnetwork

Your Participation Counts Congressional Liaisons

If we don’t do it, nobody will Professionals whose goal is to educate members of

Congress about the importance of our industry Important to identify and capitalize on relationships

ALTA members have with members of Congress Get involved with ALTA’s Policymaker Liaison

initiative Contact Awesta Sarkash at [email protected]

Your Participation Counts Title Insurance 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

2014: Raised $460,535 (goal was $425,000) 2015 goal: $475, 000 North Carolina has raised $580 in 2015 compared

to $3,970 in 2014 Contact Jessica McEwen at [email protected]

Advocacy Priorities Congressional oversight of the

CFPB’s integrated mortgage disclosures TRID implementation Regulatory relief / improve how

CFPB works with ALTA members: Small business advisory board Advisory opinion process Reform bulletins, press releases

& enforcement for clear guidance

Reform CFPB

Advocacy Priorities Reform the GSEs Oversight of the Federal

Housing Administration Clear title report Condo rules/eligibility Finalize & align private transfer fee

rule w/FHFA

Advocacy Priorities Reform the Tax Code

Capital gains exclusion on sale of principal residence AND/OR deductibility of state & local real property taxes

1031 exchanges NFIB coalition on small business

issues Minor IRS reforms (1099s; tax liens;

Forms: 2848, SSN, release of tax forms, use of tax forms, interest earned)

NAIC Data Calls (D.C.) Help on TRID

Economic Drivers Homebuyer/Seller Trends

Millennials Lead the Charge Think About How to Position Your Firm

to Reach New Buyers