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Conestoga Title Insurance Co.
WAGONLODE
A Land Title Update
2016, Vol. IV, No. 4
Fourth Quarter 2016 If it seems that you just received a WagonLode in your Inbox, you did. Much has happened in the last 45 days, however; we hope that we have recollected it here and made a few projections for 2017 for the title industry. In a lighter vein, you will find a Christmas ‘wish list’ for title insurers and agents. For those who have an operations manual based upon the ALTA Best Practices pillars, Don Delgado has digested the new offering from ALTA, which is its Best Practices Maturity Model. This program is a self-test of the currency and compliance of your Best Practices policies and procedures. For next year? Where to begin? Jonathan Markel has sifted through the many articles from the sayers of sooth to give you as comprehensive a view of the market for next year as can fit in these few pages. Some things jump out: Where are interest rates going? What is the future of the CFPB? What about Fannie and Freddie? How will a successful heart surgeon (who said he was not qualified to be Surgeon General) perform as Secretary of HUD? Finally, do not forget that Conestoga College
is right around the New Year’s corner. If you have not seen the initial email blast about the seminar, please contact anyone here and it will be sent to you. More on the College is inside. And, to you, my personal wishes for a Happy Holiday and a prosperous New Year. Ed. Table of Contents President’s Message p. 2 Underwriting Wish List p. 3 Agency: ALTA Maturity p. 4 Claims Department p. 5 Marketing p. 6 Conestoga College p. 7 Reminder for Year End p. 9 Industry News p. 9 Underwriting Topic p.11 Employee Spotlight p.12 Corporate Data p.12
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From the President’s Desk It’s the Happiest/ Busiest Time of Year
John M. Nikolaus, CLTP December in the title business normally brings a spike in business and we anticipate that this year will be no different! There is a rush to close both residential and commercial transactions. Title agents and approved attorneys look forward to ending the year on a high note. At Conestoga Title, we appreciate the continued attention to detail at such a busy time of year. Conestoga College planning is another reason that December is a busy month at Conestoga Title. We will hold our 31st session of our annual seminar on January 16 & 17, 2017. We have compiled a powerful agenda and look forward to hosting a capacity crowd at the seminar. The agenda includes current, vibrant topics which are outlined in the Agenda that can be found later in this publication. In addition to our own legal staff, presenters include ALTA counsel, Wells Fargo representatives and other seasoned title industry experts. We highly encourage your attendance at our upcoming seminar. Registration is now open. If you have not yet received registration materials, feel free to contact Colleen Sheerin at [email protected] or (800) 272-6535. In addition, stay tuned throughout 2017 as we will also be providing educational opportunities in Maryland, Virginia and Ohio.
As the holidays draw near and 2016 comes to a close, I would like to express my appreciation to all of our loyal agents and approved attorneys. We appreciate your commitment to Conestoga and are proud to serve as your title insurance underwriter. Together we protect the property rights of our policyholders. May all of you and your families enjoy a happy holiday season and a healthy and prosperous New Year!
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Underw riting Corner A Christmas Muse
William J. Parker, Vice President, Claims & Underwriting
I was reading the other day about the effect of the Christmas season on real estate. As usual the so called experts are split on whether “the happiest time of the year” was good or bad for the real estate business. It talked about real estate professionals and what they want for Christmas. I realized that the same could be applied to title agents and underwriters. So with Best Wishes for the holiday season, I submit the following: 10 Things Title Agents (and Underwriters) Really Want for Christmas
1. For "foreign investors with big deals and cash accounts" to lose my email address.
2. For lenders and clients to stop writing emails in all CAPS. 3. For clients and prospects to stop no-showing for appointments. 4. For Wine. Lots and lots of wine (or other beverage of your liking).
5. For a regularly scheduled nap time with the full understanding and compassion from all clients.
6. For more weekends off. 7. For everyone to respect each other's time. 8. For more catered lunches. 9. For more people to understand what we do.
10. For the public to watch HGTV for entertainment purposes only . . . kind of like Professional Wrestling.
Happy Holidays!
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Agency Admin and Audit ALTA Adopts Best Practices Maturity Model
Don Delgado, Vice President, Agency Administration
In January we issued Memo 16ALL01 to provide guidance on ALTA Best Practices Certification. Understanding that many companies are able to demonstrate compliance with some, but not all of the seven pillars, ALTA formally adopted an ALTA Best Practices Maturity Model in October 2016. The Maturity Model is an alternative way to determine how a company’s procedures measure against ALTA’s Best Practices. It allows companies to identify exactly where they stand in relation to full compliance by using five different benchmark levels of compliance as noted in the chart to the right. The Maturity Model utilizes a report card with seven tables (one for each pillar) that highlight the Best Practices standards. Agents are given one of the five benchmark levels for each standard. There is also space in the tables to describe the progress plan for standards that are not graded as Optimized. Prior to adoption of this Maturity Model, companies that did not have a third-party certification letter had no method for demonstrating their progress towards full compliance. This is a great new tool for title and settlement companies as well as lenders who require documentation of Best Practices compliance. Please visit ALTA’s Demonstrating Your Compliance page (http://www.alta.org/best-practices/compliance.cfm) for additional information and advice on how to use this new tool.
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Claims Corner 2017 Conestoga College: Claims Topic Preview
Joseph John Kambic, Vice President, Claims & Recovery
I predict: No claims made
The date is January 17, 2017, the time
is 8:30AM, and the presentation is entitled “Claims and Fraud Schemes.” The event is the 2017 Conestoga College and the location is the Eden Resort in Lancaster, Pennsylvania.
The one hour program will start off with data on Claim Trends and Statistics. Similar information has been presented by me in most of the Conestoga Colleges at which I have presented. Has 2016 seen any changes in the trends observed in prior years including the source of most claims? What types of mistakes were seen in claims that were presented in 2016?
From there, the hour will naturally transition to one of the often seen agent errors, which is those errors associated with proofreading (or not proofreading!) legal descriptions. Six claims from 2016 have been chosen for review. This portion of the presentation will involve active participation by attendees in spotting the mistakes in the legal descriptions and evaluating their significance.
After that we move to a review of four specific claims received by Conestoga in 2016.
The first is entitled the “Unidentified Deed Grantor,” in which claim a Corporate Trustee conveyed property, but the Claimant reported that the Deed was executed by an individual with no evidence of authority to convey the property on behalf of the Trust. This claim will be followed by a “Title Claim or Estate Matter?;” then the “Value of Agent File Retention and Cooperation;” and ending with “Land Locked with No Right of Way.”
The program concludes with what I think is the most valuable portion of the presentation, that is, “Fraud Schemes and Scams Reported in 2016.” These are frauds that were reported to and investigated by the FBI and other law enforcement agencies in 2016. You may be surprised to learn that your cell phone, laptop and computer are NOT as secure as you might think. Suggestions will be offered from diverse sources on how to protect your devices (including EUROPOL EC3). The information provided in this portion of the presentation will, hopefully, protect you personally and your business from cyber fraud.
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Marketing M inute Some Housing Predictions for 2017
Jonathan Markel, Regional Agency Representative
The year 2016 proved to be a hot one for real estate. Home values, prices and sales showed some of their strongest numbers since before the economic downturn a few years ago. Interest rates remained historically low resulting in continued strong refi activity. As we inch closer to the New Year, what can we expect for the housing market in 2017?
According the Mortgage Bankers Association, full-year overall originations are expected to fall from $1.891 trillion in 2016 to $1.584 trillion for 2017. The 2017 outlook was reduced from $1.629 trillion. The nation’s mortgage bankers have grown less optimistic about the volume of refinance originations for 2017. “We expect that refinance volume will most likely be much lower over the next few years as homeowners have repeatedly had the opportunity to lower their rates, and there will be fewer households with an incentive to refinance if the rates follow the path we are projecting,” Michael Fratantoni said (MBA’s Chief Economist).
Interest rates are expected to rise gradually in 2017. A few factors that will raise rates include expected FED rate hikes and the results of the November Presidential election. If President-Elect Donald Trump succeeds in obtaining a reduction in U.S. corporate tax rates or impacts policy to improve business, stocks are expected to rise. And if stocks rise, funds will be pulled out of the bond market, causing interest rates to rise (in order to attract equity back to bonds). Do not expect a huge increase, however. Most experts have 30-year rates hovering around the 4.5 to 5.0% range by the end of 2017.
Despite an expected drop off in refi activity, the MBA forecasts $1.1 trillion in purchase mortgage originations, which will be an 11% increase over 2016. According to Fratantoni, “Strong household formation coupled with further job growth, rising wages, and continuing home price appreciation will drive strong growth in purchase originations in the coming years.”
It is evident that we are looking at a “sellers’ market” in the years ahead. The National Association of Realtors (NAR) predicted existing home sales will reach 6.0 million in 2017, an increase from this year’s forecast of 5.8 million. The MBA, and Fannie and Freddie have all made similar predictions. Expect a huge wave of Generation Yers (Millennials), who have delayed home buying in recent years, will help spur this strong sale market. Lawrence Yun, Chief Economist of the NAR, is very optimistic that housing demand will include leading-edge millennial households finally dipping their toes into the market. According to Yun, “The housing market over the next couple of years should get a big lift in demand from these new buyers. The one caveat is it’s essential that there’s enough new existing supply at entry-level prices for them to reach the market.”
In conclusion, expect a strong sale market in 2017 with slower refi activity (especially as rates gradually rise).
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Conestoga College 2017 January 16-17, 2017
Lancaster, Pennsylvania Our thirty-first annual session of Conestoga College will be held January 16 and 17, 2017 at the Eden Resort & Conference Center, 222 Eden Road, Lancaster, Pennsylvania. This program is open to all Title Agents and Attorneys. You, your associates and your employees are cordially invited to join us.
We encourage you to register early as available seats for the program will be taken quickly. As the Agenda that follows indicates, this will be a dynamic seminar. In addition to claims and underwriting topics, we will have an industry leader speaking on cyber security and cyber security insurance. The highlight of the day-and-a-half program will be the presentations and panel discussion including compliance officers from Wells Fargo and the Senior Counsel from the American Land Title Association. Conestoga has also invited the CFPB to join the panel. Attorney Brian Zulli, the current President of the Pennsylvania Land Title Association, will moderate. Other topics to be covered during the seminar include easements, right of access, surveys, and recent claims’ history.
Making it to Conestoga College 2017 will be worth the trip
The Pennsylvania Land Title Institute will handle registration and attendance records for the
CE/CLE accredited program. We have applied for both CE and CLE credits in Pennsylvania, CE credits in New Jersey and Maryland, and CLE credits in New York.
If you need further information and/or registration materials, please contact Colleen Sheerin at
Conestoga Title. She may be reached by email ([email protected]), fax (888-316-7236), or regular mail (137 East King Street, Lancaster, PA 17602).
If you need overnight accommodations, the Eden Resort has reserved a block of rooms for Conestoga College attendees. You may call the Reservations Department at the Eden Resort at (866) 801-6430 or online. Please mention code 1257704 to obtain a lowered rate for registrants.
Please note that the attached Agenda does not include meals or breaks in order to show only content.
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AGENDA SESSION 1 JANUARY 16, 2017
8:30 A.M. OPENING REMARKS JOHN M. NIKOLAUS, CLTP, PRESIDENT, Conestoga Title Insurance Co.
8:45 A.M.
EASEMENTS: A PRIMER GREG B. EMMONS, ESQ., FRIEDMAN SCHUMAN, P.C.
10:00 A.M.
HOT TOPICS IN TITLE INSURANCE CLAIMS LAUREN P. MCKENNA, ESQ., Fox Rothschild LLP
11:15 A.M. CYBER FRAUD & CYBER SECURITY INSURANCE KAITLIN KELLY, FRAN KELLY PROFESSIONAL INSURANCE
1:30 P.M.
BEST PRACTICES AND TRID UPDATES STEVE GOTTHEIM, ESQ. AMERICAN LAND TITLE ASSOCIATION KATE STEINEMAN & LINDSEY ANDERSON, WELLS FARGO BANK, N.A. R. MICHAEL SMITH, ESQ – VP UNDERWRITING, CONESTOGA TITLE INSURANCE
2:30 P.M. CFPB/TRID/BEST PRACTICES: PANEL STEVE GOTTHEIM, ESQ. AMERICAN LAND TITLE ASSOCIATION KATE STEINEMAN & LINDSEY ANDERSON, WELLS FARGO BANK, N.A. R. MICHAEL SMITH, ESQ – VP UNDERWRITING, CONESTOGA TITLE INSURANCE MODERATOR: BRIAN N. ZULLI, ESQ. PENNSYLVANIA LAND TITLE ASSOCIATION
3:45 P.M. 2016 UNDERWRITING TOPICS UPDATE R. MICHAEL SMITH, ESQ – VP UNDERWRITING, CONESTOGA TITLE INSURANCE WILLIAM J. PARKER, ESQ – VP UNDERWRITING & CLAIMS, CONESTOGA TITLE
SESSION 2 JANUARY 17, 2016 8:30 A.M.
CLAIMS AND FRAUD SCHEMES JOSEPH J. KAMBIC, ESQ., VP Claims & Recovery, Conestoga Title Insurance
9:45 A.M.
ACCESS, RIGHTS-OF-WAY, AND INGRESS/EGRESS R. MICHAEL SMITH, ESQ., VP Underwriting, CONESTOGA TITLE INSURANCE CO
11:00 A.M.
SURVEYS AND TITLE INSURANCE WILLIAM J. PARKER, ESQ., VP Underwriting and Claims, Conestoga Title
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Circling the Wagons Industry News
Request to All Conestoga Title Insurance Co. Agents As President John Nikolaus advised all Conestoga title insurance issuing agents and approved attorneys by letter dated December 5, 2016, the company’s accountants have requested that all unreported premiums be remitted by Friday, December 30, 2016. Your cooperation in this will assist the company in meeting its reporting requirements promulgated by the Pennsylvania Insurance Department and other regulators. If you have questions or concerns about this, please contact anyone at Conestoga Title. John’s letter concluded with this message, in which all of us at Conestoga Title share: “We thank you for your business and your prompt reporting of policies and premiums throughout the year. We wish you the best for a happy holiday season and a prosperous year in 2017!”
Honus has loaded the Conestoga wagon with end of year agency reports
About those interest rates … Back on page 6 there is a chart showing various mortgage industry organizations’ predictions for interest rates. For the final quarter of 2016, they gave a range between 3.5 and 3.8 percent (3.5% -- 3.8%). As of December first, according to FHLMC, the average thirty year fixed rate mortgage stood at a rate of 4.08% which is above all the projections (including its own of 3.6%). In further news to anticipate, there is a Federal Reserve Board meeting this month, at which time economic pundits claim there is 100% assurance the Board will raise the fed discount rate to member banks. And, in the ‘Go figure’ category, the Wall Street Journal has an article in its December fourth issue titled “Credit Restrictions Cost Home Buyers 'Deal of a Lifetime'.” The thesis, apparently, is that while rates were historically low, lenders made credit more difficult to obtain. Now that rates are rising, watch the lenders loosen the strings, making more profits in the near term (and risking bad loan losses down the road?). About those Presidential Cabinet appointments … As President-Elect Donald J. Trump releases the names of nominees for the Cabinet posts most closely associated with our industry, there is a common trait among them: They all come out of the securitization side of the mortgage industry (with one exception). First, although not a member of the Cabinet, Mr. Trump is not going to push Janet Yellen into resigning from her position as Chairman of the Federal Reserve Board (even though during the election campaign he seemed to have her targeted). Nominated for Secretary of the Treasury is Steve Mnuchin, formerly with Goldman Sachs (as were Robert Rubin and
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Henry Paulsen) and he was also CEO of OneWest, successor to IndyMac FSB. After he stated on Fox Business News that he would seek privatization of Fannie and Freddie, their stocks soared 30% in less than 48 hours. The Department of Commerce will see Wilbur Ross as Secretary. His own investment firm (WL Ross & Co.) was involved in the sale of Homeward Residential Holdings to Ocwen Financial in 2012. And there is also the nomination of Ben Carson, famous neurosurgeon and GOP candidate for President, as Secretary of Housing and Urban Development. No one knows what to expect from him at HUD as he has no background in housing policy. [Dr. Carson’s spokesman related that "Dr. Carson feels he has no government experience, he's never run a federal agency. The last thing he would want to do was take a position that could cripple the presidency."] Anyone been watching Designated Survivor with Kiefer Sutherland (not Jack Bauer) on ABC? And in other post-election political news Both the President-Elect and the Chairman of the House Financial Services Committee (Jeb Hensarling, R-Tex) have openly stated that regulatory rollback is needed in the financial services industry, especially the Dodd-Frank Act. Also, they have declared open season on the CFPB and its Director, Richard Cordray. Until the legislation is changed, Congress cannot do anything to the Director, but, as President, Mr. Trump may well hold a power to dismiss Mr. Cordray. Could the words he made famous on The Apprentice (You’re fired!) be his first official pronouncement? Changes to any underlying statutes, however, do have to pass a Democratic filibuster in the Senate; nevertheless, the Senate majority may return to the simple majority rule which it abhorred when used by the Democrats to assure passage of the Affordable Care Act.
Do keep your eyes on what income tax ideas come out of the new Administration. Despite the fact that it would seem to be a political nonstarter, there are rumors that the financial think tankers advising Mr. Trump are suggesting that lower tax rates are more valuable to the average citizen than the mortgage interest deduction.
Avalanche The U. S. Computer Readiness Team has posted links that will allow you to check your computer system for corruption by the international cybercriminal “Avalanche” organization. Copy and paste this into your browser: https://www.us-cert.gov/ncas/alerts/TA16-336A. Thirty countries were involved in the investigation of the activities of this group, effectively an arms dealer for cyberwarfare.
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Underw riting Topics Access: A Conestoga College Topic
R. Michael Smith, Vice President, Underw riting Right of access is a significant issue for title insurers and insureds. What follows here is a part of the topic I will present at Conestoga College 2017 on access and rights-of-way.
“Access” is one of the rights of ownership of real estate. It is the “right vested in the owner of land which adjoins a road or other highway to go and return from his own land to the highway without obstruction.” Black’s Law Dictionary, Rev. 4th Ed., 1968. A right of access includes the privilege of normal use of that to which access is provided – e.g., to travel upon and over the highway once accessed. The right of access was expanded in a practical way in the Twentieth Century by a highly mobile society increasingly dependent on automobiles. The title insurance industry, also, has proposed coverage that addresses the needs and expectations of the insured as to “lack of a right of access.” See Covered Risk # 4 in the ALTA 2006 owner’s and loan policies.
Land that lacks direct access to a public thoroughfare or indirect access to same via a private ingress/egress easement has a flawed title. The title to such land is so impaired as to be tantamount to an unmarketable title:
…(T)here are few title problems that are more palpable than complete lack of access to a public road. When property completely lacks such access, it is usually held that its title is unmarketable, apparently on the ground that the purchaser would be subjected to the risk of a lawsuit to establish an easement by necessity in order to gain a right of access…
Stewart Title Guaranty Company v. West, 110 Md. App. 114, 676 A.2d 953, 965 (Md. 1995). A lack of a right of access, then, can implicate one of the policy’s other insuring clauses; that is, the title being unmarketable. The title insurer, however, is under no obligation to insure affirmatively that there is specific access to a specific road. See, e.g., Phrazer v. Lawyers Title Insurance Corp., 508 So.2d 731 (Fla. App. 1987).
If there is no legal access to the property at the date of policy, the insured has (or will have) a compensable loss. At a minimum, the title insurer will have to establish a right of access by a court order or purchase an easement for ingress and egress in order to establish title as stated in the policy. Even if the insured had actual knowledge of an impending loss of legal access antedating the policy date, the underwriter would still be liable under the policy. See, L. Smirlock Realty Corp. v. Title Guaranty Co., 418 N.E.2d 650 (N. Y. 1981), subsequent appeal, 469 N.Y.Supp.2d 415 (N. Y. 1983).
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Employee Spotlight Laurie Wentland
Laureen (Laurie) Wentland joined Conestoga Title in early November 2016 as Virginia Agency Representative. Her primary role will be to support and grow Conestoga’s base of independent title agents in the Old Dominion. Prior to joining Conestoga, Laurie spent several years with reQuire LLC and Final Trac LLC (which was acquired by reQuire). At the time of the acquisition, Laurie was living in Hartford, CT, but thereupon moved to Virginia Beach and subsequently to Northern Virginia. At reQuire and Final Trac, she was involved in both sales and operations of those lien release companies. Laurie obtained a B.S. in business admin cum laude from Post University and then entered the mortgage world. She has originated mortgages and managed a bank’s REO department. The Hartford Insurance Company also employed her for fourteen years. While there, she was an operations manager and a program manager for the company’s Data and Process Analytics,
which involved change management and education of other managers. In her free time, Laurie likes to run, read, and sew, although probably not all three at the same time. After you meet her, however, you may well think that she can. And, just so you are forewarned, she holds a Lean Six Sigma Green Belt certification. That is not a martial arts level but an IT certification. Please join us in welcoming Laurie Wentland to Conestoga Title!
Laurie Wentland
Conestoga Title Personnel Contact Information Position Direct Dial Other Direct E-mail Adam Kossove Direct Dept. Account Executive 717-431-2775 800-257-9414 [email protected] Bill Parker Underwriting & Claims Counsel 717-735-7083 800-861-9414 [email protected] Colleen Sheerin Marketing Assistant 717-431-2764 800-272-6535 [email protected] Don Delgado Vice President/Agency Admin 717-431-2752 800-724-0935 [email protected] Doug Riggin Sales Manager 717-431-2781 800-257-4176 [email protected] Jill Funk Agency Support Administrator 717-431-2788 800-672-2985 [email protected] Joe Kambic Claims & Recovery Manager 717-431-2783 800-257-5217 [email protected] Joel Angelo Agency Auditor 717-431-2784 800-830-9031 [email protected] John Nikolaus President 717-431-2763 800-272-3570 [email protected] Jonathan Markel Regional Agency Representative 717-431-1260 844-509-0490 [email protected] Laurie Wentland Virginia Agency Representative 540-226-3755 [email protected] Michael Smith Underwriting Counsel 717-735-7082 800-861-9352 [email protected] Patti Reese Executive Assistant 717-431-2755 877-502-5157 [email protected] Rebecca Breault Claims Paralegal 717-286-2347 800-478-8630 [email protected] Robin Wolbert Senior Accountant 717-431-2772 800-257-1966 [email protected] Sheryl Childs Policy Administrator 717-431-2785 800-257-7921 [email protected] Susan Anderson Paralegal 717-431-2757 877-502-5158 [email protected] Tom Gallagher CFE Agency Audit Manager 267-227-2433 [email protected]
