volume89_issue06

8/2/2019 Volume89_Issue06

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June 2010

Official Publication of the

American Land Title Association

Creation of a NationalTitle Agent Data Call


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www.alta.org > June 2010 > Title

Fau Dpam

16

Bu siNess sTr aTegies CoNfer eNCe

Business StrategiesConference Provides Gatewayto Future Success

With the economy still teetering onuncertainty and the industry dealing withthe new RESPA Rule, the conferenceprovides attendees information and tacticsto succeed.

20

sTaTe Pr ofi e

Indiana Land Title AssociationPresident: Jeff Bosse

22

TeChNo ogy Cor Ner

The Title Industry on Twitter:Now What?By Brian Rieger

There may be growing backlash againstsocial media as executives become burnedby time wasted with few business-basedresults.

26

r u NNiNg you r Bu siNess

New FHA Regulations CouldImpact Title Agents OrderChannel

The attempt to strengthen FHAsfinancial soundness may force many loancorrespondents and small mortgagees toexit the FHA loan market.

8

Cover sTor y

Creation of aNational Title AgeData Call

The goal of the ALTAmembers working withthe NAIC Title StatistPlan Working Group icreate a data call that issimple as possible, whilproving the industrys vproposition.

TtlNw vlm 89, Nmb 6

4

Calendar of Events

5

From the Editors Desk

6

ALTA News

28

Industry News

29

People on the Move

30

Inside ALTA

32

TIPAC Contributors

34

The Last Word

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itleNews > June 2010 > www.alta.org

PBLISHERKurt Pfotenhauer

EDITOR IN CHIEFJeremy Yohe

DESIGN/ELECTRONICPRODCTION MANAGER

Shawn Sullivan

PRESIDENTMark E. WinterStewart Title GuarantyWashington, DC

PRESIDENT-ELECTAnne L. Anastasi, CLTPGenesis Abstract, Inc.Hatboro, PA

TREASRERJohn HollenbeckFirst American Title Insurance Co.Santa Ana, CA

CHAIR, FINANCE COMMITTEEDiane EvansLand Title Guarantee CompanyDenver, CO

CHAIR, TITLE INSRANCENDERWRITERS SECTIONChristopher AbbinanteFidelity National Title Group

Jacksonville, FL

BOARD REPRESENTATIES,TITLE INSRANCENDERWRITERS SECTIONPeter Birnbaum

Attorneys Title Guaranty Fund, Inc.Chicago, IL

Robert ChapmanOld Republic National Title Insurance Co.Minneapolis, MN

CHAIR, ABSTRACTERS AND TITLEINSRANCE AGENTS SECTIONFrank PellegriniPrairie Title, Inc.Oak Park, IL

BOARD REPRESENTATIES,ABSTRACTERS AND TITLE AGENTSSECTIONHerschel BeardMarshall County Abstract Co.Madill, OK

Jack Rattikin, IIIRattikin Title CompanyFort Worth, TX

IMMEDIATE PAST PRESIDENTMichael B. PryorLenders Title CompanyLittle Rock, AR

Asso Aton oF F ers

CHIEF ExECTIE OFFICERKurt Pfotenhauer

SENIOR ICE PRESIDENTAND CHIEF OF STAFFMichelle L. Korsmo

DIRECTOR OF COMMNICATIONSJeremy Yohe

DIRECTOR OF EDCATION& TECHNOLOGKelly Romeo, CAE

DIRECTOR OF GOERNMENT AFFAIRSJustin Ailes

DIRECTOR OF MEETINGS

Cornelia Horner, CMP

Asso Aton stAF F

Members Call Toll Free: 800-787-ALTA Members Fa Toll Free: 888-FAx-ALTAisit ALTA Home Page: www.alta.org E-mail Feedback to: [email protected]

TitleNews is published monthly by theAmerican Land Title Association, Washington,DC 20036. .S. and Canadian subscriptionrates are $30 a year (member rate); $100 ayear (nonmember rate). For subscription infor-mation, call 1-800-787-ALTA.

Send address changes to TitleNews,American Land Title Association, 1828 LStreet, N.W., Suite 705, Washington, DC20036.

Anyone is invited to contribute articles,reports, and photographs concerning issuesof the title industry. The Association, how-ever, reserves the right to edit all materialsubmitted. Editorials and articles are notstatements of Association policy and do notnecessarily reflect the opinions of the editoror the Association.

Reprints: Apply to the editor for permissionto reprint any part of the magazine. Articlesreprinted with permission must carry the fol-lowing credit line: Reprinted from TitleNews,the monthly magazine of the American Land

Title Association.

2010 American Land Title Association


a Ta eveNTs

October 13-16 2010 AnnualConvention

San Diego, CA

sTaTe CoNveNTioNs

June 9 - 12 New Jersey

June 9 - 12 Pennsylvania

June 10 - 11 South Dakota

June 17 - 20 New England (CT,ME, MA, NH, RI, VT)

June 23 - 25 Texas

July 18 - 20 MichiganJuly 22 - 23 Illinois

August 5 - 7 Northwest(ID, MT, OR, UT, WA)

August 12 - 14 Kansas

August 15 - 18 New York

August 19 - 21 Minnesota

September 9 - 12 Dixie Land(AL, GA, MS)

September 9 - 11 North Dakota

September 12 - 14 Ohio

September 15 - 16 Nebraska

September 15 - 17 Colorado

September 16 - 17 Missouri

September 16 - 18 North Carolina

September 16 - 18 Indiana

September 22 - 24 Maryland

November 3 - 5 Florida

December 1 - 2 Louisiana

clnd

Jy Yh

Title Insurance IndustryFull of Hall of Famers

u

nless you are connected, you dont get many opportunities to meet a MajorLeague Baseball hall of famer. So, when I heard that baseball icon WhiteyHerzog would be speaking at the 2010 Business Strategies Conference, Igot a bit excited.

Conference attendees enjoyed Herzog, best known for leading the St. LouisCardinals to the 1982 World Series championship, share many baseball memoriesand offer anecdotes about his baseball career during the closing luncheon of theconference in St. Louis.

Herzog paid tribute to Casey Stengel, the legendary manager who won sevenWorld Series and three other American League p ennants with the Yankees. Iremember once Casey telling me that someday I would manage, he said. Hementioned he saw leadership qualities in me.

Herzog signed with the Yankees as a free agent in 1949 for $150 a month. In a spring training game in 1956, Mgot sick, and instead of changing the lineup, Casey put Herzog in Mantels third slot in the lineup. There was no I should hit third, but he didnt want to rewrite the lineup, Herzog said.

Facing Dodgers pitcher Carl Erskine, Casey called Herzog over and said, Tra-la-la. Unsure what he meant,Herzog checked back, and Casey once again said Tra-la-la. Still puzzled, Herzog went back to the batters boxlooking for a curveball. He hit a line drive that the second baseman caught. Casey came running up to Herzogscreaming See what I mean, t ra-la-la! Herzog said he went back to the hotel wondering what he was talking aboufinally figured out he was telling me to relax. He had his own language, and most of the time, it took you a day andhalf to figure it out, Herzog said.

Herzog may have offered some of the best advice when he said, You gotta hire for the right positions and whenpitcher throws the pitch, if youve got a good team on t he field, theyll do well. Guidance everyone can use in theiroperations.

As player, coach, scout, manager, general manager, director of player development and executive vice president,Herzog served baseball in many capacities. Listening to Herzog talk about baseball made me think of the manydedicated professionals in the title insurance industry. Most of you, like Herzog in baseball, have handled multiple functions throughout your careers.

While we were graced by a baseball icon sharing his stories, lets not forget that you all are hall of famers of the reestate transaction. You are the industry that works behind the scenes getting complicated deals closed every day. Sh

your story and let everyone know the valuable role you play in the mortgage process and overall health of the econo

from the editors desk


4/19


ALTA news


ALTA news

ALTA reported that

membership is at an all-time

high and has increased

more than 60 percent since

1999. ALTAs membership

now stands at 3,429. Of

all members, small agents

comprise nearly 90 percent

of association membership.

Membership among small

agents stands at 2,885, up

from 2,732 last year.

Despite the sluggish

economy over the past

three years, professionals in

the title insurance industry

understand the value of

association membership,

said Kurt Pfotenhauer, chief

eecutive ofcer of ALTA,

during the associations

Business Strategies

Conference in St. Louis. Its

with this increased support

from our members that we

strengthen the advocacy

of the land title insurance

industry that legislators,

regulators and other

policymakers have come to

know and respect.

Amica Lad til Aciairp rcd Mmbhip

We know your time is

valuable and resources are

spread thin during these

difcult economic times,

but its more important than

ever for ALTA members to

continue participating on

ALTA volunteer committees.

The old saying the more

you put into something,

the more you get out of it

really does apply to ALTA

membership. With ALTA

membership at an all-time

high, we have a fabulous

opportunity to continue

cultivating supporting for

our valued committees.

Members frequently site

their active participation on

ALTA volunteer committees

as the place theyve learned

the most, and where they

have had the opportunity to

help shape the future of the

title industry. Not to mention

the life-long friendships they

have developed through

their participation. Some

committees travel, while

others dont require you to

leave your ofce. There truly

is something for everyone.

If you have a special area

of epertise (real property

records, claims, international

development or industry

technology, for eample),

or if you have a special

area of interest (such as

membership, government

affairs, public relations,

research or employee and

professional education,

to name a few), there is a

committee on which you

can volunteer to serve. ALTA

has 27 committees for you

to consider.

The ALTA president-

elect makes all committee

appointments in the late

summer for a term beginning

after the Annual Convention

in October. The deadline to

submit your name is July 2.

When individuals attempt

to take on large tasks on

their own, success can

seem daunting, said

Anne Anastasi, ALTA

president-elect. But when

volunteers come together

for a common good, we

truly can make a signicant

difference. This industry

is blessed with many

talented and knowledgeable

professionals. I urge

everyone to offer your

time to help strengthen

our association and our

industry.

It is easy to volunteer. All

you need to do is contact

Taylor Morris at 202-296-

3671 or tmorris@alta.

org. ou can see all of

the committees and their

responsibilities on our Web

site at www.alta.org/about/

commserv.cfm.

all f ALtA mmiVlu l July 2

There are

several ways to

search for ALTA

members. The

rst is a general

search which

lets you keyword

search on last name,

company, city, county,

and zip code, as well as

choose a state, or any

combination of them. The

second searches by state

which you can then narrow

by county.

ou can also look up a

state land title association,

and search our

endor Director

to nd member

companies

to meet your

business needs

Finally, you

can nd out which title

companies have been

purchased by other

companies. For added

convenience, you can

access the membership

directory from your desk

by downloading the digit

directory icon, www.alta

org/membership/icons.c

Dwlad ALtA MmbhipDicy Yu Dkp

New Meico Insurance

Superintendent Morris

Mo Chavez tendered

his resignation to the New

Meico Public Regulation

Commission on May 4.

Chavez, who served

as superintendent since

October 2006, said he

reached his decision

after deliberating with

his family. His letter did

not cite specic reasons

for resigning. In Janua ry,

Chavez was placed on

paid administrative leave

pending investigation of

what was described as a

personal matter.

The commission moved

quickly to appoint an

interim replacement,

elevating Deputy

Superintendent Thomas

Rushton to the post.

Last year, Chavez

approved a 10.7 percent

increase in title insurance

rates and was epected

tor rule on a proposed

reduction of rates this

year. New Meico Attorney

General Gary King has

asked the insurance

superintendent to reduce

title insurance rates by 13.8

percent. nderwriters are

seeking a rate increase of

potentially 17 percent. The

New Meico Land Title

Association is seeking an

increase of potentially 4.6

percent and the Insurance

Division staff seeks a

decrease of 5.6 percent.

According to the National

Association of Insurance

Commissioners, Chavezs

resignation will not impact

the associations Title

Insurance Task Force.

Chavez served as chair of

the task force. Rushton

assumes the chair until a

permanent replacement

is selected. Alan Seely,

chief property/casualty

actuary for the New Meico

Insurance Division, has

been conducting meetings

and setting the agendas.

He will continue to serve in

this capacity.

n.M. uacsupid rig

Effective with foreclosures

referred on or after May 1,

2010, MERS must not be

named as a plaintiff in any

foreclosure action, whether

judicial or non-judicial, on

a mortgage loan owned or

securitized by Fannie Mae.

MERS is the mortgagee

of record when either a

mortgage names MERS

as the original mortgagee

and is recorded in the

applicable land records, or

a completed and recorded

assignment names MERS

as the mortgage assignee.

Therefore, according to

Announcement SC-

2010-05, when MERS is

the mortgagee of record

the servicer must prepar

a mortgage assignment

from MERS to the

servicer, and then bring

the foreclosure in its own

name, unless Fannie Ma

specically requires that

foreclosure be brought in

the name of Fannie Mae

that event, the assignme

must be from MERS to

Fannie Mae, in care of th

servicer at the servicers

address for receipt of

notices. In all cases, the

assignment from MERS

the servicer or Fannie Ma

must be recorded before

the foreclosure begins.

Fai say n namMers i Fclu Aci

The Federal Housing

Administration announced

plans to begin accepting

electronic signatures on third-

party documents originated

and signed outside of the

lenders control, such as real

estate contracts.

This policy is in

accordance with Electronic

Signatures in Global and

National Commerce Act

and the niform Electronic

Transactions Act, as

applicable. It is effective

immediately for FHA forward

mortgages as well as

Home Equity Conversion

Mortgages (reverse

mortgages).

ALTA supports FHAs

efforts to modernize its

loan approval process by

making electronic signature

acceptable for its mortgage

transactions, said Mark

Winter, ALTA president.

FHA Accp e-sig thid-Pay Dcum


5/19


by Jeremy Yohe

alittle more than four years ago, the U.S. Government AccountabilityOffice (GAO) released a report on the title insurance industry thatprovided commentary on loss ratios, data collection and statisticalreporting. >>

ai f anaial til

Ag Daa allThe goal of ALTA membersworking with the NAIC Title

Statistical Plan Working Groupis to create a data call that is as

simple as possible, while provingthe industrys value proposition.



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TitleNews > June 2010 > www.alta.org www.alta.org > June 2010 > TitleN

cover storycover story

Title Guarantee in Colorado, saidtitle agents will have some initialcosts in adjusting their systems andidentifying the matters that will beasked on the data call. But I dontthink it has a consequence that isharmful to agents, she added.

Daniel Mennenoh, president ofH. B. Wilkinson Title Co., said theinitial data call draft is pretty straightforward and does not appear to betoo onerous to agents.

The current issues being discussedhave to do with creating clear, concisedefinitions and instructions, whichare necessary to have meaningfuldata, he said. Agents may have tomake adjustments in how certaindata is kept, or may have to beginkeeping specific data they may not becurrently keeping. The good newsis that the Working Group seemsto be sensitive to only doing this ona prospective basis, rather than aretrospective basis which would be farmore burdensome for agents.

Some question the unintendedconsequences of a data call, includingthe impact on rates and the threatof changes in the premium split.Sisneros said typically, Coloradodoes not get involved in contractualrelationships with agent andunderwriters.

I see the premium split as acontract, she said. We will lookat the whole dollar amount, but

we arent in a position in Coloradoto force some mandatory split orrequire change. That being said, wemay, if we figure out the underwriteris overcharging, that the rate isexcessive and the 10 percent theyretain adequately covers the risk, then

we may need to address the split.Rate making is not the focus of

the group. The focus is to look at theindustry as a whole with the goal ofcollecting data to understand whathappens at the agent level and bettersupport what title agents do on adaily basis, Sisneros continued.

sa u ow Daa allWhile the NAIC attempts to developa model national title agent data call,New York and Pennsylvania bothissued their own data calls earlier this

year.ALTA members have invested

a great amount of time and energyengaging with the NAIC to createa thoughtful data call that will beuseful to regulators and educatestakeholders on the amount worktitle agents put into producing atitle insurance policy that providesassurance to homeowners thattheir investment in a property isprotected, said Kurt Pfotenhauer,chief executive officer of ALTA.When data calls are issued withoutconsulting industry participants,regulators miss the opportunity to

work constructively with industryexperts and run the risk of providan inaccurate picture of the titleindustry.

The Pennsylvania DepartmentInsurance demanded financial dafrom nearly 500 selected title ageroughly 20 percent of all licensedagents in the Commonwealth.Selected agents ranged from thelargest to the smallest, geographidistributed across Pennsylvania. Tdepartment of insurance indicatepurpose of the study is to examinexpense component of title insurarates with respect to title agentsactivities and expenses.

The Pennsylvania Departmentof Insurance request for dataand information consists of twospreadsheets. Each title agentreceiving the request must complboth spreadsheets, according to tdepartment. The first spreadsheecontains tables for reportingpremium, exposure, expense andtransactions data. The secondspreadsheet generally contains yeor multiple choice questions abouagencys business operations.

The department said failure torespond to the request may resultin revocation of an agents license

The department also indicated

The GAO said it couldntrovide analysis of title insuranceremiums because it did not receivehe requested information fromtle companies. To analyze andnderstand the costs, the report saidate regulators needed to collectformation on title agents.Understanding title agents costs

nd how these costs relate to titlesurance premiums that consumers

ay is important because title agentso or coordinate most of the workecessary for issuing title insuranceolicies, and they retain most ofhe premium, the report said.Reasonable explanation for suchfferences could be informative of

gency costs, while the absence ofasonable explanation could raise

uestions about the legitimacy ofuch costs.Fast forward to today and theational Association of Insuranceommissioners (NAIC) has

mbraced the GAO request for aational data call. Recognizing the

mportance of providing industryput, the American Land Titlessociation created a group toork closely with the NAICs Titletatistical Plan Working Group as itevelops an agent data call.Frank Pellegrini, chair of ALTAsgents and Abstracters Section, hasd the group of ALTA members

dvising the NAIC on a potentialata call.The group has strongly

ncouraged data collection from titlegents be on a go-forward basisnd that the reporting be simple andchievable, Pellegrini said.He added that any plan shouldcognize that while agents inew Mexico and Texas have beenporting data for years, agents in

ther states should not be expected

to report at the same level of detail.The group concluded the forms usedin Texas and New Mexico are tooburdensome for many in the industry.

Those states use data collection fromagents to promulgate title insurancerates. In order for reporting to beachievable, any type of data collectionshould be limited to a single page,according to Pellegrini. The NAIC

Title Statistical Plan Working Groupappears to agree.

Paula Sisneros, a member ofthe NAIC Title Statistical Plan

Working Group, has indicated thepurpose of the agent data call isto gather a better understanding

of whats happening at the agentlevel. Sisneros, who is director ofcompliance and investigations for theColorado Department of RegulatoryAgencies, said the informationthe group is seeking falls into fourbuckets, including risk avoidance,business profit, business expense andloss. The group expects to examine,among other things, number ofpolicies, number of canceled orders,amount of premium, premium split,salaries, rent, title plant costs, claimslosses and deductibles to insurers. Adraft of the data call created by the

working group can be found on pages14 and 15. The financial informationsection seeks income and expensesthat are customarily reported on atax return. ALTA said this shouldbe done on a go-forward basis, and

the NAIC should not expect agentsto look backward to collect thisinformation.

Sisneros said the NAIC wants tocollect information that is meaningfulto state regulators. ALTA membershave stressed the working groupconsider the sweat equity thatgoes into providing assurance thata property is clear of title defects.Sisneros said this involves the riskavoidance nature of the industry, butneeds help filling in the blanks.

We do see value in the sweatequity that goes into producing atitle policy and closing a transaction,Sisneros said. Im asking the

industry to come up with some waysto quantify the work that goes intoa policy. We dont want this to beonerous. What we are looking tocollect is information that is alreadyat your fingertips.

Whether or not a data call willbe on a go-forward basis, Sisnerossaid the NAIC wants good accuratedata. While the intent is to goforward, more data is better. Sisnerosindicated there is no timeframe forthe development of the agent call,but added the group wants to movequickly because other states arerolling out their own data calls.

Perhaps without as much care andthoughtfulness in the process, shesaid.

Diane Evans, vice presidentregulatory/legislative affairs for Land

ALTA Needsour Input

An ALTA title agent group led by

Frank Pellegrini has been working

with the NAIC on the data call

for months, but Justin Ailes,

ALTA director of government

affairs, said the association needs

more participation from ALTA

membership.

If members have an opinion

we want to know so we can make

sure we are giving good feedback

and advocating on your behalf,

he said.

Thoughts on the data call may

be sent to Justin at [email protected] ALTA has strongly encouraged

data collection from title agents be

on a go-forward basis and that the

reporting be simple and achievable.


7/19


cover story cover story

attorney may not have significantmarket share, collectively attorneyscomprise a major segment of theindustry.

We have to understand its goingto be difficult for some to reportmeaningful data, such as attorneys,but we also have to understand thatthe regulators will need data fromall aspects of the industry becausethe collective effect of informationgathered from even small providers issignificant, Pellegrini said.

Pvig h duyValu PpiiJoe Petrelli, president of theColumbus, Ohio-based rating firmDemotech Inc., said that whenregulators look at industry reporting,they are examining skewed databecause the industry does not countcurative efforts as loss adjustmentexpense.

Title agents are fixing thingsand not getting any credit for it, hesaid. It would be meaningful forregulators if they knew the amountof items that title agents fixed beforeissuing a policy.

Although the NAIC data calltemplate may not address thesematters directly, they are importantin that they corroborate the value ofthe work of title agents. Recognizingthis, ALTAs Agents/Abstracters

Research Committee is investigatingthe best approach to study andassemble industry statistics oncurative actions and risk eliminationefforts. This is an ALTA initiativeand not part of the NAIC project.

Pellegrini said the efforts to createa national data call highlights thefact that title insurance is a very localanimal and to develop something that

will have nationwide applicabilitywill be a challenge. As an example,in some states you cant act as an

escrow agent unless you also producetitle work for the file. Any data calldeveloped must account for countlessregional differences.

The data call needs to be sensitiveto the difficulty in assembling thedata and may need to provide modelsor formulas on how the data can bereported, he said. We need to helpthe NAIC understand why the datamay be skewed, but ALTA enjoys a

wonderful opportunity to be a voicein the process, and we should takeevery advantage that we have to bea voice in the process. We dont

want to lose sight that this is anopportunity to prove the value of titleagents.

Evans agreed the industry variesgreatly by jurisdiction, but alsomentioned there is some element ofsearch and exam in every area.

In many jurisdictions agentswill issue the commitment, so thaclearly is conveying to the consum

what needs to be done in order tomake sure the transaction can beinsured, she said. Agents need tstart thinking about the tremend

valuable service they provide tohomebuyers and lenders. This dacall can show we have legitimateexpense to accomplish that.

We have to show that we areworth the retention of the premiuthat we keep. We have to show whave expenses. This is a real businto those of us who are doing it evday. We are proud to say Yes, wea lot of fabulous work. If a data cnecessary, lets do it, Evans adde

Going forward, ALTA willcontinue to press the NAIC tobe clear on the purpose of each oftheir reporting requirements, whishould also provide the opportunto correct misperceptions that maregulators and others have aboutthe value of the service that the tiindustry provides.

Though the collection andreporting of agent data wouldbe an enormous change for ourindustry, if done correctly, it is alan opportunity to silence some ofour critics, Pfotenhauer said. Thcollection of this data will go along way in telling regulators, anultimately our customers, the valuour industry provides to the transof property.

hat in general, absent any specificxemptions that may apply, responses

this request may be consideredublic records under Pennsylvaniasight to Know Law.Pennsylvania Land Title Institute

resident Len Shatz wrote a letter tohe insurance department, includingxt of the members emails,escribing the concerns PLTA hasith the data call.The PLTA supports the idea of a

ata call as an opportunity to betterform the department of insurance,

ut believes the data call was poorlyanned, executed and managed. Ins letter, Shatz said there was not

ufficient consultation with industryakeholders and no testing of theroposed call.PLTA was shocked by the scope

nd complexity of the proposed dataall, especially considering that agentsad never been warned of the need toeep, maintain and report such data,hatz said.In April, the New York State

nsurance Department surprisinglysued a data call requiring all titlesurance underwriters operatingNew York to collect income and

xpense data for 2009 from theirdependent agents.

Even though the state does notlicense title agents, the departmentsposition is that it can collect theinformation through underwriterssince they are licensed entities. Thisis the first time that independent titleagents will have to submit financialdata and plan to collect this dataannually as part of the mandatorydata call for underwriters, whichalready report annual financialdata to the Title Insurance RateAssociation (TIRSA). TIRSAcollects the information on behalf ofthe insurance department. Agentsare under pressure as the deadline tosubmit information for the data callis June 30. The insurance department

wants title agents to break up the titleinsurance premium by underwriter.

The New York data call examinesthe expenses directly relating to thetitle insurance premium, not anyother income the agent may earn.So if an agent has separate businessor makes money on non-insuranceproducts, it does not need to beincluded.

One issue surrounds attorneyagents that have a title businessancillary to a law practice. Fewattorney agents devote their resourcesexclusively to real estate and theoverwhelming majority of law firms

who issue title insurance policies arevery small. Many, if not most, do notmaintain data pertaining to the realestate aspects of their practices.

While we recognize that it isimportant the regulators be ableto collect data from all industryparticipants, we believe that it isequally important that the datathat is requested be meaningful andappropriate, said Rich Patterson,president of Connecticut Attorneys

Title Insurance Co. Since the greatmajority of attorney title agents issuetitle insurance commitments andpolicies through their law firms, itis essential that the NAIC makeclear that the data being requestedas part of its data call, relates only toa law firms title insurance activitiesand not to its non-title insuranceactivities. If we can develop aninstrument that collects such data,

we believe that everyone will be wellserved.

While attorney agents may notcurrently be able to comply with themost basic data call, such as providingthe number of policies issued,revenue and guesstimate of laborcosts, the ALTA group working withthe NAIC believes the more data thebetter in proving the industrys worth.

Mennenoh said to gathermeaningful data from title agents ineach state, data should be collectedfrom more rather than fewer agents.

However, they do seem tounderstand that agent acceptance andparticipation will be greater if theform of the document is simple, clearand easy to complete, he said.

Pellegrini said that it could behard for general-practice attorneysto decipher the percentage of salariesand other resources used to performtitle work, but admits regulatorsmake a good point that while one

n We have to show that we areworth the retention of the premium

that we keep. We have to show

we have expenses. If a data call is

necessary, lets do it.

Data Call Draft

Check out a draft of the potential

national agent data call developed

by the NAIC Title Statistical Plan

Working Group on pages 14 and 1


8/19


cover story cover story

I c o m e

3 3 Pre miu m w rit te n

34 Premium remitted to underwriter

35 Closing/esc row income

36 Tit le examinat ion income

37 Abstr ac t/ sear ch income

3 8 Inv es tm en t i nc om e

3 9 Al l o the r i nc ome

40 Total income $0.00

e x p e e

4 1 Sal ar ie s/ wa ge s ( W- 2)

4 2 C on tr ac t la bo r (1 09 9)

43 Owner ship shares or d iv idends

44 Payroll taxes

45 Benefits

46 Rent, uti li ti es , and repair

47 Title plant maintenance/subscription expenses

48 Abstract/search expenditures

4 9 C om pu te r/ so ft wa re

5 0 B us in es s i ns ur an ce

5 1 Bu sine ss l eg al

52 Accounting

53 Licenses, taxes, and f ees

5 4 Mar ke ting /s al es

5 5 Tr av el an d l od gi ng

56 Education

57 Bank charges

58 Charge offs

59 Misce llaneous expense

60 Total expenses $0.00

L O S S , L O S S M I T I G A T I O N , A N D N D E R W R I T I N G E x P E N S E S

61 Unreimbur sed ti tle losses

62 Closing/Esc row losses

63 Abstr ac t/ sear ch losses

64 Loss-re la ted lega l expenses

6 5 De du ct ib le s pai d

66 E&O insurance premiums

67 Fidelity/Surety bond premiums

68 Total loss expenses $0.00

69 Net income before taxes $0.00

7 0 I ncome t ax p ai d

71 Net realized income $0.00

TITle Iurace ageT TaTITIcal reporT

ine

g e e r a l I f o r m a T I o

C al en da r y ea r r epor ti ng

S ta te re po rt in g f or

Name

Fe de ra l t ax I D/ SS N

Address

(a)

(b)

(c)

Contact person

Contact phone

Contact e-mail

Agency Type

Independent

0 Aff il ia ted (w/ underwri ter)

1 U nd er wr it er di re ct

2Is reporting agent an Affiliated Business Arrangement (ownershipshared with real estate brokerage,mortgage company,etc.)? (Y)es/(N)o

3 State of domici le/r es idence

4 Number of states conducting business in

5 Percentage of business for this state

6 Date commenced business

7 License number (for this state)

8 No. of employees (total )

9 L ic en se d e mp lo ye es

0 U nl ic en se d e mp lo ye es

1(Please provide a list of all employees as a separate attachment. Include employeename, license number (if applicable), and job title.)

r I k a u m p T I o

2 N o. o pe ne d o rd er s

3 N o. ca nc el le d or de rs

4 N o. po li ci es is su ed

5 Tota l clos ings conduc ted

6 No. courtesy closings/closings for 3rd parties

7 Total full searches conducted

8 No. full searches conducted for 3rd parties

9 No. full searches purchased through 3rd party

0 Total O&Es (property reports) produced

1 No. O&Es produced for other companies

2 No. O&Es produced through 3rd party

Title Insurance Agent StatisticalReport - Agent Instructions

The NAIC Title Statistical Plan Working Group has

developed this draft form of a potential national agent

data call. According to the NAIC, agents are to enter only

state-specic information for the state in which they are

reporting. The NAIC said to not provide aggregate data for

all states in which an agent operates. Information must be

submitted separately for each state an agent operates.

If an agents general income includes data for more than

one type of business (such as an attorney who produces

a limited amount of title insurance business), the agent

should gure the amount of title insurance they perform as

a percentage of their business, and provide the appropriate

estimations in the Epenses section. For eample if title

insurance is 25 percent of an agents business, and the

agent spent $12,000 on rent, utilities and equipment in the

reporting year, enter $3,000 on line 46 ($12,000 25% =

$3,000).

If search and eamination is included in an agents title

insurance premiums, and the agent does not perform

searches for any other entity, the agents Total full searches

will most likely be in between the amount of orders opened

and the amount of policies issued. If an agent does perform

searches for another entity or party, the total number of

searches will most likely be above either of those numbers.


9/19


business strategies conference


attendees at ALTAs2010 Business StrategiesConference were treated togeneral sessions featuring

resentations on leadership andhe new RESPA rule, professionalevelopment sessions providing CE/LE credits and information on

he latest technology advances fromendors.ALTA President Mark Winter

pened the conference, which waseld May 2-4 in St. Louis, with arief speech portraying the manypportunities awaiting the titlesurance industry.A crisis is a terrible thing toaste, Winter said. Simply put,e are experiencing what I hope is

he tail end of the most wrenchingousing catastrophe since the Greatepression, but the economic fogems to be lifting.

As the economy is rebuilt, Wintersaid, three items will impact the titleinsurance industry and title agentsbusiness model: Financial reform legislation:

including the creation of the Con-sumer Financial Protection Agency.

GSE Reform: ALTAs GovernmentAairs Committee has designatedan advisory group to analyze theingredients of the future GSEs.rough that process, ALTA willform recommendations and use thaton Capitol Hill to help shape andform the ne w GSEs. ALTA will

demand the continued use of titleinsurance.

Implementation of RESPA: Mem-bers of the insurance industry havebecome leaders in educating othermarket participants on RESPAreform.

It caught my attention that weare an industry that cooperates witheach other and shares our expertise,

Winter said. This enhances ourindustry and the participation makesa difference.

Bui sagifc Pvid

Gaway FuusuccWith the economy still teetering on uncertainty andhe industry dealing with the new RESPA Rule, theonference provides attendees information andactics to succeed.

LadhipDuring the first-day general session,four industry veterans offered insightinto leadership traits needed tosurvive this market.

Patrick Stone, who has more than35 years of industry experience andis a former COO and president ofFidelity National Financial, said titleagents need to employ common sense

when planning strategy.The only thing that matters is what

your client wants, said Stone, who isCEO of Williston Financial Group.

To further the leadershipdiscussion, Stone then joined RobChapman of Old Republic National

Title Insurance Co., Cara Detringof Preferred Land Title Co. andFrank Pellegrini of Prairie Title Co.on a panel rounding out the openinggeneral session.

Stone said there is substantialopportunity to make investments inthe title industry. He said there willbe premium dollar growth in the nextthree to five years.

Clients are looking for alternativeways of doing business to meettheir needs, Stone said. Theres atremendous opportunity to reinventthe industry, which will do nine to 10billion in premiums this year. Thisis about where we were in 2001 and

2002 and those were pretty goodyears. Theres a lot of opportunityhere, just talk to your clients.

Honing in on the idea of takingadvantage of opportunities, Detrisaid her company changed some its strategy, evaluated its processeinvested in technology and broadmarket area.

We also zeroed in on events thmight change the way lenders andreal estate agents perceived howthey were doing their job, she saThe new RESPA rule impacts thgroups and consumers in differen

ways. We put together trainingsessions for these groups. This waperfect example of an opportunity

Chapman advised title agents ttake advantage of Internet tools atechnology to create efficiencies apreserve the bottom line.

Agents need to utilize technoland right-size their operations anchange their process flow, he sai

Pellegrini said that leadershipshould not be confused with succHistory has given us great lessonof leaders who have failed, he saThe true measure of leadership iunwavering actions of those rowithe boat. If the leader doesnt havcommitment from those he isleading, the leader wont succeed

Pat Stone opened the May 3 general session with a presentation on business

strategy, telling attendees there is plenty of opportunity in the market.

www.alta.org www.alta.org > June 2010 > TitleN


esPA mplmaiaiful, n Faalhe senior regulatory counsel for

he American Bankers Associationined members of ALTAs RESPA

mplementation Task Force duringdiscuss how the lending and titledustries are adjusting to the newgulations.Rod Alba, senior regulatory

ounsel for the American Bankersssociation, joined the panelaturing RESPA Task Forceembers Wes Lasseigne of Lendersitle Co., Chris Christensen ofeirsonPatterson LLP and Genealseth of First American Title

nsurance Co. Moderating the panelas Mary Schuster (also a memberf the Task Force) of RamQuestoftware.The new reform overturned 35ars of law, practice and judicial

ecisions. Make no mistake thatvery single line in the HUD-1 haseen litigated, Alba said. Theree decisions by the courts and

dministration agencies and nows all gone. We are getting the

famous HUD FAQs that are hazy,contradictory and changing. Forlenders, it has made them absolutelycrazy. Lenders are still having a greatdeal of difficulty in compliance. But,

we are all in this together and arecommitted to getting this right. Wehave to be looking to the future inhow we can make this into the bestprocess that we can.

Christensen, who offeredperspective from lenders and thesettlement side, said the new rulebrought operational meltdownto lenders. He said the wholesalechannel is shrinking due to the newregulation because of the liability onthe wholesale channel for the GFEof the originator. Some wholesalelenders are taking 20 to 30 days topurchase loans, so it is causing delaysin closing and funding. The retailside is experiencing the same issues.On the title side, Christensen ishearing similar problems, but not thetotal meltdown. He said title agenciesare seeing a business shift.

The new rule gives lenders morewiggle room to direct business to

companies that reduce cost and risk,he said. They do have more powerin the transaction to direct orders.Im hearing that bigger shops aretelling their loan originators theycant pick title, but must role up toa national provider. Im also seeingmore technology deployment withmore lenders moving to a completee-closing solution where they areintegrated with title providers.

Aalseth said he expected a trainwreck for the first year of RESPAreform, but said it has only been abumpy ride on the settlement side.Many of the problems were based onassumptions because no one knewhow the rule would play out.

We are taking a brand new animaland trying to put it into our computersystem, Aalseth said.

Lasseigne said the most frequentrequest his agency receives fromlenders is to break out fees in line801 and 1101. He said his agency hasgone to a closing or settlement fee,and title insurance premium.

We dont have anything to breakout, he said. But as far as theoriginator fees, they still have manysubcomponents. Because they sell themortgages on the secondary market,they typically want this on thesettlement statement so they can sendit to their investor.

Pa Pid Hd2009 ALTA President Mike Pryorreceived the Michael F. Wille TIPACAward for Outstanding Achievementduring the 2010 Business StrategiesConference.This award means a lot because Mikehad a lot of passion, Pryor said. He

was bold and taught a lot of peoplehow to approach lawmakers.

Introducing the award was JohnVoso, chairman of the Title Insurance


Political Action Committee.Presenting the award were Marilyn

Wille, Mikes wife, and Casey, one ofhis sons.

He would be honored to beassociated with this award, Marilyn

Wille said.Mike Wille died in September 2006

when his twin-engine aircraft crashedin North Sioux City, S.D. after he leftthe Nebraska Land Title Associationsannual convention in Northe Platte,Neb. He was to be installed as ALTApresident during the 2006 AnnualConvention.

Vd sha thi WaMany exhibitors at the conferenceshowcased the benefits of their productsduring vendor demo sessions prior tothe opening of the event on May 2.

RynohLive, First American SMS,greenFolders, SoftPro, Stewart Title,ISGN and Ernst Publishing all tookadvantage of the opportunity toshow how their products can aid theefficiency of a title operation.

The vendor break-out sessionsare an important component tothe Business Strategies Conferencebecause it gives attendees a chance

to review the direction technologycompanies are taking in bringingnew products and efficiencies to theindustry, said Tim Conley, vicepresident of sales and marketing forSoftPro. Technology has alwaysprovided the quickest way for acompany to be able to maximize theirresources and differentiate themselvesin the marketplace. At LPS SoftProour primary goal is to deliver ourcustomers solutions that will increaseproductivity, reduce costs and allowthem to capture more business. The

vendor sessions allow us to showcaseour efforts in these areas.

eo Dicu ALtA FuuRestructuring membership dues,building stronger relationships

with state associations, revampingconference content and membershipbenefits were all addressed as KurtPfotenhauer, chief executive officer ofthe American Land Title Association,provided an inside look at ALTAduring a session Monday at theBusiness Strategies Conference.

In the last two and a half years,we have changed a lot of internalprocesses, Pfotenhauer said.

We have a cohesive team and areconstantly asking ourselves how

we can improve our value to ourmembership.

Pfotenhauer said ALTA currenhas 20 different revenue-baseddues levels. The low-end annualmembership dues are $460, while high-end cap is $11,500. Memberis comprised of companies, asopposed to the National Associatiof Realtors where members join aindividuals.

Our goal is to grow membershand we are considering how torestructure our dues, Pfotenhauersaid. Membership for a tradeassociation is important largely forstrength of advocacy.

Pfotenhauer said there are someeffective state land title association

while others lack effective advocacAssociations are needed to lobbymembers of Congress, state housestate insurance regulators.

One of our central missions is thelp states become better at theiradvocacy, Pfotenhauer said. Evethe good ones benefit from theinformation that we have gathereaid in their fight.

In the exhibit hall, conference attendees had a chance

to review the latest products from vendors while

enjoying St. Louis delicacies.

www.alta.org www.alta.org > June 2010 > TitleN

state profile

an you give us a quick state-of-thesociation of the ILTA. How manyembers does the ILTA have? Hasembership held steady the past fewars? What are you doing to growembership and keep members engaged?he Indiana Land Title Associationoff to a good start in 2010. We

ave had three events, a pre-licensingass in January, Lobby Day and ouruper Seminar both in February,nd we had a record attendance

all three events. Our Educationommittee plans seminars virtually

very month, usually in two citiesnd frequently we videotape ourminars and show them in different

arts of the state. We have beenry fortunate in attracting top-

otch talent for our seminars. Annenastasi and Phil Schulman spokeour February event and Mike

ryor and Mary Schuster spoke at

our May Owners/Managers meeting.Ruth Dillingham, Bush Nielsen,and Darryl Turner are scheduled toappear later in the year. Also in May,

we presented the Title Insurance101 program to the department ofinsurance and the attorney generalsoffice.

Our education seminars provide55-60 percent of our annual revenuesand the success of the educationalprograms allows the ILTA to beless dependent upon membershipdues as a revenue stream than moststate associations. As a result, wehave been able to keep our dues low.Being insulated in the Midwest hashelped us as well. Indiana does notexperience the extreme highs andlows of other states, including the

wild increase in housing prices ingood times and the tremendous dropin housing price in bad times, wildly

fluctuating business trends and overallemployment trends. For example, wehave suffered only a modest declinein membership from 297 membersin 2007 to 282 members in 2009.

To increase or sustain membershiplevels in 2010, we have taken a cuefrom the ALTA. Enlisting the aidof our underwriters, we have askedthem to provide the names of theiragents who are not members of ourassociation and, thus, for the firsttime we are able to contact thosedifficult-to-identify non-membersdoing business in the state. Wereally appreciate the assistancethe ALTA provides, especially itsfederal legislative activities and itseducational programs. Additionally,the conventions, conferences andmeetings provide a wealth of goodideas for improving operations in thetitle industry.

Has any recent legislation been enactedin your state impacting the industry?

Are there any pending bills that loom onthe horizon, and what impact could theyhave?

This year was the short session of ourlegislature and we did not proposeany major, new legislation, so we

diaa Ladtil Aciai

sidnt: Jeff Bosse

it: President of Bosse Title Co.and Regional Title Services.

ndsty in: 35 years

dtin: Vndbit univsity, B.a. nd

thwstn h lw, J.D.

state profile

primarily played defense. Last year,our members were successful ineducating their individual legislatorsabout the importance of adoptinga good funds law. This year, anindustry group made a major effortto gut the law and we workedhard and finally were successful infending off this challenge. We also

were successful in defeating a billthat would have allowed countyrecorders to refuse to record virtuallyany document handed to them and aproposal to remove from the statutesthe requirement of mandatorycontinuing education for the renewalof title insurance licenses, as well as abill which would have prohibited titleagents from serving as escrow agents.

What are the major issues impacting theindustry in your state?

The major issue impacting the titleindustry in Indiana today is tryingto comply with new HUD-1. Therehas been so much confusion andconflicting information given outthat it is difficult to comply withthe requirements. Lenders dontunderstand the instructions andthere have been numerous instances

where a lender rejected a properlyprepared settlement statementand required changes that wereclearly wrong. Even underwritersare providing conflicting answerson this issue. Compounding theproblem is that in parts of the state

we use all-inclusive rates and in otherparts of the state we itemize eachservice provided. Our associationhas taken take the lead in helpingits members cope with the newrule. We have had several speakers,including the deputy director of ourdepartment of insurance speak atseminars about completing the newform. Other challenges we confront

include dealing with a new state law,requiring settlement agents to reportthe names and license numbers ofall the professionals involved in atransaction and also an unfavorablerate structure and, of course, thestruggling economy.

What has been the biggest personalchallenge for you during your career?My greatest personal challenge hasbeen building this business fromscratch. I started with absolutelynothing and grew the businesssignificantly. There were some lean

years in the beginning, the middleand then again now, interspersed

with some really great years. Thechallenge always has been andremains staying ahead of theeducation curve while offering yourcustomers all of them the verybest service by knowledgeable people.

The ILTA provides the educationalsupport and the collegial atmospherepromotes the best practices.

Tell us about one thing that people in theindustry would never guess about you?Something people in the industrydont know about me is that I am ahistory buff. Currently I am trying to

write a biography about an ancestorof mine, an absolute rags-to-richesstory. He came to the city withnothing and when he died at the ageof 47, he was a millionaire servingon the boards of directors of almost30 companies. He was elected mayorthree times and became a majorstate political figure. He was alsoone of the three lay members of theBoard of Directors of the nationalLutheran Church, a founder of theLutheran Laymans League and apresident of the National FurnitureManufacturers Association, and

who at times was accused of a little

political chicanery. He started sevbusinesses, including hotels, furnfactories and even his own bankand when one of the newspapers

was critical of him, he bought thenewspaper.

If you could have dinner with one pin history, who would that be and wIf I could have dinner with anythree historical figures, I wouldchoose Jesus, my ancestor BenBosse and Alexander Hamilton.Hamilton, unlike all the otherFounding Fathers was born outof wedlock to abject poverty ona Caribbean island. He was stillable to become the architect of oucountrys economic stabilizationand probably the principal advisoto George Washington, whos evaction, set the precedent that futupresidents would follow. Hamilto

was also instrumental in the counadoption of the Constitution, asthe primary author of the FederaPapers. His honorable public care

was marred by a very public affairengaged in strenuous battles agai

Thomas Jefferson, John Adams aof course, Vice President Aaron B

What facet of your job do you find thmost rewarding and why?

The most rewarding part of my rjob is working through problems,finding solutions that might otherhold up or prevent closings altogeIt is rewarding to be able to find asolution that actually pleases peop

Whats your favorite beverage to helyou unwind?Pinot Grigio is my beverage ofchoice to help me unwind, and m

wonderful wife usually has an opebottle ready when I return home the evenings.


12/19

TitleNews > June 2010 > www.alta.org

technology corner

2010 hasnt just been the yearof RESPA reform. By allaccounts, it has been a yearfor the title and settlement

rvices industry to take stock ofhat works and what doesnt cross the board, including sales andarketing strategy. e market has

hanged. e governing regulatoryamework has changed. And theays in which title companies seekew business have changed.The past two years have seen aeady stream of decision-makersnd executives climbing onto theocial media bandwagon. One couldy that social media was adopted by

he title industry from 2008 to 2010.fter all, it promised to make cost-

fficient one of the great strengths ofhe industry: networking. And bestf all, it was (and remains) generallyost-free.But not everyone with a LinkedIn

rofile or Facebook fan page hassuccess story to tell today. Inct, just as many would explain

hat they gave social media a try,ut found few results. Phrases like

time waster and for the kidsseem to come up repeatedly whenthe disillusioned users explain theirnew view of social networking Websites. Worst of all, many explain thatthey tried to tweet (use Twitterfor social networking purposes) orparticipated in a LinkedIn discussion,

with no sales results. And, tocomplicate matters, as frustratedusers struggled to forge results withtheir LinkedIn or Facebook profiles,a veritable symphony of social mediagurus, experts and evangelists havecontinued to insist that everyoneshould be on Twitter, regardless ofgoal, audience or strategy.

It appears that the title industryis on the verge of a social mediabacklash. Many executives, oncereceptive to the potential ofFacebook, Twitter and LinkedIn,but burned by time wasted with fewbusiness-based results, now see theseas the marketing equivalent of thehula hoop or wide-legged jeans: justanother fad of little use to respectablebusinesses. Although that frustrationis understandable, that backlash

only threatens to stifle a golden-opportunity to make use of a cost-effective and potentially powerfulmedium for business growth.

All Abad hscial Mdia B adwag!LinkedIn and Facebook were (andremain) the obvious favorites for theearly adopters in the industry. In theearly days, participation was limitedto setting up a profile, and, forsome, updating ones status relativelyfrequently with good news about hisor her business. In other words, somein the industry saw the potential fora broadcast mechanism that did notneed to be rented or purchased in thesocial media sites.

By 2009, however, more thanjust the casual executive had joinedthe movement. While some wereprodded and pushed in, and otherscame to see what the fuss was about,it is clear that most were willingto accept that the industry waschanging, and new methods of salesand marketing might be in order, too.Some filled out extensive profiles,others registered anonymously. Most,admittedly, were simply getting ataste of the medium, with only ahearty few jumping in with both feet.

By this time, LinkedIn discussiongroups had been formed. FacebookFan pages were being built. And afew savvy firms in the industry werebrainstorming ways to make the bestuse out of social media. Many evenflocked to Twitter, the latest darlingof marketers across industry lines.

th til duy twi: nw Wha?here may be growing backlash against social

media as eecutives become burned by timewasted with few business-based results.

y Bri aN ri eger


13/19


technology cornertechnology corner

industry. Perhaps that can be tracedto the traditional delineation in thespace between sales and marketing.

Traditionally in the title industry, thefavored path has been consultativesales and the leveraging ofrelationships. Everyday conversations(How about those Bears?) havebeen the preface to the sell. Onthe other hand, for the title industry,marketing has been the hard pitch:the flyer, the postcard, the sales

letter. This has likely been shapedby the very nature of the channelsbeing used to distribute marketingmaterials. Whether it comes inthe form of advertising (postcardor on-line advertisement) or directmarketing (e-mail, sales letter),traditional marketing and advertisingchannels generally dont allow forthe casual conversation and two-waydialogue that ease the transformationfrom relationship to pitch in sales.

Theres simply no room to doso. Accordingly, most marketingmaterials have been reserved for hardpitching: feature/benefit, and the like.

Perhaps this has been part of thedisillusionment with social media.Many professionals, eager to takeadvantage of this free new medium,have used it as a broadcast tool(along the lines of traditional titlemarketing). LinkedIn status updateshave been used solely for advertising

messages. Discussion posts have beenused to generate a one-way messagethe only response to which could beto buy or move on. Such approachesare certainly understandable, but alsodestined to fail.

Businesses successfully usingsocial media sites such as Facebookand LinkedIn report that socialmedia marketing has worked forthem because they understand thatthe sites only work when used as

conversational, rather than broadcast,forums. Results have come about inmuch the same fashion as the returnsreaped from a productive tradeconference not always instant, andnot based solely upon the ability topitch the product. Instead, successfulusers have used Facebook, LinkedInor Twitter in a more traditionalsales and networking approach. Byoffering up statements and postingsof value to anyone, theyve won newsales and new relationships far moreeffectively than spelling out theirown services. Theyve contributedto their social media communitiesfrom the perspective of what will beinteresting to the reader, rather thanwhat can the reader do for me? As aresult, theyve achieved more.

Believe it or not, social media ishere to stay. We may not be usingLinkedIn or Facebook in a few years,but we will be using their progeny,

the next-generation sites. And it not always be appropriate to use eforum. Like any marketing, salescommunications strategy, a sociamedia strategy needs to be a planreasoned approach that applies thneeds of the target market to the message, effectively encouraging certain behavior (e.g. to click on

Web site, to purchase the producetc.). And, just like any otherbusiness strategy, the implementaof a social media marketing stratemust be consistently applied, ovea reasonable period of time. Timeand energy need to be expended fsocial media to work as a businestool. Many title professionals havlearned these lessons, and seem tobe enhancing their sales programincredibly creative, cost-efficient making use of social media. It is

yet time to toss social media into dust bin of historical fads. Insteaits time to take a good hard lookhow to make better use of these t

Brian Rieger, a former lit

with nine years of public re

and marketing communica

eperience, is principal of

Impact Communications (w

trueimpactcommunications.com ). His

consulting firm currently provides marketi

and public relations strategy for mortgag

settlement services businesses of all size

Brian has served the title and settlement

services industry for seven years, providi

strategic counsel for national underwriter

technology developers, title agencies and

vendor management companies. He is a

frequent industry speaker, having spoken

the ALTA Business Strategies Conferenc

TAMA Annual Conference, Ohio Land T

Association Annual Convention and Natio

Settlement Services Summit.

n Most title professionals whoclimbed aboard the social media

bandwagon are still there. But

increasingly, participation is on the

decline.

While one seeking a contact from thetle industry might have struggled tocate that person in 2006 or 2007,ry few remained absent as the

ubprime meltdown and subsequentcession raged.

w wha?Most of the title professionals who

imbed aboard the social mediaandwagon are still there. At least,heir profiles are. But increasingly,articipation in industry forums,ctive Facebook fan pages andutine Tweets are on the decline.One common response fromdustry executives, when asked why

hey arent more active in the socialedia, is quite simply I dont haveme.

But there is clearly somedisillusionment within the ranks as

well. Some of this may arise fromthe tremendous amounts of hypeand fanfare accompanying the socialmedia over the past two years andnot just within the title industry.Indeed, one cant watch a newsprogram, visit a sports Web siteor make a purchase without beingaccosted by the solemn intonation toFollow us on Twitter, Facebook andLinkedIn. Check us out on YouTube.Read about us on Digg. And onedoesnt need to travel far on the Webbefore encountering yet another

Web 2.0 evangelist screaming fromthe rooftops that everyone must betweeting or else! Perhaps thedecline in involvement is really the

silent answer from the title industry:I tried that. It didnt work.

A W thwig ou h Babywih h Bahwa?In theory, social media sites shouldbe a natural fit for the title industry.Known for its fairly conservative

ways, this is an industry in whichface-to-face sales still rules the day,and marketing tends to be the leavebehind. By that standard, goodsocial media habits mirror good saleshabits. Instead of the unnatural anduncomfortable hard pitch of somemarketing materials, the participantin a social media forum builds arelationship, segueing to the pitch ata more appropriate time.

This, however, has been a difficulttransition for many within the

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running your business

www.alta.org > June 2010 > TitleN

running your business

those loan correspondents thatdo not seek to obtain mortgageeapproval. The prohibition also willresult in the third-party originatorsbecoming mortgage brokers underapplicable state law, as many states

view the party identified on the noteor security instrument as the lenderin the transaction.

In response to these issues,which were raised during the publiccomment period, HUD announcedthat it will further consider theprohibition on a TPO closing aloan in its own name. Nevertheless,unless HUD announces a changeto this prohibition, currently FHA-approved loan correspondents thatsubsequently become TPOs willbe prohibited from closing FHA-insured loans in their own namebeginning Jan. 1, 2011. Currentlyapproved loan correspondents maycontinue closing loans in their ownname through Dec. 31, 2010.

In addition to eliminating the loancorrespondent approval requirements,the final regulation increases thenet worth requirement for FHA-approved mortgagees from $250,000to up to $2.5 million. As proposed,the final regulation phases in the net

worth increases over a three-yearperiod for existing FHA-approvedmortgagees, but requires all newapplicants on or after June 21, 2010to meet the new requirements. Thenet worth requirements apply tosupervised, non-supervised, and, forthe first time, investing mortgagees.

mplicaiWhile the Department attempted

to address concerns raised by FHAparticipants in comments to theproposed regulation, the finalregulation leaves several importantquestions unanswered and raises new

questions and considerations for bothFHA-approved mortgagees who

wish to maintain approval and thoseentities content with becoming non-FHA-approved TPOs.

According to K&L Gates, themost obvious implication of the finalregulatory changes that eliminateloan correspondent approval willbe FHA-approved mortgageesincreased responsibility and liabilityfor non-approved TPOs. Whilethe Department continues to takethe position that the additionalresponsibility HUD will requireof sponsoring FHA-approvedmortgagees will be minimal, FHA-approved mortgagees are likely todisagree. Under the final regulation,as of Jan. 1, 2011, HUD willrelinquish its jurisdiction over loancorrespondents and hold FHA-approved mortgagees liable for allaspects of FHA-insured loans. FHA-approved entities that continue toaccept FHA loan applications from

TPOs will be responsible for ensuringthat these entities are eligible toparticipate in FHA programsand must monitor the quality andperformance of loans received from

TPOsThe final regulations significantly

alter the current FHA approvalstructure, and FHA-approvedmortgagees who pride themselveson maintaining sponsor/loancorrespondent relationships withhundreds, or even thousands, ofmortgage brokers may want torethink monitoring the eligibilityof these entities and taking on fullresponsibility and liability for theFHA-insured loans originatedthrough these relationships, K&LGates said.

The transfer to a mortgagebroker operation for those small

lenders and loan correspondentswho currently close FHA-insuredloans in their own name will alsocreate considerable changes to thentities revenue streams. K&LGates said as lenders, these entiticurrently are not required to disclback-end compensation; howevera TPO acting as a mortgage brok

will be required to disclose suchcompensation separately, which wshift profits and may result in lowincome streams. HUD notes tha

TPOs will still be entitled to incostreams derived from servicing repremiums; however, as the finalregulation will not permit TPOsto close loans in their own nameas of Jan. 1, 2011, servicing releaspremiums will not be available to

TPOs. Finally, the final regulatiodoes not address the interplaybetween the final regulation and Federal Reserve Boards proposedamendments to the regulationsimplementing the Truth in LendAct (TILA), which would prohibpayments to mortgage brokers ana lenders loan officers based on aloans interest rate or other termsthe proposed changes to the TILregulations become effective, TP

will be prohibited from earningyield spread premiums or othercompensation based on interest ror loan terms.

A significant number of currenFHA-approved loan correspondeand small mortgagees who cannomeet the net worth requirementsexit the FHA loan market, accorto K&L Gates. The final regulatmay decrease the number of entitproviding affordable mortgage crto eligible borrowers and increasethe costs associated with obtaininan FHA-insured loan from thoseapproved entities that remain.

The U.S. Departmentof Housing and UrbanDevelopment (HUD) hasnalized rules that signicantly

strict small and medium-sizednders from participating in theederal Housing Administrations

FHA) mortgage insurancerograms. While few can argueith the goal of strengthening thenancial soundness of the FHArograms, the method of achievinghis goal most certainly will limit theeographic access of FHA lendingnd wreak havoc on the ability ofmall businesses to provide FHAans, according to the Washington,.C-based law rm K&L Gates.The two most significant changesthe final regulation eliminate

he HUD approval requirement foran correspondents and increase

he net worth requirements forHA-approved mortgagees. Thenal regulation also incorporatesrovisions of the Helping Familiesave Their Homes Act (HFSHA)hat HUD previously proposed

and, for the first time, announcedamendments to the regulationgoverning the principal/agentrelationship between FHA-approvedmortgagees.

As of May 20, HUD no longerapproved new loan correspondentapplicants. Loan correspondents withFHA approval as of May 20 willmaintain approval through Dec. 31,2010. HUD clarified in the Preambleto the final regulation that currentlyapproved loan correspondents areeligible to apply for approval as amortgagee, provided they meet theapplicable criteria, including the newnet worth requirements. For thoseloan correspondents that do not seekFHA approval as mortgagees, theseentities can continue to originateFHA-insured loans as third-partyoriginators or TPOs, providedthey are sponsored by, and work

with, an FHA-approved mortgageeand meet certain eligibility criteria setforth in the final regulation.

Under the final regulation, HUDwill rely on sponsoring mortgagees

to ensure that TPOs from whichthey obtain FHA-insured loanapplications are eligible to participatein FHA programs and adhere toFHA loan origination and processingrequirements. HUD will holdlenders:

Responsible for monitoring theeligibility of its sponsored TPOs andtheir actions in originating FHA-insured loans; and

Liable to FHA for all FHAaspects of the FHA-insured loansunderwritten by the FHA-approvedmortgagee.

With regard to responsibility forTPOs, FHA-approved mortgageesthat accept loan applications froma non-FHA-approved entity willhave to determine and verify that the

TPO is not subject to the sanctionsor administrative actions that makean entity ineligible for participationin the origination of FHA-insuredloans.

The final regulation also addresseshow the elimination of loancorrespondent approval will affectHUDs geographic restrictions onloan origination and underwriting.

In the final regulation, HUDimposes some significant restrictionson the activities of TPOs, includingprohibiting these entities fromclosing FHA-insured loans in theirown name and directly accessingFHA Connection.

According to K&L Gates, Thisprohibition effectively will put anend to the purchase of FHA-insuredloans on a table-funded basis for

nw FHA rgulaiuld mpac tilAg od halhe attempt to strengthen the FHAs financialoundness may force many loan correspondentsnd small mortgagees to eit the FHA loan market.



15/19

www.alta.org > June 2010 > TitleNTitleNews > June 2010 > www.alta.org

industry news

industry news

Investors Title Insurance AnnouncesPromotions

Investors Title Insurance Co. announced a number ofkey promotions. Michael Aiken has been promotedto senior vice president, compliance officer, andsenior counsel national markets; Joanna Tillottsonhas been promoted to senior vice president agencyand branch operations; and Brandee Garren hasbeen promoted to vice president underwriting andoperations support.

Aiken began his career with the company in 1998at which time he relocated to the Triangle areaand accepted the position of staff attorney in theunderwriting support group. He has acted in a numberof capacities since then including as title attorney andcompliance officer. In these roles, Aiken has supportedthe companys agency network with respect tounderwriting and risk management functions and hasserved as the companys primary resource for federalcompliance issues.

Tillottson joined the company as an underwritingsupport coordinator in 2003 and quickly rose toa leadership position as vice president nationalmarkets operations. In her new role, Tillottson willoversee operations of the companys agency networkoperating in 26 states and the District of Columbia,and the companys branch offices.

Over her 14-year career with the company, Garrenhas performed as a team leader of the underwritingsupport group, training manager, operationalrepresentative for a number of market areas, and, morerecently, as assistant vice president - underwritingand operations support. Garren will assume expandedleadership and management responsibilities within theunderwriting support group which provides operationsand underwriting support to the companys agencynetwork.

Stewart Bolsters Commercial OperationsStewart National Title Services has announced theappointment ofRenee Haglund Tierneyas vicepresident and manager of its Minneapolis, Minn.,national commercial operations. In this position,

Tierney will be responsible for growing Stewartsnational commercial business, with a focus onexpanding the companys market share in the mid-

western region of the U.S. Tierney is a recognizedleader in the title industry with more than 30 years ofexperience. Previously, she held a range of positions athe state, regional and national levels for both Stewarand Chicago Title Insurance Co., and most recentlyserved as a management consultant.

Alliant National Adds Vice Presidentand Missouri Agency Manager

Alliant National Title Insurance Co. announced thatKyle Rankhas joined the company as vice presidentand Missouri agency manager. Rank is responsible fordeveloping relationships with agents, and marketingand management of Alliant Nationals Missouri agencyprograms. His duties also include development ofeducational programs for agents and their customers,and licensing, underwriting and expansion into adjacenstates. Rank has more than 17 years of executive legalmanagement experience for several leading nationalunderwriters and agencies. He served four years aspresident and co-owner of a multi-state agency that grefrom inception to a $7 million gross revenue company.

RedVision Names VP of OperationsRedVision, a national provider of real property researchand data solutions, announced thatTom Allbee has

joined the company as vice president of operations. Afinancial services industry veteran, Allbee has 20 years oexperience in senior management and operations roles.Prior to joining RedVision, Allbee was a managingdirector at UBS Investment Bank where he served aschief of staff to the chief operating officer and chiefexecutive officer of UBS Securities LLC.

Ppl h Mv

A vendor managementcompany jointly ownedby First American andKeyBank will close June30.

The decision to close theVMC was made becauseits largest client, KeyBank,switched providers.KeyBank began sendingits settlement work inDecember 2009 to PHHMortgage Corp. PHHis a public company thatprovides beginning to endsolutions for KeyBanksmortgage needs, such asloan origination, products,pricing, secondarymarketing and servicingfor all saleable loans, thebank said.

SecoLink PresidentPatrick Ridley said thefirm is laying off all 62employees. The phasedlayoffs began March 12and will continue through

June 30.SecoLink, founded in

1999 and operated byKeyBank under its currentname since 2001, is basedin Amherst, N.Y. Thecompany handled back-endmortgage operations including title insurance,appraisals, flood and closingservices for KeyBank,

which owns 49 percentof the company. FirstAmerican purchased amajority stake (50.1 percent)in the company in 2007.

Joint-Owned VMC with KeyBank to Close

Mortgage originators cannow create more accurateGood Faith Estimatesquickly and efficientlyusing the SmartGFEService, a source for realestate closing costs andassociated data in themarketplace. The newservice from ClosingCorpoffers a data solutionfor sections 4 through 8on the 2010 GFE form,

which is backed by thecompanys SmartGFECompliance Guarantee.

The SmartGFE Serviceprovides real-time feesfrom local and national

vendors in nine categoriessuch as title insurance,settlement services,closing attorneys,home inspections, pestinspections, appraisals,and more, as well as localtaxes and recording feescalculated specifically foreach transaction to helpcreate GFEs that meetHUDs new mandatedtolerance limits.

ClosingCorp Introduces New Services to HelpLenders Comply With RESPA Rules

Iowa amended theMortgage Bankers andBrokers Act (MBBA)to require licensing forclosing agents effective

July 1, 2011. Under theMBBA, as amended,closing agent is definedas a person who providesreal estate closingservices, and who is otherthan the lender, seller,purchaser, or borrower

with respect to a particularreal estate transaction.

The performance ofnotary functions isspecifically excluded fromthe definition. Among

those exempt from therequirement are attorneys

who are licensed topractice law in Iowa. Alsoexempt are an attorneysemployees or agentsacting under the attorneysdirection, provided thetransaction is of the type

where the attorneysconduct is regulated bythe Iowa Supreme Court.A closing agent who isaffiliated with an attorneyis not exempt if theclosing agent engages intransactions that do notmeet this exemption.

Iowa to License Closing Agents

A group of employeesand investors recentlycompleted a buyout ofa Waco, Texas-basedtitle agency from FirstAmerican Title Co.

The deal was finalizedApril 1, according toPenny Dulock, presidentof local operations. Thecompany, now called FirstTitle Co. of Waco LLC,has three offices and morethan 20 employees.

The new owners includeDulock; operationsmanagers Patricia Taylor,Loretta Janek andKaren Moore; and SusieHerbelin, who overseesaccounting for the firm.One of the six investors,

Terry Stevens, originallyowned the title company

with the law firm JohnSheehy before selling toFirst American in 1998.

Group Purchases Title Agencyfrom First American


16/19

www.alta.org > June 2010 > TitleN

member news

nw Mmb

aaBaMaCharles Trimmier, IIICooperative Title Services, L.L.C.BirminghamMichael E. BrodowskiHuntsville

CooraDoPaul MotzSouthwest Title CompanyAlamosa

foriDaLana DargaiGlobal Title CompanyBonita Springs

Jason GullettGullett Title, Inc.Palatka

Chris BlackWinged Foot Title, LLCFort Myers

georgiaJason LingerfeltJason B. Lingerfelt, LLCKennesaw

MiNNesoTaMarv KarthExecutive Title Services, Inc.West Saint Paul

MissouriMichael GodatTouchstone Title And AbstractChesterfield

Ne JerseyJacob ElkesDirect Title CorporationFreehold

Sherry BremermanEmpire Title & Abstract Agency, LLCYardville

Suzanne HeunemanPhoenix Associates Title Agency,Inc.Chester

Ne yorkJodi BrustAmerican Dream Abstract Inc.East Patchogue

Ilan BruhimEverest Abstract Services, LLCNew York

Linda HaltmanHallmark Abstract Services, LLCJericho

Clarence CastelRockwest Abstract, Ltd.New City

ohioApril PercyDynamic Title Agency, LLCMedina

ohio CoNT.Jeffrey RulonProfessional Title Agency, Inc.Hamilton

PeNNsyvaNiaSandi Foxx-JonesThe Abstract CompanyPhiladelphia

Cindy HawkTR&A Abstract CompanyPittsburgh

souTh CaroiNaD. Carlyle Rogers, Jr.D. Carlyle Rogers, Jr., P.C.Mt Pleasant

virgiNiaYuJong ChongMetroway Settlement Group, LLHerndon

Acia Mmb

foriDaJohn SimmonsAntilles Group, LLCOrlando

MiChigaNByron GallagherThe Gallagher Law Firm, PLCLansing

DJSP Enterprises, aprovider of processingservices for the mortgageand real estate industries inthe United States, signeda definitive agreementto acquire Timios Inc.,a national title insuranceand settlement servicescompany.

Timios, a licensed titleinsurance and escrowagent operating in 38states, is headquartered in

Westlake Village, Calif.,with additional officesin Houston and Plano,

Texas.DJSP Enterprises will

acquire Timios for $1.5

million in cash, 200,000ordinary shares of DJSPEnterprises, and up to100,000 ordinary sharesof DJSP Enterprises to beearned upon achievementof defined performancemetrics.

Timios reportedly hrevenue of $5.05 milliofor the last 12 months

Processing Services Company Acquires Title Agency for $1.5M

inside ALTA

reliant Title, located inVirginia Beach, Va.,garnered significantcommercial deals totaling

early $2.5 million after tworge national entities found thetle agency on ALTAs onlineembership directory.Matt Reass, director of marketing

r Reliant Title, said in a monthsme, Bridgestone Tires and aortune 500 defense contractor, bothontacted Reliant after doing a searchn ALTAs web site.

In October, Bridgestone had airestone tire shop in Norfolk, Va.,

hat was buying out a landlord. Eachde had legal counsel, but a titleompany was needed to facilitate the2 million cash transaction.

It went smoothly, Reass said.The counsel for Bridgestone wasp in Chicago. The sellers counselas in Texas and we were thetermediary. We dont do a lot of

commercial work, but it was a greatopportunity to learn.

Shortly after that deal, Reliantreceived a call from the defensecontractor, a global security companythat provides products, and solutionsin aerospace, electronics, informationsystems, shipbuilding and technicalservices to government andcommercial customers.

The company had six installationsin Hampton Roads that neededtitle work, including pulling deedsand plats. The contractor had been

working with another examiningcompany on the project, but was notpleased with the responsiveness.

They interviewed four other titlecompanies, but we go the job, Reasssaid. In about a month and a half,

we had to research archives that wentback to the early 1800s.

Reass had to obtain around 250documents, much of which dealt withland the government purchased ortook by eminent domain.

This was not the everyday run-of-the-mill real estate closings, Reasssaid.

Both projects were welcomed asthey came when business was slowingfor the title agency last winter. Both,according to Reass, were the directresult of being an ALTA member.

Beyond all of ALTAs advocacyefforts on behalf of the industry, theassociations membership directoryhas proven to be a valuable asset thathas helped new clients discover ourcompany, Reass said. Its one of thebevy of benefits that ALTA providesits members.

ALtA MmbhipBfi Hlp tilAgcy Lad nwmmcial BuiALTAs online Membership Directory proved highly

eneficial for one irginia-based title agency.


To share how ALTA membership

has beneted your operation,

send an e-mail to Jeremy Yohe

at [email protected].


17/19


tipac contributorstipac contributors

Dind cb mbs$5,000

Christopher AbbinanteFidelity National Financial Group, Inc.

Anne AnastasiGenesis Abstract Inc.

Mark BilbreyOld Republic National Title Insurance Co.

Terry BryanFirst American Title Insurance Co.

Diane EvansLand Title Guarantee Company

Pam DayDay Title Services

Dennis GilmoreFirst American Title Insurance Co.

Parker KennedyFirst American Title Insurance Co.

Frank PellegriniPrairie Title Services, Inc.

Kurt PfotenhauerAmerican Land Title Association

Michael PryorLenders Title Company

Mark WinterStewart Title Guaranty Co.

ed cb mbs$2,500 - $4,999

J. Herschel BeardMarshall County Abstract Co.

Mike ConwayFirst American Title Insurance Co.

omas HartmanFirst American Title Insurance Co.

John HollenbeckFirst American Title Insurance Co.

Steven NapolitanoFirst American Title Insurance Co.

Joshua ReisetterDakota Abstract & Title Co.

Paul and Connie SawtellDominion Title Corp.

ptin cb mbs$1,000 - $2,499

Marty AskinsStephens County Abstract Company

Karen BrownBonne

volume89_issue06

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