the path forwardtrid (know before you owe) 2. best practices 3. communicating with homebuyers 4....

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THE PATH FORWARDALTA’s Strategic Priorities to Advance the Industry

Bill Burding| EVP/General Counsel| Orange Coast Title Company | [email protected]

Three Key Areas1. Why ALTA Exists2. What Will Industry Look Like in Five Years?3. ALTA’s Strategic Priorities

1. TRID (Know Before You Owe)2. Best Practices3. Communicating With Homebuyers4. Core Industry Values and Compliance5. Information Security6. Talent Focus and Business Basics

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ALTA Is The Meeting Point• ALTA exists for these main business purposes:

– To provide Advocacy for the industry– To Communicate and Educate the land title insurance and real

estate settlement industry and its members– To provide Networking opportunities– To set professional industry Standards

WHAT WILL INDUSTRY LOOK LIKE?

Innovation

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Relationships

Strategic Priorities

1. TRID (KNOW BEFORE YOU OWE)

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What We KnowMinimal consumer impact

– ALTA, NAR, Ellie Mae – Not seeing many delays; Closing times back to pre-TRID

Consumers are OK with the new forms– 92% of Consumers are Reviewing the Closing Disclosure Before

Settlement Most of the pain is internal

– No one way to comply– Pace of process change slowing– Technology needs to catch up

ALTA Survey: 40% of Consumers Confused

– 2,000 current or prospective homebuyers

– 14 questions aboutpreferences for learning about title insurance

– Shown CD using CFPB rule for disclosing title fees and then informed of actual cost

– Survey measured reaction– ALTA has offered a simple

way to fix rule

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TAN Members Dominate TRID Comments• 83% of TRID Comments to CFPB were from TAN members

– Asked the CFPB to correct the inaccurate disclosure of title insurance fees

– Stop lenders from shifting liability to settlement agents – Provide more guidance on sharing Closing Disclosures

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TRID Myth Buster• What You Need to Know When Sharing Closing Documents

– TRID DID NOT Implement Any Data Privacy Changes– Opportunity to Review Your Privacy Policies to Ensure They Match

Data-sharing practices• Gramm-Leach Bliley Remains Authority on How to Protect Data

– Privacy requirement– a requirement that all consumers be provided the opportunity to

opt-out of certain information disclosures– a requirement that measures be instituted to maintain the

"security and integrity" of all nonpublic information

What Should You Do?• Consider Requirements and Limitations of Privacy Policy

– ALTA Best Practices reiterate importance of privacy policies and include guidelines for companies to protect against data theft

• When Examining Privacy Policies, Consider:– Why did you initially implement this policy?– Does this policy continue to provide adequate protection to

sensitive data in today’s marketplace?– What information do you need to share with your real estate

partners?– How are you sharing this information?

ALTA Model Settlement Statements• Developed to bring standardization• Help meet state regulator requirements to accurately show costs• Doesn’t replace Closing Disclosure• Four versions available in Excel, Word or PDF

– Borrower/Buyer– Seller– Combined– Cash

www.alta.org/TRID

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What’s Next• Awaiting Final TRID amendments

– Expected to be finalized this summer– 83% of TRID Comments to CFPB were from TAN members

• ALTA Board Met With Cordray in January

• Prospects of Dodd-Frank Reform in Congress– Began in the House of Representatives in April– ALTA Focus:

• Fix TRID Title Fee Disclosure• Push CFPB to Provide Better Guidance• Turn CFPB into 5 member bipartisan commission

2. BEST PRACTICES

CFPB Responds to ALTA• Bureau Promotes ‘Flexibility’ for Third-party Service Provider

Oversight– ALTA had met with CFPB many times over the past four years and

submitted several letters– Bulletin published in Federal Register explain that a lender’s risk-

management program for service providers may be scalable depending upon several factors

– First time Bureau addressed the issue of scalability in a formal bulletin

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What Will Most Lenders Focus On?

• One-size-fits all approach not the expectation• More lender knows about a vendor, the better• Nobody expects perfection• Consumer choice important

Evolution of ALTA Best Practices

• Pillar 2• Pillar 3

• Pillar 4• Pillar 5

What’s Changed

Pillar 2• Utilize Positive Pay or Reverse Positive Pay, if

available in the marketplace, and have policies and procedures in place that prohibit or control the use of Automated Clearing House blocks and international wire transfers to protect against unauthorized transactions.

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Pillar 3• Companies must securely maintain and

dispose of records containing Non-public Personal Information pursuant to an established timeframe for retaining records, as documented in the Company’s information security program that takes into consideration the appropriate legal, regulatory, and business requirements.

Pillar 4• Maintain written procedures to help ensure

that any third-party signing professional—including Notaries Public—engaged by a title or settlement company possess the appropriate qualifications, professionalism and knowledge … determined by a mix of legal and contractual obligations.

Pillar 5• Title insurance policies are reported to the underwriter

(including a copy of the policy, if required by the underwriter) to meet applicable statutory, regulatory and contractual obligations, but not to exceed 45 days following the (i) date of Settlement, or (ii) date the terms and conditions of the title insurance commitment are satisfied.

• Title insurance premiums are remitted to the underwriter to meet applicable statutory, regulatory and contractual obligations.

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Tool Box

Maturity Model• Business Tool

– Measures company’s procedures against an established standard

– Maturity refers to strength of a company’s procedures and if they are followed consistently

– Benchmark levels

Ad Hoc Planning Defined Managed Optimized

Maturity Model

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Best Practices FAQ Portal• Allows interested parties to submit questions to ALTA about the

Best Practices to be answered on a public portal– Goal: provide consistent and reliable guidance about how to

interpret and implement the ALTA Best Practices– 15 FAQs answered as of May 1

• Visit the portal at http://www.alta.org/best-practices/faq.cfm

Resources• 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

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ALTA Registry• 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 at www.alta.org/my-account– Learn your Universal ID– Make updates now

www.alta.org/registry

3. COMMUNICATING WITH HOMEBUYERS

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Quotes from Focus Groups

“How long does it take to do a title search? I don’t think it’s a day. I think it’s an hour, two hours at best. And it’s all computerized.”

“My attorney chose my title company. That’s how they get their Yankee Tickets.”

“We don’t talk enough about the deductibles that are involved with title insurance. I mean, some of them are as high as $25,000 depending on what the defect is. And that’s huge.”

ALTA CONSUMER RESEARCHHomebuyers want more information

Early in the processSettlement Agents and Attorneys must

take control of the message Owner’s title insurance policy helps protect their property rights and their

largest investment

Internet

Realtors/Agents

Family members/Friends

Open houses

Newspapers

Flyers/Brochures

TV

Magazines

Radio

86%

74%

67%

62%

47%

40%

36%

32%

24%

86%of home buyers use the internet in the research

process

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B2B

B2C

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PROTECTYOURPROPERTYRIGHTS

homeclosing101.com

4444

Homebuyer Guide ResourcesMore than 60 useful tools!

Blogs Marketing One-Pagers

PowerPointPresentations

Rack Cards

www.alta.org/homebuyer

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www.homeclosing101.org

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4. CORE INDUSTRY VALUES

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VALUES ALLOW US TO PLAY OFFENSE

PRINCIPLES, BEST PRACTICES, COMPLIANCEARE DEFENSE

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1. Leadership: The courage to shape abetter future2. Collaboration: Leverage collective genius3. Integrity: Be real4. Accountability: If it is to be, it’s up to me5. Passion: Committed in heart and mind6. Diversity: As inclusive as our brands7. Quality: What we do, we do well

WHO AM I?

1. Leadership: The courage to shape abetter future2. Collaboration: Leverage collective genius3. Integrity: Be real4. Accountability: If it is to be, it’s up to me5. Passion: Committed in heart and mind6. Diversity: As inclusive as our brands7. Quality: What we do, we do well

WHO AM I?

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1. Deliver WOW through service

2. Embrace and drive change

3. Create fun and a little weirdness

4. Be adventurous, creative, and open-minded

5. Pursue growth and learning

6. Build open and honest relationships with communication

7. Build a positive team and family spirit

8. Do more with less

9. Be passionate and determined

10.Be humble

WHO AM I?

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1. Deliver WOW through service

2. Embrace and drive change

3. Create fun and a little weirdness

4. Be adventurous, creative, and open-minded

5. Pursue growth and learning

6. Build open and honest relationships with communication

7. Build a positive team and family spirit

8. Do more with less

9. Be passionate and determined

10.Be humble

WHO AM I?

1. Safety

2. Courtesy

3. The Show

4. Efficiency

WHO AM I?

1. Safety

2. Courtesy

3. The Show

4. Efficiency

WHO AM I?

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CRITERIA

Memorable Universal Enduring Aspirational

5. INFORMATION SECURITY

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40% of all cyber attacks target business with fewer than 500 employees.

Threats Are Growing Exponentially

Most of the Time You Won’t Know They Are There

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Its more than just data breaches• Business Email Compromise

– Variant of social engineering– Designed to trick people into providing sensitive information or performing certain tasks.

• Attempts redirect wire transfers • Obtain PII to file false tax returns

– According to the FBI, since January 2015, there has been a 1,300% increase identified losses

• Common signs– Open source e-mail accounts are predominantly targeted.– Spoofed e-mails very closely mimic a legitimate e-mail request.– Fraudulent e-mail requests for a wire transfer are well-worded, specific to the business

being victimized, and do not raise suspicions to the legitimacy of the request.– Victims report that IP addresses frequently trace back to free domain registrars.

How can I protect my business?• Accept that a breach/fraud will happen• Conduct a risk assessment• Take reasonable preventative measures• Provide training and tips to all staff on an ongoing basis• Develop and practice your response plan• Stay abreast of the latest trends

6. TALENT FOCUS & BUSINESS BASICS

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Help for the Hiring Process @ alta.org• Job Descriptions and Advertisement Library

– ALTA’s Education Committee Workforce Development Subcommittee partners with National Network of Business and Industry Partners

– Samples for various positions and relevant skills• Common Employability Skills

– normalizes the skills which workers may wish to develop in order to qualify for jobs across many different industries

Business BasicsImportance of Doing it Right• Lenders and Regulators will continue to expect accurate workDefend Your Current Business• Business disruptors come in where legacy industries are falling

short• Catching mistakes in the beginning protects your business from

disruptors