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Managing Change:Major Issues Facing the Industry and the Opportunities That Exist

Steven G. Day| Treasurer of ALTA | Fidelity National Title Group | steven.day@fnf.com

Market Drivers

Compliance/Regulatory Environment

Consumer Protection

Economy

ALTA Goal Help industry understand these pressures and

navigate the changing landscape

Dodd‐Frank Act

Congress Makes Sweeping Responses to Crisis Industry Left Picking Up Pieces

Major Components of Legislation○ Created Financial Stability Oversight

Council

○ Reformed mortgage, securitization and derivative markets

○ Established Consumer Financial Protection Bureau

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CFPB

Different Type of Agency: Consumer Cop Purpose: “Protect consumers by

carrying out federal consumer financial laws.”

Concerned about financial transactions at a household level

CFPB consumer complaint portal

Enforcement actions

Mandate 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 Regulators Targeting perceived low-hanging fruit

Cordray 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

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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

That’s Just an Appetizer …

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

TILA‐RESPA Integrated Disclosures

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Be aware of the processchange

Address shopping list

Set the right expectations

Check title fees

Data accuracy is paramount

Run tests with lenders

Understand staffing needs

www.alta.org/cfpb

TILA‐RESPA Integrated Disclosures

Inaccurate Disclosure of Title Policy Fees The Problem: When both a loan and owner’s title insurance policies

will be purchased in a transaction (called “simultaneous issuance”) the rule requires the lender or settlement agent to inaccurately disclose the title premiums on the Closing Disclosure

Why is this a problem? In roughly half the states, a consumer is entitled to discount on loan title insurance policy when an owner’s policy will be simultaneously issued

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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

TILA‐RESPA Integrated Disclosures

Uniform Closing Dataset Joint effort by Fannie and Freddie to standardize the

underlying data required by the new Closing Disclosure 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 rule Needed to continue to doing business with lenders selling

loans on secondary market

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TILA‐RESPA Integrated Disclosures

DVD Training Appropriate for owners, managers and employees

Where we’ve been & how we got here

Detailed walk through Loan Estimate & Closing Disclosure

2½ hours of training

Model presentation for talking with your customers about the rule and changing roles & responsibilities

Order at www.alta.org/lti/tridtraining

Federal Regulators Remind Lenders of Their Liability and CFPB Enforcement Actions The 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 pressure to help as  many companies as possible compete in the market

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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 proactive

Talk 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 company may have in being compliant

Best Practices

Assessment Readiness Guides Guides for each pillar

Series of simple questions about the company’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

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Best Practices

Compliance Management Report Standardized, 32-page report

Customizable: Add company 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 company record

Learn your Universal ID

Make updates now

www.alta.org/universalid

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Take Charge of the Consumer Experience

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 Message Research

Campaign Critical to educate consumers

about title insurance and the work performed

Significant confusion about title insurance

Early education has quantifiable impact

Homebuyers want info about title insurance early in the process

Key positive messages include “protects your financial investment for as long as you own your home” and “one-time fee”

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

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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

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Member vs. Licensee

National Title Professional

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

Ohio All-Stars at ALTA Tim Evans

James Stipanovich

John Voso Jr.

Michael Holden

Mark Bennett

Alison Gareffa

Michael Maniche

Donald McFadden

Jim Hewit

Samuel Halkias

Robert Schmitz

Adam Saad

Patrick Kearney

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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 country

Want to reprint content in your publication? Email communications@alta.org

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

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ALTA Land Title Institute

Expanded CE/CLE Offerings Additional states including Iowa, Oregon and

Washington

Learn from Home CE/CLE hours available

Increased states

Title 101, 201 Courses Updated versions expected in 2015

New versions include learning objectives, chapter conclusions, quizzes

www.alta.org/lti

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

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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 awesta@alta.org

Congressional Liaisons – 138 Individuals 

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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

OH has raised $12, 710 so far this year

Contact Jessica McEwen at jmcwen@alta.org

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

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Advocacy Priorities Reform the Tax Code

Capital gains exclusion on sale of principal residence AND/ORdeductibility 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

Economic Drivers Homebuyer/Seller Trends

Millennials Lead the Charge

Think About How to Position Your Company to Reach New Buyers

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Homebuyer/Seller Trends