http://www.thelegaldescription.com/ME2/Console/XmlSyndication/Display/RSS.asp?xsid=8FE6AA0F534F42A59115784D88F90421 Settlement services legal, regulatory and compliance news and information http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=D7A43141AFDB448CA23741ABB1A0D5F6 Nebraska Gov. Dave Heineman announced that Ann Frohman , director of the Nebraska Department of Insurance (DOI), is planning to step down from the post she has held for nearly three years to pursue other opportunities in the private sector. She has been with the State of Nebraska for more than 20 years. Her resignation is effective Oct. 29.  “Frohman has worked hard to ensure a fair regulatory climate and competitive marketplace for insurers in Nebraska ,” Heineman said. “I appreciate her knowledge of the insurance industry, particularly during these last few months as we have sought information on the federal health care law and its impact on individuals, families and businesses in our state. I wish her well in all of her future endeavors.” DOI regulates and examines all insurance companies doing business in the state, along with certain related operations. During Frohman’s tenure, the department was instrumental in preserving the national title insurance market in connection with the housing crisis. She was instrumental at the National Association of Insurance Commissioners on national and international issues and in advancing financial reform of insurance groups. Frohman said, “It has been my sincerest pleasure to serve the citizens of Nebraska . I have the utmost respect for the dedicated employees of the Department of Insurance. They are among the best financial regulators in the nation.” Frohman became director of the department in November, 2007 after serving briefly as acting director. She had served as deputy director of the department since 2004 and was spent four years as general counsel. She started with the department in 1990, working for six years as a staff attorney providing legal counsel to DOI and state officials. In addition to her work with DOI, Frohman worked as the State Risk Manager with the Nebraska Department of Administrative Services and clerked for a Nebraska Supreme Court justice. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Wed, 01 Sep 2010 00:00:00 EST D7A43141AFDB448CA23741ABB1A0D5F6 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=650157BB6CD24675ADBC9DD1A8C9DF27 With Insurance Commissioner Steve Poizner leaving office in January, and the election only a few months away, California voters will have to choose between two candidates vying to replace him.   While Poizner failed to become the Republican candidate for governor, Assemblyman Mike Villines hopes to be elected to Poizner’s old post. Villines was elected to the California Assembly in 2006. Prior to his election, he served as an aide to former Gov. Pete Wilson and chief-of-staff to former state Sen. Chuck Poochigian.    Villines graduated from California State University , Fresno with a degree in political science. He lives in Shaver Lake , Calif. , with his wife and three children and owns a small business.   On Nov. 2, Villines will be up against Assemblyman Dave Jones , the Democratic candidate. Jones is currently serving his third term in the General Assembly. He served as a Sacramento City Councilmember and worked as a legal aid attorney with Legal Services Northern California. He also served in the Clinton administration as special assistant and council to U.S. Attorney General Janet Reno . Jones is a graduate of DePauw University , Harvard Law School and Harvard’s Kennedy School of Government. He and his wife, Kim Flores , live in Sacramento with their two children. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 30 Aug 2010 00:00:00 EST 650157BB6CD24675ADBC9DD1A8C9DF27 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=1CB84D95C28A4F74A16DD267C5766A66 The board of directors of the Property Records Industry Association (PRIA) approved the formation of a Geographic Information System (GIS) workgroup, which will fall under the direction of its technology committee, reported PRIA President Richard Bramhall .   The GIS workgroup is co-chaired by Peirce Eichelberger , International Land Systems, who represents the business sector; and Diane Swoboda Peterson , Woodbury Co., Iowa , who represents the government sector.   Local, state and federal agencies are concerned with land-related decisions pertaining to real property ownership, land use, taxation, planning and permitting, as well as infrastructure development, public safety, transportation and many other local government functions. GIS is a technology field that incorporates geographical features with tabular data in order to map, analyze and assess those issues.   County recorders collect land records focused on the rights and restrictions that impact real property, but the documents collected by recorders also contain spatial data, primarily the address and legal description information, related to the referenced parcel. Approximately 70 percent of local government offices have incorporated GIS for use in their offices; yet, in many cases, GIS is not integrated with the recorder’s office, PRIA stated.  The untapped potential of government-managed land information lies in the ability to integrate the land records within the overall workflow of information in a government office — automatically assigning the new ownership information to the parcel in question and providing that information to the tax assessor’s office, or moving permitting information through the GIS to the assessor and land recorders so when records are filed, the various records systems are joined automatically.   This allows government to better plan, analyze and provide timely and accurate information for increased productivity, the organization stated. So, the PRIA GIS workgroup will collaborate with other GIS interest groups to establish standards, procedures and best practices for data exchange between GIS and land records systems to facilitate the sharing of information and improve performance, security and revenue opportunities.   “This is an exciting opportunity to improve efficiency in two important land records functions,” Eichelberger said. “County recorders and GIS offices have both leveraged cutting-edge technology for years. The work products of this new PRIA workgroup will help integrate those technologies going forward.”   “Anything we can do to improve communication and understanding between government offices is a positive step for the citizens we serve,” Swoboda Peterson said.   Specific questions on this new GIS workgroup can be directed to the PRIA technology coordinator at mladd@priamail.us . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Wed, 25 Aug 2010 00:00:00 EST 1CB84D95C28A4F74A16DD267C5766A66 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=D54E6F8A5B404EE1B0A1306F99CD56AC Recent cases of corporate identity theft and cyber fraud have put title agents on the alert concerning the safety of their overall business as well as their escrow accounts. Agents are scrambling to put more effective controls in place to build a stronger bulwark around their companies. What can agents do to ensure the safety of both their identity and their accounts against internal and external threats?  On Sept. 16, October Research Corp. will host a Webinar to outline what agents can do to put in place protocols to prevent internal escrow fraud as well as cyber fraud. Information about the Webinar, Combating Internal Fraud: People, Processes and Technology Firewalls , can be found at www.octoberstore.com . The Webinar will feature RynohLive President Dick Reass, Agents National Title Insurance Co. CFO Brent Scheer and RynohLive COO Rafael Toledo Jr . and will be moderated by The Title Report editor Jennifer Kovacs .   Toledo, who has more than 25 years experience in criminal investigations, both as a police officer and a private legal investigator, will share some dire warnings for title agents about new fraud schemes he is seeing in the marketplace.  “A national bank called us recently and had a unique situation,” Toledo recalled. “They loaned some money to a borrower whose identity had been stolen. But here was the interesting piece: The title agent and policy they received were also fraudulent.   The identity of the agent had been stolen.”  Toledo recounted that the fraudsters had gone online to a state licensing site and changed the address of the tile company and the registered agent under that company’s name. Once they did that, it appeared that they were operating a legitimate title company using a legitimate underwriter.   “They opened a checking account using the agent’s stolen identity and then processed a loan like they were a title agent for a borrower who had great credit — whose identity was stolen as well. When the money was sent by the bank to the title agent to close, they stole the money and sent the bank a fraudulent closing protection letter and policy. The bank didn’t find out until 30 or 60 days later when there was no payment,” Toledo said.  According to Reass, there are many things agents can and should be doing to protect their accounts.   “It’s a combination of account management, what you need to do to work effectively with your bank to protect your company, and what you can do to put up better firewalls against cyber fraud,” he said.  During the Webinar, Reass and Toledo will cover a wide range of topics including the necessity of three-way reconciliation and daily reconciliation; the importance of choosing the right software, procedures and bank; the need for the entire staff to be thoroughly grounded in what are truly “good funds;” and other basic internal processes that can prevent agents from becoming a target for internal or external threats.   Combating Internal Fraud: People, Processes and Technology Firewalls will air Thursday, Sept. 16, 2010, at 2 p.m. ET. To register or to order a recording of the Webinar, visit www.octoberstore.com or call (877) 662-8623 ext. 7221 for more information. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 23 Aug 2010 00:00:00 EST D54E6F8A5B404EE1B0A1306F99CD56AC http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=2B14D69724404BD395F6C18987938411 The Department of Banking and Insurance commissioner in New Jersey issued a bulletin on Aug. 2 to clarify fee disclosure requirements under New Jersey law while maintaining compliance with the new Good Faith Estimate (GFE) and HUD-1 Settlement Statement forms.  Under Bulletin No. 10-17, Commissioner Thomas Considine said the new RESPA forms that became effective on Jan. 1 as part of the Department of Housing and Urban Development’s (HUD) final rule are not consistent with what is required for fee disclosures under the New Jersey Administrative Code.  “Under the revised RESPA rules, the individual mortgage broker and banker fees that are described in N.J.A.C. 3:1-16.2 and that are required to be disclosed to the borrower are no longer separately disclosed on the GFE form, but are aggregated in blocks 1 through 11 of that form,” the bulletin stated. “Thus, the information that is permitted to be entered on the GFE form by the amended RESPA rules will no longer satisfy the disclosure requirements imposed by N.J.A.C. 3:1-16.3(d).”  N.J.A.C. 3:1-16.3(d) provides that, “not later than three business days after the lender receives the borrower’s application, or before closing of the loan, whichever is earlier, the lender shall provide the borrower with a Good Faith Estimate as a dollar amount or range of each fee for a settlement service which the borrower is likely to incur.” N.J.A.C. 3:1-16.3(d)2 provides that, “with respect to the settlement service fees imposed on a borrower by the lender (and not by third parties), the lender shall indicate which, if any, of such fees are refundable in whole or in part and the terms and conditions for such refund.” N.J.A.C. 3:1-16.3(d)3 provides that, “Good faith estimates of fees for settlement services which are made pursuant to, and conform to, federal Regulation X shall satisfy the disclosure requirement of this subsection, provided that the lender also makes the disclosures required by (d)2 above.” Considine said that the inclusion of fees for settlement services on the GFE as referenced in N.J.A.C. 3:1-16.3(d)3 do not satisfy New Jersey ’s disclosure requirements. HUD prohibits the alteration or customizing of the GFE and HUD-1 forms in order to meet state requirements. HUD has also made clear that state disclosure requirements are not preempted by the new RESPA regulations.  Because of the conflicts in the disclosure requirements between New Jersey law and RESPA, the New Jersey ’s Department of Banking and Insurance said it intends to propose amendments to conform its rules to the new RESPA regulations. However, until such amendments are adopted, Considine said mortgage lenders and mortgage brokers licensed in New Jersey will need to comply with both state law and RESPA. To do this, a separate form must be issued to the borrower along with the GFE and HUD-1.  “In order to satisfy the fee disclosure requirements of N.J.A.C. 3:1-16.3(d) without affecting the scope of required RESPA disclosures, the borrower should be presented with a New Jersey Disclosures Form that is completely separate and apart from the HUD forms, and on which all of the applicable origination and settlement fees encompassed in N.J.A.C. 3:1-16.2 are listed,” the bulletin stated. “The individual fees must be totaled by category, with the total amounts equal to the amounts shown on the various blocks and lines on the GFE form. In order to satisfy the requirements of N.J.A.C. 3:1-16.3(d)2, the New Jersey Disclosures Form should also identify which, if any, fees are refundable in whole or in part and the terms and conditions for such refund.”  The Department of Banking and Insurance recommends that the disclosure form be dated and signed by the borrower, and a copy of it should be maintained with the disclosure documentation in the licensee’s mortgage files. The form would be subject to inspection and examination by the Department of Banking and Insurance. The bulletin also stated that the New Jersey Disclosures Form should not be attached or referred to in any manner as an addendum or supplement to the GFE or HUD-1 forms.  “Until new rules or amendments are adopted, licensees should create and use their own New Jersey Disclosure Forms for these purposes, consistent with the content requirements,” the bulletin said. Document Systems Inc. reported that its flagship product, DocMagic, includes a New Jersey Disclosure Form. The Carson , Calif.-based document production company also said it is continuing its dialogue with the Department of Banking and Insurance to confirm whether the disclosure must list only those individual, applicable fees that are to be paid by the borrower or whether all such fees, regardless of the party who pays such fees ( e.g. , seller, lender), should nonetheless appear on the disclosure because they are fees charged to the borrower in connection with the loan.  “Pending clarification from the department, the [New Jersey Disclosure Form] reflects applicable origination and settlement fees charged to the borrower even though a third party may be paying for a particular fee,” Document Systems noted. The company said any revisions to its form based on updates from the Department will be announced.   The bulletin applies to all entities and individuals licensed or registered under the New Jersey Licensed Lenders Act and all entities and individuals conditionally approved under the New Jersey Residential Mortgage Lending Act. The bulletin also pointed out that the Department of Banking and Insurance does not believe the amended RESPA regulations affect the validity of the requirements established in the New Jersey Home Ownership Security Act, including the notice requirements set forth at N.J.S.A. 46:10B-26. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 23 Aug 2010 00:00:00 EST 2B14D69724404BD395F6C18987938411 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=222AA1B2692D411298C66986FB8765BE Public records and real estate visionary Carl R. Ernst , founder and former chief executive of Ernst Publishing Co., a company that will process more than 120 million transactions in 2010, died late last week. He was 68.   “We are deeply saddened by the loss of our founder, our leader and mentor,” said Gregory E. Teal , president and chief executive of Ernst Publishing. “It was his vision and understanding of the mortgage and real estate businesses that enabled our company to prosper over the past 20 years. We will miss his wisdom, leadership, experience and business insight.”   Ernst relinquished day-to-day control of the company in 2008.   In 1981, he joined the board of directors of InfoSearch, a public record industry pioneer, and became its general manager in 1984. The company would become the largest public record database provider and Uniform Commercial Code searching firm in the United States . Ernst gained a national reputation for his expertise on the subject. The Uniform Commercial Code has impacted commercial lending and real estate transactions since its inception in 1971.  Ernst participated in the sale and valuation of the company to Prentice Hall before becoming president of InfoSearch in 1986. A year later, he took over Prentice Hall Online, a combination of InfoSearch, Statewide Information Systems and other public record databases. He would merge the databases, in the process creating the first national database of public records. This database is still active today, owned and managed by Lexis/Nexis Corp.  Between 1987 and 1992, Prentice Hall Online amassed millions of public records throughout the nation. This database became a critical application for credit reports, lending, regulatory and law enforcement investigations.      After leaving the company in 1992, he acquired the rights to “The Uniform Commercial Code Filing Guide” (UCC Guide) to which most law firms, financial institutions and public record search/ file firms subscribe.      In 1995, Ernst created “The Real Estate Recording Guide Inc.,” which details addresses, fees and local practices necessary to record deeds, mortgages and related documents in the 3,600 county recording offices in the U.S. In 1992, he officially formed Ernst Publishing Co. LLC as the parent company to both the UCC Guide Inc. and The Real Estate Recording Guide. Under Ernst’s leadership, Ernst Publishing became the first company in the U.S. to standardize national land recording office fees and related information for all jurisdictions across the country. Today, the company has more than 1,000 clients and will process more than 100 million transactions this year. Since the 1990s, Ernst was a passionate advocate of the electronic recording of real estate documents, with a goal of increasing accuracy and efficiency for lenders, title agents and county recorders. He has also been credited with defining the three levels of electronic recording that have emerged as the industry standard.   In addition, Ernst was an early participant in efforts to establish nationwide data and interface standards for recording offices, including the first XML standard development in California . That effort was a precursor to the national standard-setting activities of the Public Records Industry Association, an organization he helped to create.  He was an early proponent of migrating publishing to the Web — and a successful one. For instance, in 2006, the Ernst Web site was accessed as many as 100,000 times a week by financial institutions and title companies that wanted to obtain county recording information as well as recording fee and tax calculations.  Ernst acquired the “National Release Guide,” a periodical that explains the law of each of the 50 states and Puerto Rico regarding release of mortgages and the reconveyance of deeds of trust.   During his career, he continued to work toward the creation and establishment of Revised Article 9, testifying before Congress. He subsequently testified in countless hearings, appearing as an expert witness on public record applications and privacy issues. In addition to his role at Ernst Publishing, from 1992 to 1998, he was editor-in-chief of BRB Publications Inc., a publisher of local, state and federal agency information that helps professionals find and search public records. He was also a member of the board of directors for Merlin Information Services.  Ernst, an entrepreneur, certified public accountant, computer programmer, pilot and avid skier, attended Princeton University and graduated from Russell Sage College in 1967. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 23 Aug 2010 00:00:00 EST 222AA1B2692D411298C66986FB8765BE http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=F2BDE3678A674A76BA5BB3726A16D12A Communities that are currently struggling from the effects of fraudulent mortgage transactions may still be suffering years from now, according to research released by Interthinx. In its quarterly Mortgage Fraud Risk Report , Interthinx notes that six of the ten riskiest MSAs (metropolitan statistical areas) in the nation were in the top ten a year ago, and all ten of the MSAs that were at the top of the list for fraud last year are still in the top 20 today.   The report analyzes national fraud risk and indices for the four most common types of mortgage fraud risk. Overall, analysts found that fraud risk increased by 12 percent, compared with the same period a year earlier. Currently, the national fraud risk index is 145 (n = 100).   Other findings in the quarterly report include:   Nevada replaces Arizona as the state with the highest fraud risk, though both states have indices about 40 points greater than that of third-place California . The high indices in Nevada and Arizona are due mostly to the disproportionately high refinance risk in those states. ZIP-code-level analysis showed that the majority of the ten riskiest ZIP codes are, not surprisingly, located within MSAs that are in the “very risky” category. However, two of the three riskiest ZIP codes are located in Chicago , which at the MSA-level has an index less than the national value. The identity fraud risk index had a quarter-on-quarter increase of 10 percent for the second consecutive quarter, the only type-specific fraud index to display a strong increasing trend over the last three quarters. The occupancy fraud risk index decreased by 9 percent from the previous quarter. It fell 11 percent between the fourth quarter of 2009 and the first quarter of 2010.   The full report is available at http://www.interthinx.com/contact/registration.html?docID=6 . The Mortgage Fraud Risk Report is an Interthinx information product that the company’s team of fraud experts created. The report was prepared with input from Constance Wilson, Ann Fulmer, Shane De Zilwa, and the Interthinx analytics team . This is the fifth time the company has released its quarterly report. The information is designed to provide deeper insight into current fraud trends through analysis of the extensive pool of data the company amasses from the industry’s use of the Interthinx FraudGUARD® loan-level fraud detection tool. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Wed, 18 Aug 2010 00:00:00 EST F2BDE3678A674A76BA5BB3726A16D12A http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=8DE5FE6644B74C9A98888EDCD160A5A7 In June 2009, when the U.S. Treasury first proposed creating a new government consumer protection agency that would oversee RESPA and other consumer protection statutes, The Legal Description immediately began rolling out a wave of coverage on what turned into a more than 2,000-page bill to reform the nation’s financial regulatory structure. On July 21, this sweeping legislation became law, and predictions swiftly surfaced from trade associations and members of the legal community that it will result in thousands of pages of new regulations, along with numerous reports and studies.    To help the industry navigate these changes and keep up to date with new changes, The Legal Description and its sister publications The Title Report and Valuation Review have each established a repository of stories and other resources on their Web sites to help keep readers informed about the aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act that impacts them.   In addition, October Research Corp. announced Aug. 17 that it has created a new page on the Web site for The Legal Description’s sister publication, RESPAnews , to provide the mortgage, real estate and settlement services industries with additional relevant updates, analytical features, research tools, special reports and breaking-news stories regarding the new Dodd-Frank Act.  “We understand that RESPA is an integral piece to this behemoth bill, and while we will continue to provide the important RESPA news of the day as we have for the past seven years, we know this bill will affect our readership on a larger scale. That is why we are expanding our coverage to include a Dodd-Frank resource and news site for our readers,” said Mark Kuhar , October Research Corp.’s director of editorial services.  While the existing Dodd-Frank information on RESPAnews.com comprises an already comprehensive resource, the site is being expanded to provide the industry with the information it needs to stay abreast of the creation of the new Consumer Financial Protection Bureau, its rulemakings and the taking over of existing consumer financial protection statutes. It will include news pieces and updates on the agencies named in the act and their directives under it and it will also provide news reports regarding how the various portions of the act affect the different industries it reaches. Coverage will also include mortgage reform and other news impacting the financial services sector.  “The potential impact of this law on the various markets we reach is enormous,” said October Research Corp. COO Chris Casa . “Because of this, we will create comprehensive information portals for each of our market publications. RESPA News will feature a comprehensive Dodd-Frank Act resource that will provide our customers with a wealth of knowledge and a means to follow the important updates of the regulatory reform measures coming out of this new law.”  Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Wed, 18 Aug 2010 00:00:00 EST 8DE5FE6644B74C9A98888EDCD160A5A7 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=E76578524F324661AE46FE3C6C6C383A After the demise of captive reinsurance and the shutting down of hundreds of illegal affiliated business arrangements, it was only a matter of time before the regulators started looking at marketing and workshare agreements. HUD’s June 25 interpretive rule regarding home warranty company compensation arrangements with real estate agents is the latest salvo in an ongoing query into marketing agreements that is motivating nervous agency owners to look at their agreements with a more critical eye.  What exactly did HUD say in the June 25 interpretive rule that has now muddied the waters about HUD’s intentions around marketing agreements?  On Sept. 1, October Research Corp. will host a Webinar to outline what HUD had to say in its interpretive rule and what elements of the rule could leave current marketing agreements in a precarious position. The speakers will also address the outright assault on the way home warranty companies and real estate agents currently work together to deliver this important product to market. Information about the Webinar can be found at www.octoberstore.com .  The Webinar discussion will include K&L Gates partner Phil Schulman and National Association of Realtors’ Director of Real Estate Services Ken Trepeta and will be moderated by RESPA News editor Kelly McCarel . The one-hour Webinar will feature an in-depth analysis of the rule, plus a look at the seven most troubling issues that have emerged from the interpretive rule.  “Read narrowly, the interpretive rule states the obvious — namely, that a settlement service provider cannot pay a fee for the referral of a settlement service,” Schulman said. “The imprecision, however, with which HUD crafted this interpretation leaves us questioning what the department is really trying to say.”  Trepeta agreed that the rule leaves many unanswered questions and has forced settlement services providers to re-evaluate the agreements they currently have in place. One of the concerns, Trepeta noted, is around what HUD didn’t say. “One of the concerns we have heard from a number of real estate agents is that the interpretive rule doesn’t mention the flat fee agreements between home warranty companies and real estate agents,” Trepeta said. “It creates a lot of uncertainty around how this rule might apply to those agreements as well.” During the Webinar, Schulman and Trepeta will address: What is an interpretive rule and what weight does it carry; An overview of HUD’s June 25 interpretive rule; What new elements the rule introduces; Analysis of the “gray” areas and industry concerns; and Actions listeners should take to review current marketing agreements. HUD’s Interpretive Rule and the Future of Marketing Agreements will air Wednesday, Sept. 1, 2010, at 2 p.m. ET. To register or to order a recording of the Webinar, visit www.octoberstore.com or call (877) 662-8623, ext. 7221 for more information. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 16 Aug 2010 00:00:00 EST E76578524F324661AE46FE3C6C6C383A http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=B6EB073AD031434092501F4F2926ABAE RamQuest Inc. announced that its flagship product for title and escrow production, Complete Closing Enterprise, is in full compliance with the new requirements recently issued by the Department of Veterans Affairs (VA) for use of an addendum to the HUD-1 Settlement Statement form. RamQuest’s latest version of Complete Closing Enterprise, 6.5.2, was made available to all customers last month and features a 2010 HUD-1 Addendum that is versatile enough for use in many different scenarios whenever additional itemization is needed beyond the information contained on the HUD-1.      Announced in a VA Circular on July 30, with an implementation requirement for all loan applications taken on or after Oct. 1, 2010, the VA called for an itemization of any lump sum credits to Veterans and also for title services charges. The circular synchronizes VA closing requirements to the Department of Housing and Urban’s Development 2010 RESPA requirements by stating that the VA will continue to require itemization of certain fees, adding that itemizations should be done in an attachment or addendum to the HUD-1 and not on the HUD-1 form itself.   This is in keeping with the trend the VA started with its Jan. 7, 2010, circular calling for a breakout of loan origination charges on a separate worksheet. The complete July 30 circular can be viewed at www.benefits.va.gov/homeloans/circulars/26_10_9.pdf . and clarification to language can be found in an Aug. 6 circular here: www.benefits.va.gov/homeloans/circulars/26_10_9_change1.pdf .  “As an industry leader from the onset of RESPA Reform, RamQuest has successfully delivered all of the required regulatory changes well in advance of deadlines ensuring that our customers have ample time for preparation, implementation and training in their operations, and this is no exception,” commented Mark McElroy , president and CEO of RamQuest, Inc. “Just as critical to our customers’ success during this RESPA Reform period, has been RamQuest’s ability to go beyond the regulatory compliance and also deliver 2010 HUD-1 support that has eased transition difficulties and helped customers gain competitive advantage and grow market share. This support has ranged from delivering education and consulting services for customers, to reform-friendly product features like attachable Breakout Reports that itemize 801 and 1101 totals and the ability to automatically handle the Page 1 debit/credit requirement for Owner’s Title Premiums.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 16 Aug 2010 00:00:00 EST B6EB073AD031434092501F4F2926ABAE http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=58A5A6BE75B64EAB88ACC270A34CC786 Pennsylvania Governor Edward G. Rendell named Robert L. Pratter to serve as acting Insurance Commissioner for the Pennsylvania Insurance Department.   Pratter has served as the executive deputy general counsel for litigation with the state’s Office of General Counsel since 2008.   During his extensive legal career, Pratter has specialized in regulatory, corporate and judicial proceedings affecting the insurance industry. He has also led complex commercial litigation and has extensive experience in regulatory matters before various commonwealth agencies.  Prior to his public service, Pratter had been senior vice president and general counsel for PMA Capital Corporation.  A cum laude graduate of Yale University (B.A.) as well as the University of Pennsylvania Law School (J. D.), Pratter joined the Philadelphia law firm of Duane, Morris & Heckscher (now Duane Morris LLP) upon his Penn Law graduation.  He served as a partner in the firm for over 25 years, chair of the Administrative Law Group and a member of the Partner’s Board and other substantive committees.   Pratter will succeed Joel Ario , who has served as commissioner since July 2007.   Ario is leaving to take on new health reform challenges at the U.S. Department of Health and Human Services. As of August 30, he will be the director of the Office of Insurance Exchanges of the Office of Consumer Information and Insurance Oversight. This new position will be responsible for the state-based, health insurance exchanges that every state will establish by 2014. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Wed, 11 Aug 2010 00:00:00 EST 58A5A6BE75B64EAB88ACC270A34CC786 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=4E86604C055949A6A7DB1AE750E0520C After President Barack Obama signed sweeping legislation to reform the financial services industry last month, many have been waiting to see what next steps the government will take to implement the reform and what other changes could be on the horizon. U.S. Treasury Secretary Timothy Geithner provided some insight into the process during a speech at New York University ’s Stern School of Business on Aug. 2. During the speech, he noted that the industry’s core challenge in this process is “to restore the trust and confidence of the American people and your customers and investors around the world.” He provided industry members with several suggested steps they can take to achieve that goal: Don’t wait for Washington to draft every rule before starting to change the way you do business; Get ahead of the process and in front of competitors; Find new ways to improve disclosure for consumers; Demonstrate to business customers that you are ready and willing to take a chance on them; Change how you pay executives; Make sure you have board members who understand the business and the risks the company is taking; and Focus on improving your financial position so that financial ratings, cost of capital, the amount they have to pay to borrow, all reflect financial strength and earnings prospects. He noted that these are things industry members can do right now, but that a large part of the responsibility of the reform will fall on federal regulators.   “Those of us in government — policy-makers, regulators and supervisors — must make sure that these reforms meet the promise of the law; that these reforms provide both the necessary protections against financial excess and the benefits of financial innovation,” Geithner said.    He outlined several principles that will guide the work going forward. They include: An obligation of speed — “We will move as quickly as possible to bring clarity to the new rules of finance. The rule-writing process traditionally has moved at a frustrating, glacial pace. We must change that,” he said. Full transparency and disclosure — “The regulatory agencies will consult broadly as they write new rules. Draft rules will be published. The public will have a chance to comment. And those comments will be available for everyone to see,” Geithner said. No layering on top of old rules — “Everyone that is part of the financial system — the regulated and the regulators — knows that we have accumulated layers of rules that can be overwhelming, and these failures of regulation were in some ways as appalling as the failures produced where regulation was absent,” he said. Innovation protected — “Our system allowed too much freedom for predation, abuse and excess risk, but as we put in place rules to correct for those mistakes, we have to strive to achieve a careful balance and safeguard the freedom, competition and innovation that are essential for growth,” he said. Level playing field — “We will make sure we have a more level playing field —not just between banks and non-banks here in the United States — but also between our financial institutions and those in Europe, Japan, China and emerging markets who are all competing to finance global growth and development. We will do this by setting high global standards and blocking a ‘race to the bottom’ from taking place outside the United States ,” he said. Order and coordination —“We will bring order and coordination to the regulatory process, so that the agencies responsible for building these reforms are working together, not against each other. This requires us to look carefully at the overall interaction of regulators designed by different regulators and assess the overall burden they present relative to the benefits they offer,” Geithner said.   Geithner stated that each of the agencies involved in implementing financial reform, including the Treasury, the Federal Reserve, the Securities and Exchange Commission, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., are in the process of outlining how they propose to prioritize the rules they have to write and setting initial dates for when the public will be able to comment on draft rules.   He also said that when the Financial Stability Oversight Council meets for the first time in September, the group will “establish an integrated road map for the first stages of reform and put that in the public domain.”   Geithner outlined for the group the next steps he expects to take in four key areas: consumer protection, government sponsored enterprise reform (GSEs), derivatives market reform and constraining risk taking. He said he wants to move quickly to give consumers simpler disclosures for credit cards, auto loans and mortgages.   “One of the ways we intend to do that is by combining the two separate and inconsistent federal mortgage disclosure forms that consumers currently get,” Geithner said. “Next month, we’ll convene mortgage companies, consumer advocates, housing counselors and other experts to gather ideas on how to do that. We’ll take the best ones, test them on consumers and then soon be able to unveil a new, easy to understand, federal disclosure form.”   He also noted that the government will be inviting public comment on new national underwriting standards for mortgages, “so that we can begin to shape the reforms of the mortgage market.”   Geithner said later this month, the Treasury Department will bring together academic experts, consumer and community organizations, industry participants and other stakeholders for a conference focused on the future of housing finance, using it to explore various models of reform. He also noted that Rep. Barney Frank , D-Mass., chairman of the House Financial Services Committee, has planned a series of hearings on housing finance reform for this fall.   To read the full speech, go here. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 09 Aug 2010 00:00:00 EST 4E86604C055949A6A7DB1AE750E0520C http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=B0D3AF1195CD4BDEAA8C1C245B196F86 The National Notary Association (NNA) announced that Vice President and Chief Financial Officer Jane Eagle has been appointed to the post of executive vice president in recognition of her outstanding leadership and visionary contributions to the nation’s largest organization serving America’s 4.8 million notaries public. A 2009 San Fernando Business Journal Top Chief Financial Officer, Eagle is only the second person to hold that post in the NNA’s 53-year history.  “Jane has been instrumental in revitalizing the Association and finding innovative ways to effectively serve our members and America ’s Notaries,” NNA President Milt Valera said in announcing Eagle’s promotion. “Her financial savvy, leadership and vision have made it possible for the NNA to stay focused on its core mission throughout these challenging times.”  “I am extremely honored to take up this new opportunity,” Eagle said. “The NNA is poised to do some great things to advance the educational and service needs of our membership, and I am excited at the prospect of helping our association realize those opportunities.”  Eagle joined the NNA as chief financial officer in December 2007. Since then, she has improved the association’s fiscal accountability and management systems while providing crucial leadership in many other areas of the organization.  Eagle was promoted to vice president in March 2009, and her exemplary work caught  t he attention of the Los Angeles-area business community when she received a “Top Chief Financial Officer Award” in 2009 from the San Fernando Valley Business Journal .  Before joining the NNA, Eagle built a strong career of accomplishment and success. She spent five years as the chief financial officer for LoanWeb.com, and 11 years at MetLife Investors where she rose through the ranks to become CFO. She graduated cum laude with a Bachelors of Science Degree in Accounting from Loyola Marymount University in Los Angeles and subsequently earned her license as a Certified Public Accountant. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Wed, 04 Aug 2010 00:00:00 EST B0D3AF1195CD4BDEAA8C1C245B196F86 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=45E1FD8A0BA24C9D8B0B0BD1EE7CE8A6 A wide array of industry and consumer advocacy organizations launched The Coalition to Stop Wall Street Home Resale Fees with an appeal to U.S. Treasury Secretary Timothy Geithner to ban Wall Street home resale fees (also known as private transfer fee covenants), which have already been restricted in 17 states because of their adverse impact on homeowners and homebuyers.   Members of the coalition delivered a letter to Geithner and representatives at the Department of Housing and Urban Development (HUD), Federal Housing Finance Agency, Federal Trade Commission, Securities and Exchange Commission, Farm Credit Administration, Department of Veterans Affairs, Federal Reserve Board, Deferral Deposit Insurance Corp., National Credit Union Administration and Office of Thrift Supervision, declaring their opposition to Wall Street home resale fees and calling on the Obama administration to ban their use.   Manhattan-based Freehold Capitol Partners is leading the push to add these fees to home purchase contracts. The fees require that a percentage of the final sale price of a home be paid to a private third party every time the property is sold, typically for 99 years. Freehold is attempting to then sell the right to collect these fees on Wall Street.  The coalition, which includes the National Association of Realtors, American Federation of State, County and Municipal Employees, the American Land Title Association, the Center for Responsible Lending, the Georgia State Trade Association of Non-Profit Developers, Hawaii Advocates for Consumer Rights, Institute for Liberty, Interfaith Housing Center of the Northern Suburbs, Property Rights Alliance, the National Council of La Raza and the Transport Workers, has already been active raising awareness about the issue and taking action to stop what they are referring to as dangerous fees.   To date, 17 state legislatures in Arizona, California, Florida, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, North Carolina, Ohio, Oregon, Texas and Utah have recognized the dangers of Wall Street home resale fees and have restricted their use.  An official with the Federal Housing Administration confirmed that the government will not insure mortgages for properties with Wall Street home resale fees and HUD confirmed that these fees violate HUD’s regulations.   In the letter to Geithner, the coalition said that these fees have also gotten the attention of Congress, noting that at a Congressional hearing in May, Rep. Brad Sherman , D-Calif., called these fees a “new predatory scheme.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 02 Aug 2010 00:00:00 EST 45E1FD8A0BA24C9D8B0B0BD1EE7CE8A6 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=2FC1F7714BD94D65AE31DA6EEE05A3DA Hawai`i Governor Linda Lingle has named Gordon Ito as insurance commissioner for the Hawai`i State Insurance Division. As head of the Insurance Division, Ito will oversee the insurance industry in the State of Hawai`i , which writes $4.5 billion in premiums, and includes 1,000 insurance companies and 40,000 insurance agents. “We are fortunate to have Gordon Ito accept the important position of Insurance Commissioner,” Lingle said. “Mr. Ito has been with the Department of Commerce and Consumer Affairs for more than 17 years, and is highly experienced in all areas of insurance.” Ito has served as chief deputy insurance commissioner since 2000.  Prior to that, he worked as the supervising staff attorney of the Insurance Division from 1993 - 2000.     “The Insurance Division is faced with many challenges due to the current economic climate, healthcare reform, and the financial services reform on the horizon,” Ito said.  “Fortunately, we have an excellent and dedicated staff that has risen to the challenges over the years and will continue to do so for the people of Hawai`i .”   Ito earned an undergraduate degree in business administration from the University of Hawai`i , and a law degree from the William S. Richardson School of Law. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Wed, 28 Jul 2010 00:00:00 EST 2FC1F7714BD94D65AE31DA6EEE05A3DA http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=7B51F35DB6514FF7807D6607B2130BE6 The New Mexico Public Regulation Commission (NPRC) on July 27 appointed John G. Franchini as New Mexico superintendent of insurance by a 4-1 vote. Franchini will replace Morris Chavez, who resigned in May.   Franchini – a New Mexico native – boasts nearly four decades of insurance industry-related experience and said he looks to utilize that experience as he endeavors to move the NMPRC’s Division of Insurance forward.  “I’ve devoted the majority of my professional life to guaranteeing and protecting New Mexico policyholders’ rights with regards to their insurance,” Franchini said. “As superintendent of insurance, I will make sure New Mexicans have the protection, cooperation and assistance of the Division of Insurance in handling their insurance questions and needs.  “The division will respond to consumer needs whenever we’re called into action,” Franchini continued. “I look forward to continuing my work on behalf of the state’s fine citizens; I’m thrilled to have this opportunity.”  Prior to his appointment, Franchini served as vice president of government and industry affairs for the New Mexico Mutual Group (2004-2010). Prior to that, he served as vice president of Brown & Brown of New Mexico, Inc. (1998-2002) and from 1984 to 1988 he served as president and owner of Franchini Consolidated Agency, Polson Mercer Insurance & Real Estate, Williams Consolidated, Chama Insurance Services, Consolidated Mortgage, Franchini Travel.  During the course of his 37-year tenure in the industry, Franchini has held numerous industry leadership positions – experience he believes will be instrumental in carrying out the duties of his new position.  The new superintendent received words of encouragement from members of the Commission shortly after the appointment was announced.  “I think John will be a good man and he will hit the ground running,” Commissioner Sandy Jones said. “I wish him the best.”  Commission Vice Chairman Jerome D. Block said he’s confident that New Mexicans’ well-being will be well protected as that is one of Franchini’s priorities.  Commission Chairman David W. King and Commissioner Theresa Becenti-Aguilar echoed the sentiments of their colleagues and wished Franchini well in his new position.  Franchini, who holds a BA in history from Creighton University in Omaha , will earn $100,000 annually and is expected to begin his tenure in mid-August. He was one of five finalists selected by a 15-member search committee that included a broad cross section of New Mexico professionals. The search process began in mid-May and culminated with this week’s appointment. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Wed, 28 Jul 2010 00:00:00 EST 7B51F35DB6514FF7807D6607B2130BE6 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=80FF3EA3494546A9877CC41175B51CB8 October Research Corp. announced the launch of an online video initiative designed to inform and educate visitors within its suite of industry websites. Each of the company’s media products, The Title Report , The Legal Description , Valuation Review and RESPA News , will soon feature video interviews with industry experts, innovators, and thought leaders in the settlement services industry.    “We are pleased to expand into video in order to enhance the market presence of our media products and better meet the information needs of our readers, subscribers and advertisers,” said company COO Chris Casa . “Online video offers immediate access to cutting edge information and opinions, with a deeper level of engagement. We believe our video initiative will deliver an enriched relationship with our audience.”   The Title Report , the leading publication for the title insurance industry, will be the first to offer an industry video-cast, which will feature October Research Corp. Editor Kelly McCarel interviewing well-known RESPA legal authority Phil Schulman of K&L Gates. The video will launch Aug. 2, and will be sponsored by LPS SoftPro.   “LPS SoftPro is excited to be the founding sponsor of this video series and proudly supports October Research’s efforts to provide informative and educational content to the industry,” said Tim Conley , LPS SoftPro’s vice president of sales and marketing. “We anticipate this new delivery medium to be very well received.”   October Research Corporation, www.octoberresearch.com , is the nation’s leading provider of market intelligence, news and regulatory information in the title insurance, property appraisal, mortgage and real estate industries.   For more information, contact Chris Casa, COO, at 330-659-6101, ext. 6715. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 26 Jul 2010 00:00:00 EST 80FF3EA3494546A9877CC41175B51CB8 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=BAD74C2583E44EA9BFE43B609E517FA3 At the 12th Annual Installation and Awards Dinner held at the Riviera Country Club, renowned local attorney Arthur Mazirow was awarded 2010’s prestigious Outstanding Real Estate Lawyer Award by the Los Angeles County Bar Association, Real Property Section.   The criteria for the award includes: achieving personal and legal excellence; practicing ethically, honestly and with integrity; teaching others actively and through example; giving of time, talents and means; exercising leadership.   “It has been an honor to be chosen by my peers for this important award,” stated Mazirow.   Mazirow has given hundreds of lectures to lawyers, real estate professionals, Bar Associations, and the State Bar of California.  He has published more than 100 articles dealing with the legal aspects of real estate transactions.   Mazirow was a principal author of the lease and purchase forms published by the American Industrial Real Estate Association (1972-1990, www.airea.com ) and is a member of the Counselors of Real Estate and chaired its Dispute Resolution Program in 2008.    Tim Hayes , Executive Director of AIR Commercial Real Estate Association noted, “The AIR forms continue to be the most used and respected commercial real estate forms in the industry.   The AIR   owes a deep debt of gratitude to all of those who have contributed to the creation and development of the forms…Certainly, [Mazirow’s] name is at the top of the list of those who have selflessly given their time and effort to the AIR, and have, in the process, improved the commercial real estate industry as a whole.”   Mazirow was awarded the Spirit of CEB Award by the Continuing Education of the Bar and University of California and was one of CEB's consultants on its recently published book, Ground Lease Practice .  He has been designated a Trial Referee under the Reference Procedure of the California Code of Civil Procedure.   This year’s Award Program included special congratulations from such notable lawyers as Allen Matkins Leek Gamble Mallory & Natsis, LLP; Cox Castle Nicholson; former Assemblyman Walter Karabian , Esq; Wolf Group L.A.; and Crawford & Bangs, LLP. With a BS from UCLA School of Business and his JD from UCLA School of Law, Mazirow now serves as a real estate arbitrator, mediator, and expert witness. This year, his lectures focus on the important differences between a long term ground lease and a space lease; how to increase the probability of getting a favorable arbitration award; and the California rules for interpreting and construing written contracts. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Mon, 26 Jul 2010 00:00:00 EST BAD74C2583E44EA9BFE43B609E517FA3 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=106EFA9A988E4FDE90CD85B9A5E2AB49 To protect consumers who use grant deed copy services, the California legislature has introduced legislation to require those who provide grant deed copy services to make specified disclosures to consumers. The bill, AB 1373 , was introduced by Assembly member Ted W. Lieu , D-El Segundo.      Existing law provides that certain advertising-related practices are unlawful and makes a violation of those provisions a crime. This bill would make it unlawful for any person, firm, corporation, association or any other business entity to make any untrue or misleading statements in any manner in connection with the offering or performance of a grant deed copy service. Misleading statements outlined in the bill include any representation that the following is true: That due to property foreclosures and loan modifications in the county where the property is located, the property owner should obtain a copy of his or her grant deed or other record of title; That the offeror of the grant deed copy service is, or is affiliated with, any governmental entity; The use of an envelope that simulates an envelope containing a government check, tax bill or government notice or an envelope that otherwise has the capacity to be confused with, or mistaken for, an envelope sent by a governmental entity.   The proposed legislation also seeks to make it unlawful to offer to perform the service without making specified disclosures. The disclosure must state “this service to obtain a copy of your grant deed or other record of title is not associated with any governmental agency. You can obtain a copy of your grant deed or other record of title from the county recorder in the county where your property is located for [amount of fee for the copy of a grant deed or other record of title in that county].”   “Grant deed copy service” is defined as “a service, offered through a mailed solicitation to a property owner, to obtain, for compensation, a copy of the property owner’s grant deed or other record of title.” The original definition was “any service performed or offered to be performed for compensation in connection with obtaining a copy from the county recorder of a property owner’s grant deed or other record of title and includes a public records copy service.” The original definition would have potentially prohibited title companies from providing grant deeds and other documents to consumers, lenders and Realtors. The California Land Title Association, the California Escrow Association and California Bankers Association worked with Lieu to draft amendments to allow existing business practices to continue. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 22 Jul 2010 00:00:00 EST 106EFA9A988E4FDE90CD85B9A5E2AB49 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=4A7367A705EC478EAFAE507D856B42D1 U.S. Attorney John E. Murphy ; Ralph G. Diaz , Special Agent in Charge of the Federal Bureau of Investigation, San Antonio Division; and William “Bill” Cotter , Acting Special Agent in Charge of the Internal Revenue Service-Criminal Investigation in San Antonio, announced that 29 people have been indicted in the Western District of Texas under "Operation Stolen Dreams"—a nationwide crackdown on mortgage fraud. In the first indictment, a nine-count indictment returned by a San Antonio federal grand jury, 43-year-old Robert Brooks and his wife, Cheryl , 41, of Lantana, Texas, along with 20 other individuals are charged with conspiring to commit wire and mail fraud in a series of “property flip” schemes. The indictment alleges that from May 17, 2005, until Feb. 21, 2008, the defendants, under the direction of Brooks, participated in a mortgage fraud scheme whereby he purchased properties at fair market value then resold at an artificially inflated price to straw purchasers. According to the indictment, Brooks recruited his co-defendants—appraisers, loan processors, title company employees, straw purchasers, etc.—and provided them with kickbacks from loan proceeds for their participation in the scheme. Brooks also used the proceeds from the purported sales to various nominees to pay for his initial purchase of real estate, to pay closing costs for both his purchase and sale to the nominee, to pay the nominee’s down-payment, to pay the nominee for the nominee’s participation, and to pay the mortgage for the first 12 months, after which each mortgage went into default. The indictment charges that Brooks’ mortgage loan scheme involved 40 properties primarily located in the Dallas area and defrauded financial institutions in Dallas , San Antonio and Houston of approximately $20 million. The indictment also seeks the criminal forfeiture of approximately $127,000 in U.S. Currency as well as a 2007 21' Liberator boat and trailer belonging to the Brooks purchased with proceeds from the illegal scheme. The indictment also seeks a monetary judgment against all of the defendants in the amount of $1 million. Court summonses have been issued for these defendants. Conviction on this conspiracy charge is punishable by up to 30 years in federal prison In the second indictment, a three-count indictment also returned by a San Antonio federal grand jury, 54-year-old Bruce Irving Redfield of San Antonio, is charged with two counts of mail fraud and one count of wire fraud based on an estimated $365,000 mortgage loan fraud scheme. The indictment alleges that in the spring of 2006, Redfield provided fraudulent documentation while soliciting a Houston mortgage broker for a $365,000 loan to purchase a San Antonio residence. The indictment further states that Redfield solicited the loan knowing that the actual purchase price for the residence was approximately $45,000 less than the loan amount. The indictment further alleges that Redfield received a kickback of $44,635.62 from the homebuilder after closing on the property. The residence was later foreclosed. Upon conviction, Redfield faces up to twenty years in federal prison per charge. Finally, three San Antonio residents have pleaded guilty and three other San Antonio residents are awaiting a July 19th jury selection date in connection with an indictment returned last December. Former mortgage broker Justin Zhu ; Darnell Mason , owner of PLV Realty and Property Management LLC; and Diego Rodriguez face wire fraud charges based on an alleged mortgage fraud scheme. According to the indictment, Mason, through Zhu, recruited the other defendants including Rodriguez, Juan Solis , Jimmy Elizondo , and Eli Mendiola as straw purchasers for real estate properties he wanted to buy. Zhu paid the straw purchasers a kickback—usually between $1,500 and $3,000—for their individual roles in the fraudulent scheme. Authorities estimate that this mortgage loan scheme defrauded financial institutions in San Antonio of approximately $1 million. Upon conviction, Zhu, Mason, and Rodriguez each face up to 20 years in federal prison per charge. Solis, Elizondo, and Mendiola each face up to 20 years in federal prison after pleading guilty earlier this year to one count of conspiracy to commit wire fraud. No sentencing dates have been scheduled. These cases are being investigated by agents from the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation. They are being prosecuted by Assistant U.S. Attorneys William R. Harris , James Blankinship and Tom McHugh . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 20 Jul 2010 00:00:00 EST 4A7367A705EC478EAFAE507D856B42D1 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=E670A98F12954D0BAA39CC5CDDF117DC During the last call of the National Association of Insurance Commissioners Title Statistical Plan Working Group looked at several practical issues that still needed to be addressed before submitting the proposal to the full task force in August.   One of those issues was how underwriter direct shops and independent agents report their data and how to break down the underwriter’s report.   “On the branding side of things, there are a lot of joint facilities. How you aggregate whether it is for a brand or not, you have to do it in a family company kind of way,” said Justin Ailes , government affairs director for the American Land Title Association. “At the same time, I think we are talking about the fact that you have 50 state operations, how do you allocate expenses that cannot be particularly assigned to one state or another? How do you take into account those expenses or investment income? How do you allocate investment income on a state by state basis?”   Andy Helm , title insurance analyst, compliance and investigations, Colorado Division of Insurance, said that every brand of each underwriter would submit a report for their own state.   “When I read the comment, at first I was thinking about here in the Denver market,” he said. “For example, we have the Fidelity National Title Insurance Co. Brand and the Chicago Title Insurance Co. brand and I would expect a Fidelity report from their direct operations and a Chicago report from their direct operations.”   While that overarching decision was made, the group spent a good portion of the rest of the meeting discussing how that should be addressed in the directions to the form. The underwriters specifically had questions about how their direct shops would report losses remitted to the underwriter because the direct operation is part of the underwriter.   Mike Draminski of the Michigan Office of Finance and Insurance Regulation said that it is still important to gather loss information from the direct shops.   “We think it is still important to collect. The reimbursements paid to the underwriter may not be applicable, but the total losses that emanate from the direct operations, I think it is important to collect that,” he said.   “Agents would have their own losses that don’t go to the underwriter [but that is not the case for the direct operations],” said Don Partington , EVP , Legal and Strategic Affairs at Fidelity National Title Group. “Now there may be losses that occur that are not placed into any kind of loss reserve account. It would be those types of losses that would be included, so there might be a way to distinguish between the two.”   The group also discussed when the report should be due. Members of the industry that participated on the call expressed concern that submitting the report near the end of the first quarter after the reporting year was over could cause problems. However, those concerns had to be balanced with the need of the regulators to be able to act on the data they receive before the information becomes too old.   “I have worked quite a bit with some of the agencies at the regional level as they were preparing various data call responses,” said Caroline Scott , an attorney with Casey Gentz and Magness LLP, speaking on behalf of Fidelity. “I think there is some misapprehension that an affiliated agency would itself be completing the entire report. Within the large enterprises, you have very detailed hands-on involvement at the regional level from the financial staff and the ultimate parent level with the financial accounting staff. It is the same people, Whether you want a financial report or a data call or regular statistical report, it winds up with a great deal of the burden falling on the exact same group of people at the underwriter level. I am talking about the affiliated agencies and direct operations, but remember, we are talking about 40 percent of total agencies.”   “I am not opposed to moving [the deadline] beyond March 31, but I think July 31 is a little late in the year to do an effective market analysis from the previous year,” Helm said, acknowledging that there are several reports that at least underwriters are required to prepare during the first part of the year.   The group eventually compromised and determined the deadline would be May 15  The group has two meetings scheduled in July. One on July 15 and the other on July 29. During the July 15 meeting, the group will be discussing the definitions that will be used in the call and apportionment. Thu, 15 Jul 2010 00:00:00 EST E670A98F12954D0BAA39CC5CDDF117DC http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=78BF810AC6C3479893E0BA23FD272EC3 Joining a number of states that have passed similar legislation this year, Louisiana has adopted legislation that bans the use of private transfer fees.   The bill, HB 1133 , which was sponsored by Rep. Jeffery Arnold , D-New Orleans, was signed into law by Gov. Bob Jindal on July 2.   The bill states that the legislature “finds and declares that the public policy of the state favors the marketability of immovables and the transferability of interests in immovables free of title defects or unreasonable restraints on alienation. The legislature further finds and declares that private transfer fee obligations violate this public policy by impairing the marketability and transferability of immovables and by constituting an unreasonable restraint on alienation regardless of the duration of the obligation to pay a private transfer fee, the amount of a private transfer fee or the method by which any private transfer fee is created or imposed. Thus, the legislature finds and declares that a private transfer fee obligation shall not create real rights and shall not be binding on subsequent owners or immovables or other third parties, whether or not evidenced by a recorded instrument.”   The bill defines a private transfer fee obligation as “any obligation arising under any recorded or unrecorded declaration or agreement to pay a private transfer fee to a party to the declaration or agreement, or his successor or assigns or a third person upon a subsequent transfer of an interest in the immovable.”  Private transfer fees are defined as “fees or charges required by a private transfer fee obligation and payable upon the transfer of an interest in an immovable, regardless of whether the fee or charge is a fixed amount or is determined as a percentage of the value of the immovable, the purchase price or other consideration given for the transfer.” Exclusions to that definition include real estate broker fees and fees authorized by the Louisiana Condominium Act and Louisiana Homeowners Association Act.   The bill became effective upon the governor’s signature. Now, any person who imposes a private transfer fee obligation shall be liable for any and all damages resulting from the imposition of the transfer fee obligation, including the amount of any transfer fee paid by a party to the transfer. In addition, they would be liable for all attorneys fees, expenses and costs incurred in the litigation.   A seller of an immovable must furnish to any purchaser a written statement disclosing the existence of any private transfer fee obligation. This written statement must include a description of the private transfer fee obligation and include a statement that private transfer fee obligations are subject to certain prohibitions under Louisiana law. For private transfer fee obligations imposed prior to the bill’s passage, the person entitled to receive the fee must record, prior to Dec. 31, 2010, a separate notice of the private transfer fee obligation in the conveyance records of the parish in which the immovable is located. If this provision is not complied with, the obligation will cease.   If the payee fails to provide a written statement of the transfer fee payable within 30 days of the date of a written request, then the seller may convey any interest in the immovable to any buyer without payment of the transfer fee. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 13 Jul 2010 00:00:00 EST 78BF810AC6C3479893E0BA23FD272EC3 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=67058496DC2549A489F21682EBE03A59 More than 300 real estate settlement services professionals traveled to Cleveland June 14-16 to attend the 6th annual National Settlement Services Summit and 4th annual National Compliance Summit. The events — held at the Key Center Marriott Hotel — featured 15 powerful educational sessions, more than 40 speakers and over 30 sponsors.  “We are extremely pleased with the attendance at this year’s conference, as well as the unique balance of underwriters and title agents,” said Barb Casa , publisher and CEO of October Research Corp., producer of the conferences. “We played host to title agents, company presidents, appraisers, technology providers and attorneys from 38 states.” October Research is publisher of The Title Report, The Legal Description, RESPA News and Valuation Review .   During this year’s event, the company announced the establishment of the Joe Casa Awards for Leadership, Innovation and Philanthropy, named after its late founder. The first awards will be presented at next year’s conference.  Highlights of the conference included keynote addresses by Joe Murin , chairman of Washington, D.C.-based The Collingwood Group LLC and former head of Ginnie Mae, and Phil Schulman , nationally recognized RESPA attorney and a partner at Washington, D.C.-based K&L Gates. Murin spoke about liquidity in the market, prospects for economic recovery and the role of settlement services providers in the changing landscape.  “This time around, things will be very different,” he said. “That means each and every one of us who wants to truly be in the business of supporting the mortgage industry is going to have to be serious about the way in which we conduct business. We need to understand that transparency will hold us all accountable for the integrity of our work, the quality of our products and the efficiencies of our process. Without that commitment and dedication, I might suggest to you another line of work,” he said. On the second day of the conference — The National Compliance Summit — Schulman spoke about the shifting focus in Washington from laissez-faire governing of the real estate and settlement services industry to one of risk management. He gave several examples, pointing out how current efforts in Washington , such as RESPA reform, proposed TILA reform and the Consumer Financial Protection Agency will affect the settlement services industry.  For more coverage of the conference sessions, visit www.thetitlereport.com , www.thelegaldescription.com , www.respanews.com or www.valuationreview.com . October Research Corporation is the nation’s leading provider of market information, business news and regulatory information for professionals in the real estate settlement services industry. For more information, contact Chris Casa , COO, at (330) 659-6101, ext. 6715, or chriscasa@octoberresearch.com . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 13 Jul 2010 00:00:00 EST 67058496DC2549A489F21682EBE03A59 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=48919F6BA5B141B6803DE566AA20606D David Martyn , vice president, associate senior underwriter and manager of the Stewart National Title Services office in Detroit , Mich. has been sworn in to practice before the U.S. Supreme Court. The swearing-in ceremony, which took place on June 21, 2010, was held at the U.S. Supreme Court building in Washington , D.C. and was attended by all nine Justices. Following the ceremony, Chief Justice John Roberts attended the reception held for the newly admitted bar members. "I consider it a great honor and privilege to be included among this esteemed group of fellow attorneys and appreciate the support and emphasis Stewart places on continuing professional development," Martyn said. In addition to being admitted to the U.S. Supreme Court Bar, Martyn was previously admitted to practice before the 11th U.S. Circuit Court of Appeals and U.S. District Courts for the Middle and Northern Districts of Georgia . Paul Sands , executive vice president and director for Stewart National Title Services remarked, "We at Stewart are very proud of Martyn and this important accomplishment. He does an outstanding job as an associate senior underwriter, focusing on national commercial transactions, and in his other areas of responsibility. His achievement underscores the high level of expertise represented by our legal personnel throughout Stewart." Martyn is a member of the State Bar of Michigan and the State Bar of Georgia. He received his Bachelor of Arts degree from Cleveland State University and his Juris Doctorate from Emory University . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 08 Jul 2010 00:00:00 EST 48919F6BA5B141B6803DE566AA20606D http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=CAD87E0FF74A496CAAC31A683AEFDB1B The Louisiana legislature passed a bill that requires that a title opinion contain a search of the public record for a specified period of time for federal judgments or if the transaction being insured is a sale or a mortgage.   Current law requires title insurance reports and policies be based on a title examination by attorneys licensed and authorized to practice law in Louisiana . The title opinion that results must contain a complete list of all encumbrances, mortgages, judgments liens and privileges.   Under the bill, HB 807 , which was sponsored by Rep. Timothy Burns , R-Manderville, for federal judgments, a search of the mortgage records shall be made for a period of 20 years. However, the time period requirement shall not apply to any transaction made prior to and on Jan. 1, 2013, by the Road Home Corp. The Louisiana Land Trust or any political subdivision of property originally acquired in connection with the Road Home Program   The bill also states that if the transaction being insured is a sale, the minimum search period shall be 30 years or longer if necessary, in order to reach an arms-length sale between unrelated third parties. If only a mortgage is being insured, then the search shall be for a minimum of 10 years or two links in the chain of title, whichever is greater. However, the minimum search period for a sale or mortgage shall not apply to any transaction made prior to an on Jan. 1, 2013, by the Road Home Corp. The Louisiana Land Trust, The Louisiana Land Trust or any political subdivision of property originally acquired in connection with the Road Home Program. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 08 Jul 2010 00:00:00 EST CAD87E0FF74A496CAAC31A683AEFDB1B http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=EB0FB05F3E2645BCBFFC0724131E20B1 Over a year after a Chicago-based independent escrow company unexpectedly closed its doors, leaving homeowners across the country without means to make their tax payments, the effects are still being felt and one state is still taking action against the company.  Ohio Attorney General Richard Cordray is seeking restitution and civil penalties against American Escrow in Franklin County Common Pleas Court . Cordray said that the company and its owners, Derek Lurie and Steven Lurie , claimed that they would provide escrow services for their customers to pay property taxes or homeowner insurance but collected the money from consumers and never made the payments on their behalf. “Ohioans who contracted with this company lost thousands of dollars that they had set aside to pay taxes and insurance premiums,” said Cordray. “In the end, not only were their taxes and premiums not paid, but they had to come up with additional money out-of-pocket.” According to the lawsuit, American Escrow entered into contracts with consumers to provide escrow services and to pay for property taxes and/or homeowner’s insurance each year. They divided the approximate annual amount by 12 payments, which they then collected each month from consumers. Consumers were charged a one-time set up fee of up to $250 and a monthly service charge up to $6.50. The lawsuit alleges that the company stopped making payments for some customers in the fall of 2008 but continued to collect money through March 2009.  The Attorney General’s office has received 89 complaints to date against American Escrow from Ohioans who said they lost money. Cordray charged American Escrow and its principals with multiple violations of Ohio ’s Consumer Sales Practices Act, including failure to deliver and unfair and deceptive consumer sales practices. He is also seeking permanent injunctive relief, restitution and civil penalties.  Shortly after American Escrow’s unexpected closure last year, other states have also taken action against the company, seeking restitution for impacted consumers in their state. The first to take action was Illinois Attorney General Lisa Madigan , who sued American escrow last spring to permanently ban American Escrow and Derek and Steven Lurie from operating an escrow company in the state and order the company to reimburse the state’s consumer protection fund for money distributed to the homeowners in the state.   The Indiana legislature took steps to protect consumers in their state from similar situations by passing House Enrolled Act 1332 , which states that only a financial institution or title insurance company can maintain a borrower’s escrow account and prohibits other entities from doing so. Indiana Attorney General Greg Zoeller filed suit against American Escrow in June 2009 and received a judgment of almost $600,000 in January 2001. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 06 Jul 2010 00:00:00 EST EB0FB05F3E2645BCBFFC0724131E20B1 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=3339F2F91A394A658A80C4A63E00011C Wifredo A. Ferrer , U.S. attorney for the Southern District of Florida, Amos Rojas , special agent in charge, Florida Department of Law Enforcement, and other state and federal law enforcement officials announced that an indictment was unsealed against: Joseph Guaracino , 32, of Plantation, Fla. Steven Stoll, 43, of Fort Lauderdale, Fla. Stephen Orchard , 34, of Boca Raton, Fla. Matthew Gulla , 35, of Davie, Fla. Rene Rodriguez, Jr., 37, of Plantation Dennis Guaracino, Jr. , 34, of Plantation Jacqueline Trumbore , 39, of Margate, Fla. John Velez, 37 , of Plantation Daryl Radziwon , 39, of Plantation Casey Mittauer , 37, of Cooper City, Fla. Joseph DeRosa , 35, of Coral Springs, Fla. Robert DePriest , 41, of Plantation Joseph LaGrasta , 31, of Tamarac, Fla. The indictment charges the defendants with one count of conspiracy, eleven counts of mail fraud, thirteen counts of wire fraud, and eight counts of making a false statement to a government agency. Two defendants are charged with obstructing justice. Not all defendants are charged in all counts. The conspiracy, mail fraud, wire fraud and obstruction of justice counts, each carry a maximum penalty of up to 20 years’ imprisonment. The false statement counts each carry a maximum penalty of five years’ imprisonment. According to the indictment, the defendants engaged in a scheme to enrich themselves by fraudulently causing real property in Broward and Palm Beach counties to be bought and sold by submitting, and causing to be submitted, false and fraudulent documents to mortgage lenders in order to obtain the loans. The title attorneys falsely represented to the mortgage lenders the source of the deposits/down payments and/or the cash from borrowers needed to close the transactions. The total dollar amount of the loans secured under the scheme was in excess of $16,000,000 dollars. More specifically, at times relevant to the indictment, Joseph Guaracino would locate properties to be purchased and negotiated sale contracts along with co-defendants. In order to qualify for mortgage loans, Guaracino and others, caused false information to be submitted to lenders, including forged lease agreements, false bank account balances, and inflated income or salary levels. Dennis Guaracino, Trumbore, Velez, Radziwon, Mittauer, DeRosa, DePriest and Lagrasta were investors in the fraudulent real estate investment scheme, who along with others, purchased the properties that Guaracino controlled. Stoll, a licensed mortgage broker and a licensed attorney, and Orchard, also a licensed attorney, participated in the scheme by handling the closings of the fraudulently procured loans, along with licensed mortgage brokers Gulla and Rodriguez. Ferrer commended the investigators for their hard work and dedication in this long term investigation by the Florida Department of Law Enforcement, Federal Bureau of Investigation, U.S. Postal Inspection Service, and State of Florida ’s Office of Financial Regulation. This case is being prosecuted by Assistant U.S. Attorneys Laurie E. Rucoba , Jeffrey Kay and Michael Patrick Sullivan . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 01 Jul 2010 00:00:00 EST 3339F2F91A394A658A80C4A63E00011C http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=EC3BE211B55D42D7AB4AE0B4D4E07F70 North Carolina Governor   Beverly Perdue signed a bill to ban private transfer fees, making North Carolina the latest state to do so.   The bill, SB 35 , was sponsored by Sen. David Hoyle , D-Gastonia.   The bill states that “the public policy of the state favors the marketability of real property and the transferability of interests in real property free from title defects, unreasonable restraints on alienation and covenants or servitudes that do not touch and concern the property.” “A transfer fee covenant violates this public policy by impairing the marketability of title to the affected real property and constitutes an unreasonable restraint on alienation and transferability of property, regardless of the duration of the covenant or the amount of the transfer fee set forth in the covenant,” the bill states.   The bill defines transfer fees as “a fee or charge payable upon the transfer of an interest in real property or payable for the right to make or accept such transfer, regardless of whether the fee or charge is a fixed amount or is determined as a percentage of the value of the property, the purchase price or other consideration given for the transfer.   The state will not consider the following a transfer fee: Any fee charged that is typical real estate closing cost, including closing or escrow fees, settlement fees, attorney fees or title insurance premiums and fees; Any reasonable fee payable by the original transferee to a unit owners’ association, as long as no portion of the fee is required to be passed through to a third party designated or identifiable by description in the document or another document referenced therein; or A fee payable as part of a conservation or preservation agreement.   The bill defines a transfer fee covenant as “a declaration or covenant purporting to affect real property that requires or purports to require the payment of a transfer fee to the declarant or other person specified in the declaration or covenant or to their successors or assigns, upon a subsequent transfer of an interest in the real property.   Under the new legislation, “any transfer fee covenant or any lien that is filed to enforce a transfer fee covenant or purports to secure payment of a transfer fee, shall not run with the title to real property and is not binding on or enforceable at law or in equity against any subsequent owner purchaser or mortgagee of any interest in real property as an equitable servitude or otherwise.      A person who records a transfer fee covenant, files a lien that purports to secure payment of a transfer fee or enters into an agreement imposing a private transfer fee obligation shall be liable for: Any and all damages resulting from the imposition of the transfer fee obligation on the transfer of an interest in the real property, including the amount of any transfer fee paid by a party to the transfer; All attorney fees, expenses and costs incurred by a party to the transfer or mortgagee of the real property to recover the transfer fee paid or in connection with an action to quiet title or register the title or a proceeding subsequent to initial registration. If an agent acts on behalf of a principal to file or secure a private transfer fee obligation, liability shall be assessed to the principal, but not to the agent. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 29 Jun 2010 00:00:00 EST EC3BE211B55D42D7AB4AE0B4D4E07F70 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=333E481EB96E41AD98CC097EC2F33750 The Ohio General Assembly has passed legislation that, among other things, bans transfer fee covenants on a go-forward basis. It joins several states that have passed similar measures in the last few   years, such as Utah and Florida .   The bill, HB 292 , was sponsored by Reps. Tom Letson , D-Warren, and W. Scott Oelslager , R-North Canton.   The new law defines a transfer fee covenant as “a declaration or covenant recorded against the title to real property that requires or purports to require the payment of a transfer fee to the declarant or other person specified in the declaration or covenant or to their successors or assigns upon a subsequent transfer of an interest in the real property.”   The bill defines transfer fees as “a fee or charge required by a transfer fee covenant and made payable upon the transfer of an interest in real property, or payable for the right to make or accept such a transfer, regardless of whether the fee or charge is a fixed amount or is determined as a percentage of the value of the property, the purchase price or other consideration given for the transfer. The following, among other things, would not be considered transfer fees under HB 292: Any consideration payable by the grantee to the grantor for the interest in real property being transferred; Any fee, charge, assessment, fine or other amount payable to a homeowners, condominium, cooperative, mobile home or property owners association pursuant to a declaration or covenant or law applicable to the association; Any rent, reimbursement, charge, fee or other amount payable by a lessee to a lessor under a lease; and Any payment required pursuant to an environmental covenant, which the bill defines as “a servitude that imposes activity and use limitations on real property.”   It states that a transfer fee covenant recorded in Ohio after the effective date of the bill will not be binding on or enforceable against any subsequent owner, purchaser or mortgagee of any interest in real property as an equitable servitude or otherwise. Any lien purporting to secure the payment of a transfer fee under a transfer fee covenant that is recorded after the effective date of the bill will be void. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 24 Jun 2010 00:00:00 EST 333E481EB96E41AD98CC097EC2F33750 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=E379E64AC67E430E9F01BEF12843F70F After selling her house in 2006, a New Jersey woman sued the title underwriter, closing company and several individuals associated with the transaction, alleging that she was fraudulently induced to sign the closing documents. After moving from federal to state court, the Appellate Division of the New Jersey Superior Court handed down its ruling.   The case is Elizabeth Liggon-Redding v. Fidelity National Title Insurance Co., Congress Title, Key Properties/GMAC Realty, Mr. and Mrs. Quinn, Anthony Balboni, Linda Huller, Tahir Zaman, Christine Lapointe and Charles Wexton (Superior Court of New Jersey , Appellate Division, No. A-1831-08T3) .  The complaint arises out of the sale of plaintiff Elizabeth Liggon-Redding’s former resident in Willingboro Twp., N.J., which she owned jointly with her husband, to Tahir Zaman. The closing took place on June 30, 2006. Fidelity National Title Insurance Co. and Congress Title served as the title insurers for the transaction. Key Properties was the real estate closing agent. Anthony Balboni and Linda Huller were employed by or affiliated with Key Properties. Christine Lapointe was employed by or affiliated with Congress Title and Charles Wexton acted as its attorney.   In connection with the sale, the signatures of Liggon-Redding and her husband appear on an affidavit of title and on a deed conveying the property to Zaman. Liggon-Redding contended that she was fraudulently induced to execute those documents and that she was not present at the closing.   In July 2006, she filed a pro se action in the U.S. District Court for the District of New Jersey against Congress Title, Fidelity and Key Properties, alleging that she had been defrauded in connection with the sale. The district court dismissed the complaint without prejudice for lack of federal subject matter jurisdiction. After her motion for reconsideration was denied, Liggon-Redding appealed the case to the 3rd U.S. Circuit, which dismissed the appeal for lack of appellate jurisdiction.   Liggon-Redding then filed two more lawsuits in the district court, one against Balboni, Huller, Zaman, Lapointe, Wexton, Oren Klein, Congress Title, Fidelity and Key Properties, alleging that they violated the federal Racketeer Influenced and Corrupt Organizations Act (RICO). She filed a separate RICO action against various Willingboro police officers who allegedly had intimidated her and used excessive force against her. The district court dismissed both of Liggon-Redding’s RICO actions because of her failure to comply with numerous Rules of Civil Procedure and court orders in prosecuting those complaints. Referencing Liggon-Redding’s claims against Congress Title and other private parties involved in the sale, the district judge noted that she had not “coherently set forth the fraud, enterprise or predicate acts” that would make them liable, and alleged “no facts linking [such defendants] to plaintiff’s harm.” On appeal, the 3rd U.S. Circuit Court of Appeals affirmed the dismissal of all of Liggon-Redding’s claims, except those alleging excessive force by the police officers. During the time between the district court’s order and the court of appeals decision, Liggon-Redding filed the current action in the Chancery Division. The complaint names defendants who had all been included in one or more of her federal actions and repeats her general theme that she had been tricked into signing documents in connection with the sale of her residence.   The defendants moved to dismiss the Chancery action on various grounds, arguing that the principles of res judicata and collateral estoppel bar Liggon-Redding from relitigating issues that were, or could have been, raised in her prior federal lawsuits. The chancery court dismissed the complaint with prejudice on the grounds of res judicata and collateral estoppel. On appeal from the state court, Liggon-Redding argued that the chancery court erred in its application of principles of res judicata and collateral estoppel.   The state appellate court affirmed the judgment of the chancery court. “Even though the plaintiff’s first federal complaint was dismissed without prejudice and explicitly invited her to file her claims of fraud in the state court, Liggon-Redding disregarded that suggestion. Instead, she persisted in bringing additional complaints in the federal court. By operation of law, the dismissal of (the second complaint) operates as an adjudication on the merits, and precludes another complaint against the defendants, whether in federal or state court, arising out of the same subject matter. We have no authority to overturn those determinations by the federal court,” the appellate court stated. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 15 Jun 2010 00:00:00 EST E379E64AC67E430E9F01BEF12843F70F http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=A881C9ED3EB94090BC0DE775EA6B3916 With the Senate and House financial reform legislations moving to a conference committee, officers of the National Association of Insurance Commissioners (NAIC) provided state regulators' perspective on the issue. In a letter to congressional leaders, state regulators expressed support for several provisions that preserve critical consumer safeguards and maintain efficiency in the national system of state-based insurance regulation. The letter focused on one provision, found in both the Senate and House versions, the creation of a Federal Insurance Office. The NAIC supports the House Federal Insurance Office (FIO) language, which provides the office with narrow authority to implement mutual recognition or equivalence agreements. "The FIO approach ensures the federal government has information and expertise on the insurance sector, provides that international agreements are subject to appropriate review and input, and protects against unnecessary preemption of state law," said Jane L. Cline , NAIC president and West Virginia insurance commissioner. The NAIC supports the House proposal allowing for non-voting membership for state banking, insurance and securities regulators on the Financial Stability Oversight Council (FSOC). "The FSOC is a regulatory body, and demands the commitment, expertise, and regulatory data that only an active state insurance commissioner can bring," said Cline. "The inclusion of a state insurance regulator will aid considerably as an early warning system in identifying practices and risk-related trends that contribute to systemic risk." Regulators also urged congressional leaders to retain provisions excluding insurance companies from systemic resolution authority and expressed support for insurers to continue to utilize derivatives for hedging purposes consistent with state rules and laws. "We want to ensure the legislation ultimately enacted addresses issues, gaps or weaknesses exposed by actual events, and avoids unnecessary or counterproductive changes to healthy and functioning elements of the financial system," said Cline. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 10 Jun 2010 00:00:00 EST A881C9ED3EB94090BC0DE775EA6B3916 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=2B21253621E24C3FB64F702C099F56EC Erin Toll , who had been suspended from her role as the director of the Colorado Division of Real Estate, resigned her position and accepted a position in the private sector. Toll became well-known for her crackdown on captive title reinsurance scams as deputy commissioner of the Colorado Division of Insurance.  Her resignation became effective upon the close of business May 31, 2010. Barbara Kelley , executive director of the Colorado Department of Regulatory Agencies, accepted Toll’s resignation, expressing her appreciation for the years of service that Toll provided to the state as a passionate consumer advocate. In her letter of resignation, Toll expressed her gratitude to the exceptional staff at the Division of Real Estate, representatives of the Attorney General’s office that have provided counseling on legal matters and to industry representatives serving on boards and task forces.  Toll was not idle long, accepting a position as a broker associate at Perry & Co. Real Estate Professionals, which announced the new hire on June 4. “ Erin ’s reputation as a consumer watchdog perfectly fits our company mission of providing extraordinary customer service to our clients,” said R. Don Larrance , president of Perry & Co. Since 2006, Toll headed up the state’s real estate regulatory arm and in addition to overseeing investigations, licensing and discipline of all areas of real estate, she gained national and local recognition for her advocacy work and implementation of loan originator and conservation easement programs. Prior to her work at the Colorado Division of Real Estate, Toll worked as the deputy commissioner of the Colorado Division of Insurance where she was recognized nationally for her crackdown on title insurance scams involving captive title reinsurance. She testified before the U.S. Congress regarding real estate transactions. She also represented this division in all its legal matters as their assistant attorney general. Her background as a lawyer has served her as a lobbyist and strategist for small businesses. Her knowledge of real estate law and her experience working with a variety of businesses involved with real estate transactions makes the step into real estate sales a natural next move, Larrance said. “ I’ve loved the real estate business, working on the regulatory and advocacy side. It’s always been a dream of mine to put those skills to work, helping clients buy and sell properties ,” Toll said. Toll was suspended from the Colorado Division of Real Estate within days after telling the press that American Home Funding was under investigation by the division for allegations of false advertising. The statements were premature, in that the investigation into American Home did not begin until the day after Toll revealed the information to the press. According to The Denver Post , Toll’s attorney said that a subordinate erred by not opening the investigation when earlier instructed by Toll to do so. Within days of speaking to the press, Toll had been suspended from her position. An investigation was launched into Toll’s conduct to decide if her declaration of looking into American Home was retaliation against Sen. Ted Harvey , R-Douglas County , the owner of the company and opponent of Toll’s efforts to enact legislation (that failed) that would put her division in control of the regulation and registration of appraisal management companies. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 08 Jun 2010 00:00:00 EST 2B21253621E24C3FB64F702C099F56EC http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=00F56610E6E64D8092ED187541F0EF47 A district court judge in Washington denied a lender’s motion to voluntarily dismiss its suit against a national underwriter in order to file a separate complaint against the underwriter and anther third party.   The case is Columbia Community Credit Union v. Chicago Title Insurance Co. ( U.S. District Court for the Western District of Washington, No. C09-5290RJB).   Columbia Community Credit Union filed suit against Chicago Title Insurance Co. for breach of contract, declaratory relief, damages under the Insurance Fair Conduct Act, bad faith and violations of the Washington Consumer Protection Act, in connection with Chicago Title’s refusal to reimburse Columbia for money paid to construction lien claimants and the defense of lien litigation. On April 14, 2010, the court denied Columbia ’s motion to amend a minute order to allow the lender to amend its complaint to add CUMIS Insurance Society Inc. as a defendant; strike the pretrial conference and continue the trial date by 120 days. In that order, the court concluded that Columbia ’s motion to amend was untimely and would therefore prejudice Chicago Title. On April 20, Columbia filed its motion for voluntary dismissal, requesting that the court dismiss the case without prejudice. Columbia planned to file a renewed action against both Chicago Title and CUMIS. Chicago Title filed a response on May 11, contending that it has expended great time and effort to prepare for trial, that Columbia did not act diligently because it was a tactical decision not to name CUMIS as a defendant earlier in the case and that Columbia ’s motion is vexatious. Columbia filed a reply on May 14, arguing that Chicago Title had not established that it will suffer legal prejudice if Columbia is permitted to voluntarily dismiss the case without prejudice; that Columbia ’s motion is not vexatious nor has Columbia acted in bad faith; and the court should not impose the conditions advocated by Chicago Title. In denying Columbia ’s motion for voluntary dismissal, District Court Judge Robert Bryan noted that a plaintiff does not have the right to dismiss, without prejudice, an action where the defendant will suffer legal prejudice.  “On April 14, 2010, the court denied Columbia ’s motion to permit Columbia to amend the complaint to add CUMIS as a defendant,” Bryan said. “This motion to dismiss the case without prejudice is another belated attempt to join CUMIS as a defendant.”   He then went through several factors he considered in determining that Chicago Title would suffer legal prejudice.   First he noted that both parties have spent a great deal of time and resources in litigating the case. He also noted that the dispositive motions deadline has passed and that Chicago Title asserted that it may lose access to key witnesses if yet another delay is occasioned by the filing of a new complaint.   Bryon also noted that the trial is set for Nov. 15, 2010. “Dismissal of the case now, with Columbia filing a new case after the dismissal, would result in significant delay in resolving the issue,” he said. “Chicago Title deserves to have the issues resolved in a timely manner. Further, and significantly, Columbia made a tactical choice not to pursue CUMIS at the start of this matter. Columbia had all relevant information concerning its potential claim against CUMIS under its control, and made a calculated choice not to name CUMIS as a defendant in this case.”   Columbia contended that it could suffer prejudice if the motion to dismiss the case without prejudice is denied because of the risk of inconsistent verdicts resulting from Chicago Title’s assertion of a defense centered on Columbia ’s bond claim.   “It is unclear whether there is a risk of inconsistent verdicts,” Bryan said. “However, that is the risk that Columbia took when it filed this case against Chicago Title, and made the tactical choice not to include CUMIS as a defendant.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 03 Jun 2010 00:00:00 EST 00F56610E6E64D8092ED187541F0EF47 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=BA4619C2D1924598838B79B0AF381390 At the request of several Members of Congress, the Federal Trade Commission (FTC) is further delaying enforcement of the “Red Flags” Rule through Dec. 31, 2010, while Congress considers legislation that would affect the scope of entities covered by the rule. The May 28 announcement and the release of an enforcement policy statement do not affect other federal agencies’ enforcement of the original Nov. 1, 2008 deadline for institutions subject to their oversight to be in compliance. “Congress needs to fix the unintended consequences of the legislation establishing the Red Flags Rule – and to fix this problem quickly. We appreciate the efforts of Congressmen Barney Frank and John Adler for getting a clarifying measure passed in the House, and hope action in the Senate will be swift,” FTC Chairman Jon Leibowitz said. “As an agency we’re charged with enforcing the law, and endless extensions delay enforcement.” The rule was developed under the Fair and Accurate Credit Transactions Act, in which Congress directed the FTC and other agencies to develop regulations requiring “creditors” and “financial institutions” to address the risk of identity theft. The resulting Red Flags Rule requires all such entities that have “covered accounts” to develop and implement written identity theft prevention programs to help identify, detect, and respond to patterns, practices, or specific activities – known as “red flags” – that could indicate identity theft. The rule became effective on Jan. 1, 2008, with full compliance for all covered entities originally required by Nov.1, 2008. The commission has issued several Enforcement Policies delaying enforcement of the rule. Most recently, the commission announced in October 2009 that at the request of certain mmbers of Congress, it was delaying enforcement of the rule until June 1, 2010, to allow Congress time to finalize legislation that would limit the scope of business covered by the rule. Since then, the commission has received another request from Members of Congress for another delay in enforcement of the rule beyond June 1, 2010. The commission urges Congress to act quickly to pass legislation that will resolve any questions as to which entities are covered by the rule and obviate the need for further enforcement delays. If Congress passes legislation limiting the scope of the Red Flags Rule with an effective date earlier than Dec. 31, 2010, the commission will begin enforcement as of that effective date. In the interim, FTC staff has continued to provide guidance, both through materials posted on www.ftc.gov/redflagsrule , and in speeches and participation in seminars, conferences and other training events to numerous groups. The FTC also published a compliance guide for business, and created a template that enables low risk entities to create an identity theft program with an easy-to-use online form ( www.ftc.gov/bcp/edu/microsites/redflagsrule/get-started.shtm ). The FTC staff also has published numerous general and industry-specific articles, released a video explaining the rule, and continues to respond to inquiries from the public. To assist further with compliance, FTC staff has worked with a number of trade associations that have chosen to develop model policies or specialized guidance for their members. As was the case previously, this enforcement delay is limited to the Red Flags Rule and does not extend to the rule regarding address discrepancies applicable to users of consumer reports (16 C.F.R.§641), or to the rule regarding changes of address applicable to card issuers (16 C.F.R.§681.2). Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 01 Jun 2010 00:00:00 EST BA4619C2D1924598838B79B0AF381390 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=9E69ED3837E2413DA917C54A70885243 Neil T. Gooch , a 13-year veteran of the Utah Insurance Department took the oath of office as Utah insurance commissioner on May 25. Gov. Gary R. Herbert made the appointment earlier this year and the appointment was recently confirmed by the Utah Senate.   Gooch was appointed acting Insurance Commissioner in January, and previously served as Deputy Insurance Commissioner since 1997. He also worked as an assistant attorney general from Feb. 22, 1982 until August 1997. "Neal's experience and demonstrated working knowledge of the Utah Insurance Department makes him the logical choice for this position," Governor Herbert said. "I thank him for his willingness to step forward, and appreciate his continued service to the State of Utah ." Former Insurance Commissioner Kent Michie retired in January 2010. Gooch has a bachelor's degree in political science from Arizona State University , and a juris doctorate from the Potomac School of Law in Washington D.C. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 01 Jun 2010 00:00:00 EST 9E69ED3837E2413DA917C54A70885243 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=D940575BFDBB43DE9D1F08C1511D53CF New York State Bar Association President Michael E. Getnick of Getnick Livingston Atkinson & Priore, LLP of Utica, N.Y., and of counsel to Getnick & Getnick of New York City urged Governor David A. Paterson to sign into law legislation passed recently by both houses of the State Legislature that would authorize the state’s attorney general to prosecute instances of the unauthorized practice of law. The legislation, SB 5445 / AB 4300 sponsored by Sen. John Sampson and Assemblyman Ron Canestrari , would provide statutory authority for the New York State Attorney General to bring both civil and criminal actions against defendants for violations of the Judiciary Law based on the unlawful practice of law. The legislation also would enable coordinated, statewide prosecution of illegal real estate closing schemes and programs that defraud unknowing consumers and lenders in the state. “This legislation would enhance the attorney general’s ability to combat real estate corruption, larceny and other illegal actions perpetrated by phony lawyers and suspended or disbarred counsel,” Getnick said. “I urge the governor to sign this bill into law without delay to further the attorney general’s ability to protect the public from unlicensed legal practitioners.” The unauthorized practice of law legislation was initially proposed by the New York State Bar Association’s Committee on Unlawful Practice of Law and was passed by the Legislature with the strong advocacy of the Association’s Real Property Law Section. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 27 May 2010 00:00:00 EST D940575BFDBB43DE9D1F08C1511D53CF http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=4FB3A0A131A641A1B2033181E1D21315 The New Mexico Public Regulation Commission on May 20 appointed Craig Dunbar as interim Superintendent of Insurance.  Dunbar , 59, replaces Thomas R. Rushton , who tendered his resignation on May 13. Rushton, who had served as the deputy superintendent of insurance, was appointed interim superintendent after Morris Chavez resigned from the post on May 4. Prior to today’s appointment, Dunbar served as executive assistant to commission Chairman David W. King . In all, Dunbar boasts 35 years experience in the title insurance industry, much of it in management capacities.  Dunbar said he is looking forward to putting his business experience to use on behalf of New Mexico ’s citizens and corporate interests. “I look forward to serving in this capacity on an interim basis,” Dunbar said. “There are a lot of very talented and professional people who comprise the Insurance Division and I look forward to working with these individuals with an eye toward moving the division forward.” Commission Vice Chairman Jerome D. Block said he’s thrilled that Dunbar expressed an interest in the interim superintendent position and said he believes Dunbar has the skills needed to keep the division on track.  “In the short time Dunbar has worked for this agency, he’s done exemplary work,” Block said. “His previous experience in the industry will benefit him and the agency as we move toward finding a permanent superintendent. His willingness and commitment are admirable and we look forward to his service on an interim basis.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 25 May 2010 00:00:00 EST 4FB3A0A131A641A1B2033181E1D21315 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=23AC801466B4441389536B5F4533A426 The title insurance industry continues to keep a careful watch on the dramatic changes that are being considered on Capitol Hill, knowing that anything that affects the lending industry is likely to have a residual affect on title agents.   K&L Gates Attorney Phil Schulman will be joined by Gary Cunningham , principal of The Collingwood Group, Washington, D.C., and former HUD Deputy Assistant Secretary for Regulatory Affairs and Manufactured Housing at HUD; Steven M. Kaplan , partner with K&L Gates, and Don Partington , EVP, legal and strategic affairs at Fidelity National Financial to take your questions about new and proposed laws and regulations at the National Compliance Summit in Cleveland on June 15 and 16. The June 16 session, Open Forum on Regulatory Realities, will follow Schulman’s opening keynote address, which will focus on the changes to RESPA, the proposed changes to TILA, the HVCC and the FHA.  “Congress, the regulators and the American public are interested in risk management and putting in place laws and regulations to limit losses and to make sure that people are dotting I’s and crossing T’s, whether that is on Wall Street or in the banks or lender shops,” Schulman said.  Schulman said these are times when companies need to be paying attention to what the regulators are asking for and make sure they have a high level of quality control in place in their processes.  During the open forum discussion, Partington will be addressing the impact of the TILA rules and the proposed CFPA as well as the tremendous regulatory and legislative activity at the state level. “Agents need to pay attention to the new regulations being proposed concerning how rates are determined for title insurance,” Partington said. “The NAIC is looking to put the expenses for title agents into the computation and Washington State is leading the way in this effort.”  This year, the National Settlement Services Summit and the National Compliance Summit have been combined for a two-day extravaganza of information, education and networking at the Marriot at Key Center , Cleveland ’s state-of-the-art conference facility. The combined Summits are expected to attract nearly 400 industry professionals from across the country. More than 30 companies have signed on as sponsors for the 2010 National Settlement Services Summit and National Compliance Summit. Several sponsorships are still available. For more information contact Glen Stout at gstout@octoberresearch.com or (330) 659-6101, ext. 6556.  For more information about the Summits, visit:   www.octoberseminars.com/ns3 . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 25 May 2010 00:00:00 EST 23AC801466B4441389536B5F4533A426 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=0ED4064A4B244C7CB9AA97FBBAE05771 Matthew Kingery , a partner in the Charleston office of Dinsmore & Shohl, was recently honored with the Young Lawyer of the Year Award presented by The West Virginia State Bar at their annual meeting. The Young Lawyers Section of The West Virginia State Bar established the award to annually honor one young lawyer who has brought honor and distinction to the legal profession through a commitment to community service and the citizens of West Virginia . Kingery's practice focuses on a wide range of real estate matters with emphasis on title, acquisitions, sales and financing issues. His experience includes transactions involving both complex estates and oil, gas and mineral issues and he has a wealth of experience with landlord tenant issues and title insurance matters. His clients include lenders, property owners, developers and property management groups. Outside of his practice, Kingery devotes a majority of his time to civic and professional organizations throughout West Virginia . In 2007, he served as the co-chair of Charleston Area Alliance's Young Professionals Housing Committee and as its representative to the West Virginia Housing Development Fund's single family housing ad hoc committee. From 2008 to 09, he served as the co-chair of Generation Charleston and was involved in the formative meetings of Generation West Virginia. During this time, Kingery helped raise the profile of the young professional's network, including raising awareness of important issues in the Capital City and developing initiatives to address these issues. Kingery currently serves on both the Board of Directors for the Charleston Area Medical Center Foundation, Inc. and Advisory Committee of the University of Charleston Graduate School of Business. In addition to further serving those organizations on various subcommittees, he also supports the Hugh O’Brian Leadership Seminar in West Virginia , having served as a volunteer in a variety of capacities since his junior year at Poca High School . Kingery has also been recognized for his work in the legal industry and the community and has received numerous awards including being selected to the West Virginia Rising Stars ® List and being honored as a recipient of the 2009 Generation Next: 40 Under 40 award by The State Journal . He earned his J.D. and served as class President at West Virginia University College of Law and earned his B.A. from Marshall University . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 20 May 2010 00:00:00 EST 0ED4064A4B244C7CB9AA97FBBAE05771 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=A53FCDF52A6C434BB0398DC2CF89A426 The New Mexico Public Regulation Commission on May 13 approved a resolution establishing a search committee to help guide the selection process for New Mexico ’s next superintendent of insurance.  The superintendent position is vacant following the May 4 resignation of Morris J. “Mo” Chavez . State law (NMSA 1978, § 59A-2-2) dictates that the commission has the duty and authority to appoint the superintendent.  The vacancy, commissioners contend, provides the commission with the opportunity to make transparent the agency’s hiring policy. The committee is the ideal vehicle to facilitate the commission’s goal. “Transparency is one of our primary goals with this effort,” commission Chairman David W. King said. “This is an extremely important position and we’re committed to doing everything we can to ensure we get the best candidate to lead our Insurance Division. We look forward to working with this committee and are excited about getting input and recommendations.”  Commissioner Sandy Jones concurred and said he believes the diverse group will produce a quality pool of finalists for the position.  “With one of the most important positions in New Mexico government vacant, this commission determined that involving representatives of industry, finance and consumer groups in the selection process is an important step in re-establishing the public’s trust with regard to hiring practices at this agency,” Jones said. “We want this process to be as open as possible.”  The committee will be composed of seven representatives from insurance and related industries, two appointees from each of the five elected commissioners and co-chairs Fabian Chavez (a former superintendent of insurance) and Loretta Armenta (Qwest).  The committee’s responsibilities include: reviewing all resumes and letters of interest submitted by applicants; interviewing applicants who meet minimum requirements established by the committee; calling references for those applicants who are deemed most qualified; conducting background checks and, no later than June 24, submit to the commission the names and resumes of the five most qualified applicants.  The commission expects to appoint a new superintendent of insurance by early July. Until then, Thomas Rushton will continue his role as acting superintendent of insurance. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 20 May 2010 00:00:00 EST A53FCDF52A6C434BB0398DC2CF89A426 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=86D6C6956DAF4DE49A6F1109F1AA9210 Closing.com is taking on a new venture through a partnership with Zillow Mortgage Marketplace through which borrowers will be provided access to detailed, local, real-time estimates of all closing costs. Every loan quote provided to borrowers within Zillow Mortgage Marketplace now includes Closing.com’s closing cost estimates. Each quote also includes a link to Closing.com’s SmartClosing Calculator, providing borrowers with closing cost estimates broken down to include details such as local transfer taxes and recording fees.   Zillow is one of several leading national real estate search sites that have partnered with Closing.com in an effort to make it easy for homebuyers to learn about closing services and costs at the same time they browse listings or research a mortgage. “Zillow provides homebuyers, sellers and homeowners with valuable data and information about homes, as well as an innovative platform to research and find mortgages through Zillow Mortgage Marketplace. We're excited to be working with Zillow to provide borrowers within the Zillow Mortgage Marketplace additional tools to calculate their closing costs,” said Julie Han , VP of business development for Closing.com. At Zillow, our goal is to help people become smarter about real estate, including home loans, as this is one of the most critical aspects of homeownership. Closing costs can account for 3 to 5 percent of the cost of buying a home, and thus we feel it is incredibly important for borrowers to have all the information they need on this aspect of obtaining a mortgage. We’re happy to be working with Closing.com to help provide this information,” said Spencer Rascoff , COO of Zillow.com. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 18 May 2010 00:00:00 EST 86D6C6956DAF4DE49A6F1109F1AA9210 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=47F84D6FEE0F457E9E078E1A009A1C86 Department of Housing and Urban Development (HUD) Secretary Shaun Donovan unveiled the agency’s strategic plan, which he said will serve as the agency’s roadmap toward accomplishing its mission to “create strong, sustainable, inclusive communities and affordable homes for all.”  This Strategic Plan isn’t just a paper exercise to produce a set of marching orders, but a real attempt to express what we want our agency, our homes and our neighborhoods to look like in the years to come,” said Donovan during his address to all HUD staff nationwide. “The plan sets out clear goals and defines success as we take HUD to its 50th anniversary in 2015.” The plan will guide the agency through fiscal years 2010-2015. Through it, HUD will: Strengthen the housing market to bolster the economy and protect consumers: To restore stability to the market, HUD will reduce the foreclosure rate and in partnership with the Department of the Treasury, assist 3 million homeowners who are at risk of losing their homes due to foreclosure by the end of the fiscal year 2011. HUD will also increase FHA capital reserves to above 2 percent and stabilize neighborhoods by helping communities purchase abandoned and vacant properties. Meet the need for quality affordable rental homes: HUD will balance the support for sustainable homeownership and rental housing by directly contributing to the production of millions of new rental homes while also preserving their affordability, quality, accessibility and energy efficiency. Utilize housing as a platform for improving quality of life: Stable housing provides an ideal platform to deliver a wide variety of services to improve education, health, economic security and the safety of residents. Building upon HUD’s recent efforts to reduce chronic homelessness, HUD will use technology and improved accessibility to data to make federally subsidized housing a catalyst for investments in education, health and job training, and leverage private capital to expand housing for the growing number of seniors and homeless Americans — and end homelessness altogether. Build inclusive and sustainable communities free from discrimination: Many of the neighborhoods hit hardest by the economic and housing crisis are among the least sustainable — with limited access to economic opportunity, the longest commuting times, the unhealthiest homes and the poorest quality schools. To transform neighborhoods, we will link housing to schools, jobs and better transportation through the Choice Neighborhoods Initiative and Office of Sustainable Housing and Communities, and provide gap financing through a Catalytic Investment Fund for innovative, high-impact development projects that will create jobs in communities with longstanding development challenges. Transform the way HUD does business: HUD recognizes that it cannot accomplish the goals in the Strategic Plan without changing the way the agency does business. HUD plans to work now to affect change by building capacity within the agency; improving performance management and accountability; decentralizing decision-making to empower staff; and simplifying programs, rules and regulations. Although details of the plan were released May 12, HUD said it has already begun meeting President Obama ’s challenge for federal agencies to collaborate on all levels to deliver meaningful results to all Americans. In just 16 months, HUD said it demonstrated this commitment by: Allocating all $13.6 billion from the American Recovery and Reinvestment Act of 2009 to all 50 states in just eight days. In only six months, all funds from the Recovery Act were available to be spent by communities across the country to create jobs and help families facing foreclosure. Working alongside nearly 350 public housing authorities nationwide to provide temporary housing to the more than 30,000 families that were displaced from their homes by Hurricanes Katrina and Rita. Collaborating with its partners in the administration to stabilize housing markets — stabilizing home prices, rebuilding homeowners’ equity and revitalizing communities overrun with foreclosures. “By engaging thousands of our employees and partners this Strategic Plan reflects the spirit of President’s Obama’s community organizing work on Chicago ’s South Side — the importance of consensus-building, listening to people’s needs and trying to find common ground,” said Donovan. “This Plan isn’t about my legacy or even President Obama’s, but the legacy we all leave here at HUD at a time in which the agency has never been more important.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 18 May 2010 00:00:00 EST 47F84D6FEE0F457E9E078E1A009A1C86 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=6D2BC03C1D854877A95720D2C7601446 DocMagic Inc, developer of DocMagic, a technology provider of compliant mortgage loan document preparation software, announced the filing of an amended complaint in U.S. District Court in San Francisco , Calif. , Case No. 3:09-CV-4017-MHP, against Ellie Mae, former reseller of DocMagic loan documents and former ePASS partner.   In August 2009, DocMagic filed two lawsuits against Ellie Mae: one in federal court for antitrust violations, intentional interference with contractual relationships, interference with prospective economic advantage and unfair competition; and one in San Francisco Superior Court seeking a permanent injunction against Ellie Mae arising out of Ellie Mae’s misuse of DocMagic’s proprietary information in connection with the Ellie Mae Docs system. At the urging of the federal court judge, the parties have since agreed to consolidate the state case claims into federal court and to dismiss the state case without prejudice.   The amended complaint sets forth 14 federal and state claims, expanding on the allegations and claims initially made against Ellie Mae. The significant amendments include: expansion of antitrust allegations and claims, including an explanation of market definitions, monopoly leveraging, attempted monopolization, refusal to deal and denial of access to essential facility (all federal violations of Section 2 of the Sherman Act); addition of claims under the Lanham Act for unfair competition and false advertising; addition of claim for copyright infringement; addition of claim for trade secret misappropriation; and addition of claim seeking declaratory judgment that DocMagic did not infringe upon Ellie Mae’s copyrights and that Ellie Mae has no claim to the ownership of its client’s loan data.  In late April, Ellie Mae filed an answer to DocMagic’s original complaint, as well as an amended counterclaim against the company. The amended counterclaim included allegations regarding the reseller agreement, a claim under the California Comprehensive Computer Data Access and Fraud Act and claims for initial interference with contractual relationships and intentional interference with prospective economic advantage, which are based on the allegation that DocMagic improperly solicited Ellie Mae’s customers by promoting direct access to DocMagic.   The deadline for both parties to file motions to dismiss is June 14. Oppositions to those motions must be filed by July 12. A hearing on motions to dismiss will be July 26. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 13 May 2010 00:00:00 EST 6D2BC03C1D854877A95720D2C7601446 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=8D071E2C2802412EA7F963A1810B71D8 The new RESPA rule has changed title agent-client relationships in ways that have closed down some marketing channels for agents, while opening a host of others. In a “Strategic Marketing under RESPA” Webinar on May 20, industry experts will share six strategies for redefining marketing objectives to expand relationships with existing clients, while attracting new clients through a variety of channels.      Sponsored by October Research Corp. and The Title Report , “Strategic Marketing under RESPA” will air on Thursday, May 20, from 2-3:30 p.m. To register, visit www.octoberstore.com .  The Webinar will feature Anne M. Wenninger Gehring , JD, vice president compliance manager - retail lending for Marshall & Ilsley Bank;   Michele Cope , escrow manager for Colorado Escrow & Title; Todd Ewing , founder & president for Federal Title & Escrow Co.; Loretta Salzano , founding partner of Franzén & Salzano; and Susan Simpson , operations director for Passport Title Services.  The new RESPA rule has forced lenders and title agents to retool every facet of their procedures from the first request for a title search, to the finalization of the loan package back to the lender’s desk. Real estate agents, underestimating the impact the rule would have on them, largely avoided training opportunities but are now seeking insight from their title insurance providers. Agents who are prepared, flexible and willing to take on an educational role in their local market will discover a significant marketing advantage.  “Agents should be reaching out to clients and potential clients before they even get a deal,” advised Salzano. “The idea is to use this is a marketing opportunity. This is not about just talking to them on a per-loan basis, but about establishing a relationship with your partner so they know they can rely on you.”  The panelists will outline six strategies that will cover such topics as information delivery, educational outreach, building trust, consumer outreach, third-party provider lists and fee guarantees. “There are a lot of pitfalls to be aware of, especially if the title companies are using fee calculators,” Simpson warned. “In certain jurisdictions, whether it is state-by-state or sometimes even county-by-county, there are subtle nuances in calculations of transfer and recording taxes that dramatically affect the zero-tolerance issues for that lender.”  Gehring agreed and noted that the tolerance issues demand a higher level of communication between title agents and lenders. “The flow of information is critical as early as possible,” Gehring said. “But we’ve had situations where the numbers haven’t been accurate. There are a lot of different ways to get to the right answer, and if not done correctly, it could create tolerance issues for us.”  During the May 20 Webinar, the panelists will address:  Strategy #1: Fee Quotes/Guarantees: What internal resources you need to re-evaluate how fee quotations are prepared. How to build a technology platform to provide client access to fee information. What you need to know about RESPA compliance issues surrounding fee guarantees. Strategy #2: Educational Outreach: The importance of assessing educational opportunities in your client base. How to build viable educational products for clients. How to use one-on-one meetings to add value to your services.  Strategy #3: Information Delivery: How to tune into the needs of your clients to deliver timely information. Strategies for optimizing critical communication processes. What internal processes need to be revamped to assure clients are getting information in the form that is most helpful to them.   Strategy #4: Maximizing Opportunities: The parameters of the third-party provider lists under RESPA. Which methods will be most successful in ensuring your place on provider lists. How you can inspire your clients to educate consumers about the lists.  Strategy #5: Building Trust: How to ferret out problems within the loan instructions. Methods to optimize client communication over problematic instructions. The best way to address potential violations within the instructions. Strategy #6: Consumer Pathways: Identifying opportunities to reach out to consumers. How to maximize your marketing opportunities at the closing table. Finding new pathways to build a viable direct-to-consumer channel. To register or for more information about the October Seminar’s “Strategic Marketing under RESPA” Webinar, go to www.octoberstore.com. October Seminars is a division of October Research Corp. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 13 May 2010 00:00:00 EST 8D071E2C2802412EA7F963A1810B71D8 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=2582D2697D0C4048A74B1B171210A190 As lenders and originators continue to struggle with the challenge of RESPA’s new “changed circumstances” caveat to the Good Faith Estimate (GFE), RESPA experts are advising that originators have a thorough grounding in how to do the analysis on whether an incident is indeed a changed circumstance under the Department of Housing and Urban Development’s (HUD) definition. During a May 18 “Changed Circumstances” Webinar, produced by October Seminars, RESPA attorneys will walk listeners through what that analysis should encompass, and provide tips on how to navigate the complicated challenges between lenders and third-party originators.  The Webinar, “Changed Circumstances: Understanding the New GFE Rules” will air Tuesday, May 18 from 2-3 p.m., and will feature Stevens & Lee attorneys Paul Schieber and Jed Mayk . To register for the Webinar, go to www.octoberstore.com .  “Despite how expansively they wrote the new regulation,   HUD’s view when it comes to the origination charge — the instances where that amount can increase — is much narrower as far as what is a changed circumstance,” Mayk said. “That has been a big issue out there.”   Changed circumstances continues to confound many in the lending industry, and some experts fear this part of the RESPA final rule will result in legal trouble for those who do not handle them in a manner compliant with RESPA. The final rule states that lenders are bound by the fees disclosed in the GFE, except in the case of a changed circumstance, which allows fees to be changed and the GFE to be reissued. But what exactly qualifies as a changed circumstance?  On May 18, Schieber and Mayk will provide expert training on changed circumstances, explaining HUD’s new rule, looking at the relevant analysis available on incidents surrounding changed circumstances, and providing tips on how to compliantly address changed circumstances when they do arise, both in the early stages of loan origination as well as at the closing table.  The Webinar will also cover: The relationship between mortgage brokers and lenders, and how it has changed because of the new RESPA rule; The binding effect and timing requirements of the GFE and what mortgage brokers and lenders have to do to be in the three-day window from the time the application is received; Different trends between lenders and mortgage brokers in terms of issuing the GFE, including who is controlling the forms content; and How the Mortgage Disclosure Improvement Act impacts the new requirements under RESPA. Schieber said he will also review the issues surrounding provider lists during the one-hour Webinar, and the challenges lenders face in deciding whose providers list they can rely on.      “I f you are a lender are you going to have the broker provide the services providers list or are you going to give the broker a required list of service providers that they have to give to the consumer with the GFE?” Schieber asked. “There are implications to either decision that must be considered.”  To register or for more information about the October Seminar’s “Changed Circumstances” Webinar, go to www.octoberstore.com . October Seminars is a division of October Research Corp. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 11 May 2010 00:00:00 EST 2582D2697D0C4048A74B1B171210A190 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=8B9B0070E6D84AAB883F9763B85249E6 New Mexico Insurance Superintendent Morris J. “Mo” Chavez tendered his resignation to the New Mexico Public Regulation Commission (Commission) Tuesday, May 4. Members of the Commission indicated they would accept the resignation, which was effective at the close of business 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 specific reasons for resigning.  Members of the Commission thanked Chavez for his service to the state.  “We appreciate the work he’s done here on behalf of the state,” Commission Chairman David W. King said. “We wish him well in his future endeavors.”  The Commission moved quickly to appoint an interim replacement, elevating Deputy Superintendent Thomas Rushton to the post. There has been no word as of yet as to when a permanent replacement will be found. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 06 May 2010 00:00:00 EST 8B9B0070E6D84AAB883F9763B85249E6 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=E619573E0EED462EB3EEAFB750CA1E78 In a ruling that’s being closely watched by some insurers, a Thurston County judge has affirmed that the Washington state insurance commissioner may hold an insurance company liable for the actions of the company’s appointed agent. “If you allow someone to do business on your behalf, it only stands to reason that you can be held responsible for what they do,” said Washington state Insurance Commissioner Mike Kreidler . In an order dated April 23, 2010, Superior Court Judge Paula Casey ruled that Chicago Title Insurance Company could be held responsible for illegal inducements offered to solicit title insurance business by one of its appointed agents, Land Title Company of Kitsap County, Inc.  The alleged violations included illegally “wining and dining” real estate agents, builders and mortgage lenders by providing them with such things as: hundreds of dollars in meals, thousands of dollars for a golf tournament, monthly advertising for at least one real estate agent, purchases at a Board of Realtors’ auction, and Seattle Seahawks playoffs game tickets. Although Land Title was Chicago Title’s exclusive agent in the Washington counties at issue, Chicago Title argued that it was not responsible for Land Title’s acts. At a hearing in the matter last year, the company maintained that there was no legal basis to hold it accountable for its agent’s actions. In a consent order last October, the company said it would appeal the agent liability issue, but agreed to pay a fine of $48,334 if it did not prevail.  Chicago Title has not yet exhausted all appeals. Title insurance practices have long been a concern to Kreidler. In 2005, his office scrutinized 18 months of employee expense reports and general ledgers of the largest title companies in King, Pierce and Snohomish counties. New rules took effect on March 21, 2009 which clearly outline what can be given. There are limits on advertising, donations to trade associations, meals, training, leasing workspace and gifts. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 04 May 2010 00:00:00 EST E619573E0EED462EB3EEAFB750CA1E78 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=BDD7FDA31143487DA5D58D03214F8180 The Santa Rosa , Calif. , firm of Smith Dollar PC announced the addition of three new attorneys to it its firm. Ronald Arlas , Matthew Chavez , and Douglas Schwed will further enhance the firm's already extensive lineup of experience in mortgage litigation, real estate and financial services. Arlas was formally counsel to three national mortgage companies. He specializes in mortgage banking advice and litigation. He has been counsel of record in over 250 mortgage banking lawsuits in more than a dozen states on behalf of wholesale mortgage banking clients. Arlas received his JD at the University of Michigan Law School and is currently licensed to practice in California State and Federal Court. Chavez was formally with Lanahan & Reilley specializing in the areas of mortgage fraud, title insurance analysis, counseling & litigation. He is a graduate of Columbia Law School where he was the editor of the Columbia Law Review. Chavez has been heavily involved with the development and support of legal aid programs that provide quality civil legal service to impoverished clientele in areas such as landlord/tenant relations, consumer matters, and government benefits. Chavez is currently licensed to practice in California , Washington , D.C. , and New Mexico . Schwed brings to Smith Dollar PC his extensive bankruptcy and civil litigation experience representing clients in the mortgage banking industry with an emphasis on loss mitigation and asset recovery resulting from mortgage broker and appraisal fraud, title insurance and escrow fraud, and loan repurchase defaults and director and officer liability and fraud. Schwed is a graduate of Gonzaga School of Law and is currently licensed to practice in Washington & Oregon . Smith Dollar PC is a real estate and financial services law firm providing legal services to individuals and businesses in California . Its clients include financial institutions, mortgage lenders, loan servicers, secondary market investors, investment bankers, home builders and contractors. The firm accepts transactional and litigation matters arising anywhere in California and handles mortgage fraud cases for lenders and secondary market investors on a nationwide basis. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 29 Apr 2010 00:00:00 EST BDD7FDA31143487DA5D58D03214F8180 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=90EF9586C8564D92B40E9C79CC6C16AA The House Financial Services Committee approved legislation to ensure that the Federal Housing Administration (FHA) remains viable and continues its mission of insuring mortgage loans. Rep. Maxine Waters , D-Calif., chairwoman of the Housing and Community Opportunity Subcommittee, drafted the FHA Reform Act of 2010 ( H.R. 5072 ) in response to recent events that caused FHA’s reserves to fall below the two percent level required in law.  The Act will empower FHA to improve its financial position by allowing the agency to adjust its premium structure for new borrowers, while still providing affordable mortgage insurance to the individuals FHA is intended to serve including low-income and minority borrowers and individuals in traditionally underserved areas. FHA has filled a vital role in the nation’s economy, helping 37 million Americans attain homeownership since 1934 and providing crucial insurance at a time when the private market has pulled back from the mortgage market. “The economic crisis that started a couple of years ago and declining home prices have caused FHA’s capital reserves to deteriorate in recent months, but under the leadership of Secretary Shaun Donovan and FHA Commissioner David Stevens , FHA has taken unprecedented administrative and regulatory steps to improve risk management and root out bad actors participating in the program,” Waters said.  “This legislation makes essential reforms to strengthen FHA’s finances.” H.R. 5072 also provides FHA with enhanced authority to terminate lenders’ approval to originate or underwrite loans backed by FHA insurance when FHA finds evidence of fraud or noncompliance.  Such enhanced authority is needed, particularly in light of the recent cases of Lend America and Taylor Bean and Whitaker, who perpetuated fraud schemes spanning many years. In addition, Waters’ legislation requires FHA to improve its internal reporting systems to better manage risk and to provide transparent data to the public and to Congress.  This includes improving monitoring of early defaults and claims, tracking mortgage information by loan servicer, providing FHA with the ability to contract out for additional credit risk analysis, requiring mortgagees to report to FHA when they stop buying loans from other mortgagees and requiring a Government Accountability Office study on FHA and Ginnie Mae.  The bill also creates a new Deputy Assistant Secretary at FHA for Risk Management and Regulatory Affairs. Waters drafted the legislation after conducting three hearings on FHA in the last six months. H.R. 5072 has the support of a diverse group of organizations including the National Urban League, the National Council of La Raza, the National Community Reinvestment Coalition, the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 29 Apr 2010 00:00:00 EST 90EF9586C8564D92B40E9C79CC6C16AA http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=436B3C784ECC422EA5F9C5A84A4618B5 As a revised rule concerning the annual review of title insurance agent escrow accounts remains under consideration by the Ohio Department of Insurance (ODI), the Ohio Association of Independent Title Agents took the opportunity to voice their concerns about some of the revisions.   The rule, which was originally drafted and made effective Jan. 1, 2007, was created to establish the criteria for the annual independent review of title insurance agents’ escrow, settlement, closing and security deposit institution accounts.   The original rule requires title insurance agents to annually report: Account information for all depository institutions with which the agent conducts business; The results of three-way reconciliations (depository institution statement to book balance to open escrow trial balance) for the most recent monthly period; A listing of all jurisdictions in which the agent conducts settlements; A certification of required insurance coverage; and A listing of all the agency’s affiliated companies that are owned or controlled, in whole or in part, by a person or persons prohibited from acting as a title agent pursuant to division (B) of Ohio Revised Code § 3953.21 or by a builder or developer.   The proposed rule seeks, among other things, to correct certain clerical mistakes made in the drafting of the current rule. This includes adding the term “insurance” to the defined term “agent” in OAC 3901-1-01(A) and (C)(2) and clarifying filing requirements relative to the as-yet-to-be prescribed ODI form for reporting the review findings. The proposed rule also separates exempt agents (which includes agents that do not handle escrow account funds related to Ohio transactions and agents that average five Ohio transactions or less per month) and non-exempt agents, creates a new filing requirement section and eliminates the current form system for reporting the review findings to the ODI.   In a letter to ODI Director Mary Jo Hudson last week, OAITA voiced their concerns.   OAITA was specifically concerned about the effects of one amendment to the original rule — the elimination of the definition of affiliated company from the revised rule. The association pointed out that now the only definition of “affiliated company” and “control” are found in Ohio Revised Code § 3901.32(B).   “By removing the above-definition, you have effectively resolved one serious defect — the fact that controlled business arrangements would never have anything to report under the current rule — and replaced it with another — the fact that controlled business arrangements now have no requirement to annually certify that they are not currently owned by a person prohibited from the business of title insurance under Ohio Rev. Code § 3953.21(B),” the letter stated. “In both scenarios, you have given controlled business arrangements a free pass to continue operating despite Ohio ’s strict statutory prohibitions against such business ventures. Even assuming the purported legitimacy of controlled business arrangements in Ohio, you now have no way to know whether the information contained in the original license application from the controlled business arrangement still represents the true state of ownership or whether prohibited persons do, in fact, possess ownership and/or control of a title insurance agency.”   The association also asked the department to revise OAC 3901-7-01(H)(2)(b) to require that the department “obtain from the title insurance agent, title insurance agency and any subsidiaries thereof, a listing of all persons that own at least 10 percent of the voting securities of the title insurance agent or title insurance agency, whether directly or indirectly. Control shall be presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote or hold proxies, representing 10 percent or more of the voting securities of any other person.”   “Revised in this fashion, the ODI can collect the same type of data already required under the title insurance holding company system statute found at Ohio Revised Code §3901.32 and § 3901.33, without limiting the information to just prohibited persons under Ohio Revised Code § 3953.21(B). Clearly, this was information the Ohio General Assembly deemed important to collect and is already required under the title insurance holding company statute Ohio Revised Code § 3901.33. Further, the above-cited language would require all title insurance agents and title insurance agencies to annually report and certify their corporate structures. In our ever-changing environment, this information is invaluable to proper enforcement of rules and statutes against licensed entities,” the letter stated.  The OAITA also made an argument for the creation of a dedicated title insurance division to enforce the insurance code.   “The ODI requires a title insurance division to conduct its enforcement and oversight obligations under Ohio law. We have already engaged in these discussions with the members of the insurance committee at the Ohio House of Representatives. It is our opinion that the director’s mission, as it pertains to title insurance, could be greatly enhanced with a dedicated title insurance division. Further, it is our belief that rules such as OAC 3901-7-01 could be better enforced from the perspective of title insurance field examiners staffed by personnel from the ODI, rather than the current self-reporting requirements found in the proposed rule,” the association stated. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 27 Apr 2010 00:00:00 EST 436B3C784ECC422EA5F9C5A84A4618B5 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=B83E96DE5CA24D3784428D3CE61296F9 As financial reform packages await debate in the Senate, the Obama Administration is seeking guidance from the public regarding the future of the housing finance system.   On April 14, administration officials released questions for public comment on the future of the housing finance system, including Fannie Mae and Freddie Mac, and the overall role of the federal government in housing policy. The questions have been designed to generate input from a wide variety of constituents, including market participants, industry groups, academic experts, and consumer and community organizations. The questions will also be published in a Federal Register notice requesting public comments, and information on the process for submitting comments will be included in that notice. “A well-functioning housing finance system is critical to the long term stability of the housing market,” said Treasury Secretary Tim Geithner . “Hearing from a wide variety of perspectives as we embark on this process is an important part of establishing a more stable and sound housing finance system for the American people.” “This open process will help shape the future of our housing finance system,” said U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan . “The Obama administration is committed to engaging the public as we consider proposals for reforming the housing finance system in the context of our broader housing policy goals, and the best steps to get from where we are today to a stronger housing finance system.” The Obama Administration will seek input in two ways. First, the public will have the opportunity to submit written responses to the questions published in the Federal Register online at www.regulations.gov . Second, the Administration intends to hold a series of public forums across the country on housing finance reform. Together these opportunities for input will give the public the chance to deepen the federal government’s understanding of the issues and to shape the policy response going forward. This effort is both in keeping with this Administration’s commitment to openness and transparency and the President’s Open Government Initiative. This initiative represents a major change in the way federal agencies interact with the public by making agency operations and data more transparent and creating new ways for citizens to have an active voice in their government.  Questions being submitted for public comment include: How should federal housing finance objectives be prioritized in the context of the broader objectives of housing policy? What role should the federal government play in supporting a stable, well-functioning housing finance system and what risks, if any, should the federal government bear in meeting its housing finance objectives? Should the government approach differ across different segments of the market, and if so, how? How should the current organization of the housing finance system be improved? How should the housing finance system support sound market practices? What is the best way for the housing finance system to help ensure consumers are protected from unfair, abusive or deceptive practices? Do housing finance systems in other countries offer insights that can help inform US reform choices? Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 15 Apr 2010 00:00:00 EST B83E96DE5CA24D3784428D3CE61296F9 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=F81A3B0B4DA94E9486097E490E0BB482 Connecticut Insurance Commissioner Thomas R. Sullivan announced fines totaling $62,000 against Chicago Title Insurance Company, headquartered in Nebraska based on the findings of a market conduct examination . The market conduct examination found various violations to state law including failure to maintain a proper complaint log, failure to provide sufficient document for regulatory review, instances where the company provided inducement to obtain title insurance business, and instances of failing to charge the rate filed with the department. During the examination, the examiners reviewed approximately 200 underwriting files from the examination period, Jan. 1, 2006 through Sept. 30, 2008. In numerous cases the examiners found that an insurance premium that was inconsistent with the company’s filed rate was charged. They noted that in most of these cases involved refinance discounts that were not properly applied. In addition, several of the files were missing or had incomplete information. The examiners also noted that during the examination Chicago Title was unable to provide a proper complaint log. Their report states that while the company did maintain a complaint log, it did not meet the requirements. Specifically, the examiners said the log does not indicate the time taken to resolve a complaint or the total number of complaints received by the company. In addition, the examiners reviewed a sample of 125 expense disbursements for Chicago Title. Based on a review of the selected sample, the examiners identified 82 instances where the company incurred entertainment-related expenses on behalf of their attorney agents and mortgage brokers totaling approximately $142,000.   The examiners also noted that the company offers producers of business membership into a purchasing program. The program, which the company said operates as a product based discount buyer’s club, is a subsidiary of Fidelity National Financial Inc. During interviews conducted by the examiners, Chicago Title said that membership into the club is not conditioned on conducting or referring title insurance business to the company. Chicago Title was unable to provide specific data regarding the club.   The examiners did note that Chicago Title was generally cooperative with examiners.   Earlier this year, Sullivan fined Fidelity National Title Insurance Co., headquartered in California , $61,000 for similar violations. "The title insurance industry is now on notice that the Connecticut Insurance Department is watching them and will use every tool at its disposal to ensure that they comply with Connecticut law," Sullivan said.  As with all fines issued by the Insurance Department, the full amount will be deposited to the State General Fund. The company complied with the stipulation and final order, and will submit a compliance report to the commissioner within 90 days. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 13 Apr 2010 00:00:00 EST F81A3B0B4DA94E9486097E490E0BB482 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=5CFE52F08AE247CEAA3AFC6E63C51C42 A bill adopted by the Idaho legislature will require that certain title agent information be made public record.   The bill, HB 431 , was introduced by the House Business Committee.   The bill clarifies that title agents may be examined on certain issues. These issues include tract indexes and abstract records, as well as any other records the director finds necessary to examine in order to ascertain compliance with title 41, Idaho Code and related rules. These examinations would occur every five years, unless the agent otherwise requests or the director has cause to believe the agent does not comply with the law or its related rules.   After completing an examination, the director must prepare an examination report. This report will be provided to the title agent and the title agent will be given up to 28 days to review the document, comment and request a hearing. Unless a hearing is requested, the examination report will be deemed available to the public, notwithstanding the exemptions form disclosure provided in chapter 3, title 9 of the Idaho Code. In addition, if the title agency affirmatively requests, any reply to the examination report will also be deemed available to the public.  “However, all working papers and other records produced by, obtained by or disclosed to the director or any other person in the course of an examination will be made available to the person or company which was the subject of the examination,” the bill states. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 08 Apr 2010 00:00:00 EST 5CFE52F08AE247CEAA3AFC6E63C51C42 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=ABD3280AD3704871A82618762A5A6A6C Proposed rules to establish the information required for filing title insurance rates in Washington are moving closer to adoption by the Office of the Insurance Commissioner. The regulations are the last regulations the commissioner is required to adopt after the passage of new title insurance statutes in 2008. Among other things, the statutes amended and changed the manner in which title insurers file title insurance rates with the commissioner.   The proposal was first released last fall. Since then the office has received comments from industry stakeholders and made clarifying corrections, said Jim Tompkins , staff attorney for the Office of the Insurance Commissioner. A hearing on the latest version of the bill will be held on April 27. If no substantive changes are made after the hearing, the regulations will be adopted shortly thereafter.   Prior approval The proposed regulations state that after Jan. 1, 2012, all rates used in the state of Washington must be filed and approved before use. Title insurers would be required to submit their rate filings to the commissioner by Sept. 1, 2011 for rates to be effective Jan. 1, 2012.   When filing a rate with the commissioner, title insurers would be required to demonstrate that the proposed rates comply with state laws and regulations. To the extent possible, each title insurer would be required to provide credible data to support their proposed rates. If credible data are not available, title insurers would be required to provide supporting documentation that describes its process for developing the proposed rates and demonstrates that they meet the requirements of state laws and regulations. Data used to support the proposed rate should be from Washington . If data from other states is used, the title insurer would have to explain why those data are similar to what would be expected in Washington .   If a title insurer proposes to use rates that are identical to the rates of another title insurer, the rate filing would have to include supporting information that demonstrates that the title insurers proposed rates meet the requirements of state laws and regulations. It would not be sufficient to state that the proposed rates are identical to those of another title insurer or that the rates are being filed for competitive purposes.   The rate filing would have to provide sufficient information so that the commissioner could determine whether the proposed rates comply with state laws and regulations and are not unfairly discriminatory. Situations in which the rates would be unfairly discriminatory include: Rating rules that provide for a waiver of the cancellation fee or reduction of the cancellation fee, after a commitment has been issued, to an amount that is less than the title insurer’s, including its agents’, expected average cost to issue a commitment in the geographical area covered by the rating rules; Negotiation or bidding of price; Rate rules that do not have a definite charge for every bracket of coverage; Discounts not provided to all qualifying risks; Rating plans in which policies generating higher premiums subsidize smaller policies or from one geographical area subsidize those from another geographical area; or A title insurer’s application of more than one rate schedule to similarly situated risks in a county or defined geographical area.   If the rates for a title insurance policy depend on the judgment of the title insurer or agent, the title insurer would be required to: File rating rules that describe the specific criteria used for making the rates; Document the rationale for each judgment rate referencing the filed rate rule; Retain supporting documentation required under the rule for at least three years following the effective date of the policy; Make the documentation available for examination by the commissioner on request; and Treat all similarly situated risks equitably. Marketing costs Because title insurers and title agents are prohibited from giving anything of value to any person for the referral of title insurance business and must charge and collect for the cost of providing services to those who are in a position to refer title insurance business, in making rates a title insurer would be prohibited from including income or expenses related to the cost of: Giving anything of value to any person for the referral of title insurance business; Providing information, services and other items of value that a title company is prohibited from giving to a producer of title insurance business under state laws and regulations; and Providing information, services and other items of value that the title insurer or a title insurance agent may give to producers if the title insurer or title insurance agent is paid for the information, services or other items. However, in making rates, a title insurer could include its income or expenses related to the costs of giving permitted things of value to producers of title insurance business and the title insurer’s and title insurance agents’ other marketing expenses.   Expense reporting To support the expense component of the rates, title insurers would be required to include estimates of expected nonescrow expenses; exclude the expected expenses described in WAC 284-29A-070(2); and show how those estimates were calculated and demonstrate how those estimates are connected to the proposed rates.   Expense categories that must be considered when making rates include, among other things: Employees’ salaries and wages; Owners’ and partners’ salaries and wages representing reasonable compensation for personal services actually performed by owners and partners; Employee benefits; Rent; Insurance; Licenses, taxes and fees; and Title plant expenses and maintenance;   If the title agency contract between a title insurer and the title insurer’s appointed title agent provides for a split of premiums between the title insurer and the title insurance agent, the title insurer would have to file premium rate schedules using supporting data and information that are based on that premium split.   Agent data Title insurer’s rate filing would also have to include data that supports the expense component that applies to its title insurance agents. The supporting information required may aggregate the data from agent reports received by the title insurer in one or more years under the provisions of WAC 284-29A-110.   Because the title insurer would be required to report data concerning their agents, title agents would be required to report their premium, policy count and expense data annually to each title insurer for which it produces business. Title agents would be required to report the data following the instructions published by the commissioner on the commissioner’s Web site.   Each annual report would have to include title insurance premiums for all of the agent’s business, as well as the title premiums produced for the title insurer to which the report is sent. Agents would also have to include the number of policies issued by all of the title insurers with which the agent does business, as well as the number of policies issued by the title underwriter to which the report is being sent.   In addition, the report would have to include, among other things, the following expense data: Employees’ salaries and wages; Owners’ and partners’ salaries and wages representing reasonable compensation for personal services actually performed by owners and partners; Employee benefits; Rent; Legal expenses; Title plant expenses and maintenance; Communication expenses; and Loss and loss adjustment expenses.   The agent would also have to provide and explanation describing how expenses are allocated between the agent’s title operations and escrow operations. The explanation would have to demonstrate that the expenses described in WAC 284-29A-070(2) have been excluded.   If a title insurer does not receive a report required under this section by April 1 of every year, the title insurer would be required to notify the commissioner by April 15.   Transaction costs Rates filed with the commissioner would have to include all costs related to the title insurance transaction. This includes the costs to: Maintain the tract indexes; Search and examine the title or title to be insured; Issue preliminary commitments; Determine that each insured estate has been created, conveyed or modified as shown in the policy; Evaluate coverage and amend the policy as needed with appropriate and reasonable exceptions, conditions or modifications; and Any other direct or indirect cost associated with performing these activities.   Filing process Each underwriter would be required to submit complete rate filings, as well as related documents, using the   System for Electronic Rate and Form Filing (SERFF).   The commissioner would have the authority to reject and close any filing that does not comply with WAC 284-29A-120. If the commissioner rejects a filing, the title insurer would have not filed rates with the commissioner. When rejecting a filing, the commissioner would send out an objection letter, which would state the reasons for disapproval. Filers would be required to provide a complete response to the objection letter, which includes a separate response to each objection and, if appropriate, revised exhibits and supporting documentation.   Title insurers would be permitted to authorize a third-party filer to file rates on its behalf. If a title insurer delegates filing authority to a third-party filer, each filing would have to include as supporting documentation a letter signed by an officer of the title insurer authorizing the third-party filer to make filings on behalf of the title insurer. An underwriter would not be permitted to delegate responsibility for the content of a filing to a third-party filer. The commissioner considers errors and omissions made by the third-party filer to be errors and omissions of the title insurer. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 01 Apr 2010 00:00:00 EST ABD3280AD3704871A82618762A5A6A6C http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=612946BEDD494B8FA4BCC046950FF885 A bill that would amend the definition of title insurance agent and the laws governing closing protection letters has moved out of the Illinois House and on to the Illinois Senate.   The bill, HB 5409 , was introduced by Rep. Andre M. Thapedi , D-Chicago. It was unanimously passed in the Illinois House, 102-0.   Under the proposed law a title insurance agent would not be permitted to act as an escrow agent in a nonresidential real property transaction where the amount of settlement funds on deposit with the escrow agent is less than $2 million or in a residential real property transaction unless the title insurance agent, title insurance company or another authorized title insurance agent has committed for the issuance of title insurance in that transaction and the title insurance agent is authorized to act as an escrow agent on behalf of the title insurance company for which the commitment for title insurance has been issued. The authorization would have to be given: By an agency contract with the title insurance company which contract authorizes the title insurance agent to act as an escrow agent on behalf of the title insurance company; or By a closing protection letter issued by the title insurance company to the seller, buyer, borrower and lender. A title insurance agent would not be permitted to issue a closing protection letter.   If an agency contract is the source of authority for the title insurance agent to act as an escrow agent, then the agency contract would provide for “no less protection from the title insurance company to all parties to the real property transaction than the title insurance company would have provided to those parties had the title company issued a closing protection letter.”      If a closing protection letter is issued, unless otherwise agreed to, the closing protection letter would indemnify all parties to a real property transaction against actual loss, not to exceed the amount of the settlement funds deposited with the escrow agent.   A closing protection letter would indemnify all parties to a real property transaction when such losses arise out of: Failure of the escrow agent to comply with written closing instructions to the extent that they relate to the status of the title   or the validity, enforceability and priority of the lien of a mortgage on an interest in land; or the obtaining of any other document specifically required by a party to the transaction, but only to the extent that the failure to obtain such other document affects the status of the title to an interest in land or the validity, enforceability and priority of the lien of a mortgage on an interest in land. Fraud, dishonesty or negligence of the escrow agent in handling funds or documents in connection with closings to the extent that the fraud, dishonesty or negligence relates to the status of the title to the interest in land or to the validity, enforceability and priority of the lien of a mortgage, or, in the case of a seller, to the extent that the fraud, dishonesty or negligence relates to funds paid to or on behalf of, or which should have been paid to or on behalf of, the seller;   The indemnification under a closing protection letter could include limitations on the liability of the title insurance company for any of the following: Failure of the escrow agent to comply with closing instructions that require title insurance protection inconsistent with that set forth in the title insurance commitment for the real property transaction. Instructions that require the removal of specific exceptions to title or compliance with the requirements contained in the title insurance commitment would not be deemed to be inconsistent; Loss or impairment of funds in the course of collection or while on deposit with a bank due to bank failure, insolvency or suspension, except such as shall result from failure of the escrow agent closer to comply with written closing instructions to deposit the funds in a bank that is designated by name by a party to the real property transaction; Mechanics’ and materialmen’s liens in connection with sale, purchase, lease or construction loan transactions, except to the extent that protection against such liens is afforded by a title insurance commitment or policy issued by the escrow agent; Failure of the escrow agent to comply with written closing instructions to the extent that such instructions require a determination by the escrow agent of the validity, enforceability or effectiveness of any document; Fraud, dishonesty or negligence of an employee, agent attorney or broker, who is not also the escrow agent, attorney or an independent contract closer of the escrow agent, of the indemnified party to the real property transaction; The settlement or release of any claim by the indemnified party to the real property transaction without the written consent of the title insurance company; or Any matters created, suffered, assumed or agreed to by, or known to, the indemnified party to the real property transaction without the written consent of the title insurance company. The closing protection letter could also include reasonable additional provisions concerning the dollar amount of protection, provided such limit is not less than the amount deposited with the escrow agent, arbitration, subrogation, claim notices and other conditions and limitations that do not materially impair the protections required by law.   Title insurance companies would be liable for the acts or omissions of its title insurance agent as an escrow agent if the title insurance company has authorized the agent to act on its behalf. The liability of the title insurance agent to the title insurance company for the agent’s acts or omissions would not be limited or otherwise modified because the title insurance company has provided closing protection to a party or parties to a real property transaction escrow, settlement or closing. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 01 Apr 2010 00:00:00 EST 612946BEDD494B8FA4BCC046950FF885 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=BCEE7F2DA4D5414385C80097CCADC3F2 A U.S. district court judge in Maryland denied a homeowner’s motion to file an amended complaint against a national underwriter based on a decision handed down by the U.S. 4th Circuit Court of Appeals ordering another homeowner in a similar situation to exhaust administrative remedies first.   The case is: Donna G. Woods, individually and on behalf of a class of consumers similarly situation v. Stewart Title Guaranty Co. ( U.S. District Court for the District of Maryland, No. CCB-06-705).    The named plaintiff, Donna G. Woods , filed suit against Stewart Title Guaranty Co., alleging that Stewart overcharged her and other consumers who refinanced their homes within 10 years of obtaining valid title insurance on the same property by not providing them discounted reissue rates as required by Stewart’s rates filed with the Maryland Insurance Commissioner. The court previously dismissed all but one of Wood’s claims under Maryland Law for money had and received and certified a class with regard to that claim.   Following the 4th Circuit’s decision in Arthur v. Ticor Title Insurance Co., which upheld the dismissal of a similar claim for money had and received for failure to exhaust administrative remedies with the Maryland Insurance Commissioner, Woods sought leave to amend her complaint and add claims for negligence, breach of implied contract and violations of the Racketeer Influenced Corrupt Organizations Act. She also filed a complaint with the Maryland Insurance Administration (MIA), alleging the same claims. Woods has not yet received a disposition from the MIA.   Stewart opposed Woods’ motion and filed a motion for summary judgment and decertification of the class.      District Court Judge Catherine C. Blake denied Woods’ motion for leave to amend and affirmed in part and denied in part Stewart’s motion for summary judgment.   First, Blake agreed with Stewart that amending Woods’ complaint would be futile following the 4th Circuit’s holding in Arthur .   “Amendment in this case would be futile because the 4rth Circuit’s holding in Arthur requires that Woods’ proposed new claims be exhausted in an administrative proceeding and Woods has not done so,” Blake said.   Blake noted that the 4th Circuit upheld the dismissal of the plaintiff’s claims in Arthur because it agreed with the district court that exhaustion of administrative remedies under the Maryland Insurance Code was required. She also noted that the circuit court determined that the plaintiff’s claim implicated the expertise of the insurance commissioner would be in a better position than a federal court to determine, for example, whether the plaintiffs are correctly interpreting the rate structure that Ticor Title Insurance Co. filed with the commissioner.   Blake also found that Woods’ proposed new claims reiterate her prior allegations that Stewart exceeded its filed insurance rates and, therefore, depend on the Maryland Insurance Code in the same way that the plaintiffs in Arthur did.   “Here, each of Woods’ proposed claims requires an interpretation and application of the Insurance Code and Stewart’s filed rates,” Blake said. “This is precisely the sort of exercise that the 4th Circuit found to implicate the expertise of the insurance commissioner in Arthur .”   Woods argued that because she filed a complaint with the MIA following the outcome in Arthur , she has fulfilled the requirements of exhaustion and amendment is not futile. She contended that the court need only stay her case until she receives a disposition in her administrative proceeding.” The court disagreed, finding that she had not presented any sufficient reason to do so.   “Following Arthur , it is preferable to dismiss and allow Woods’ administrative proceeding to make determinations that may affect later judicial proceedings, rather than keep this case open indefinitely,” Blake said. “Woods has not met the requirements of exhaustion simply by filing a complaint with the MIA three years after filing the present lawsuit. Rather, until the final resolution of her administrative proceedings, this court lacks jurisdiction to adjudicate her case and amendment of the complaint would be futile.”   Blake then addressed Stewart’s motion for summary judgment and decertification of the class, finding first that summary judgment is not warranted at this stage. “ Arthur does not require that judgment as a matter of law be entered in favor of Stewart simply because Woods has not yet received a disposition from the MIA,” Blake said. “Accordingly, the court will deny summary judgment and instead will dismiss Woods’ claim for money had and received without prejudice, subject to the exhaustion of administrative remedies.”      Blake did, however, decertify the class, finding the court’s certification no longer appropriate “now that it has become clear that Woods’ claim is not properly before the court.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 30 Mar 2010 00:00:00 EST BCEE7F2DA4D5414385C80097CCADC3F2 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=8AD214067A2040BEA0732D09210D7B97 California Insurance Commissioner Steve Poizner announced that he has reached an agreement with an underwritten title company and two of its title marketing representatives to resolve actions taken against each for alleged illegal rebate activities. Advantage Title, Inc., and two of its marketing representatives, Michael Langgle and Mariya Vassileva , allegedly engaged in activities to benefit Realtors and lenders as an inducement for the placement and referral of title business, in violation of rebate laws. "I refuse to allow title companies or its sales representatives to break the law and drive up rates for consumers through illegal rebating," said Poizner. "I hope that title marketing representatives and companies will think twice before engaging in this practice." Under the California Insurance Code, it is illegal to provide educational programs to realtors and lenders that are not exclusively related to title insurance business. State law prohibits title entities from furnishing any part of the time and effort of its employees for services to Realtors and lenders that are unrelated to title business. Under recent legislation, the Department of Insurance (CDI) is authorized to bring administrative actions against individual title marketing representatives along with title companies who engage in illegal rebate practices. Since the law went into effect, CDI has aggressively prosecuted actions against individual title marketing representatives for instances of illegal rebating. CDI alleged that Langgle, Vassileva and Advantage Title, Inc., facilitated the presentation of a free seminar for Realtors and lenders on a subject unrelated to title business. The seminar, "Learn the Art of the Short Sale," took place in Irvine on Dec. 14, 2009. Approximately 30 Realtors and lenders attended the meeting. Langgle and Vassileva created and distributed flyers, handled registration and reservations, procured a conference room at a discounted rate in the building in which Advantage Title has its corporate office and otherwise helped to organize and coordinate the event. The settlements include agreement by all parties to halt these activities. Under the settlements, Langgle and Vassileva will have their certificates of registration suspended for 15 days. Additionally, Advantage Title will be required to pay a $5,000 monetary penalty. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 25 Mar 2010 00:00:00 EST 8AD214067A2040BEA0732D09210D7B97 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=13F999F28AA34906A740D278C832C19A The Florida Department of Financial Services proposed a new anti-inducement rule that defines the term “unlawful inducement” and provides a list of unlawful inducements to purchase title insurance. The proposed rule, 69B-210.010 , defines the term “unlawful inducement” as permitting, or offering to make, or making, any contract or agreement concerning a contract other than that which is plainly expressed in the insurance contract issued thereon; or paying, allowing, or giving, or offering to pay, allow, or give, directly or indirectly, as inducement to the insurance contract, any unlawful rebate of premiums payable on the insurance contract, any special favor or advantage in the dividends or other benefits thereon, or any valuable consideration or inducement whatsoever which is not specified in the insurance contract. Under the proposed rule, the following inducements would be considered unlawful inducements and constitute unfair insurance trade practices: Facilitating any discount, reduction, credit or paying any fee or portion of the cost of an inspection, inspection report, appraisal or survey, including wind inspection; Providing membership in any organization, society, association, guild, union, alliance or club at a discount, reduce rate or at no cost; Making or offering to make a charitable or other tax-deductible contribution on behalf of the purchaser; Offering or providing any service or incentive in conjunction with the sale of insurance not specified in the policy or contract; Providing or offering stocks, bonds, securities, property or any dividend or profit accruing or to accrue thereon; Providing or offering employment in exchange for the purchase of insurance; Printing or paying for the printing of bulletins, flyers, post cards, labels, etc. for an interested party; Furnishing or paying for the furnishing of office equipment to an interested party; Providing or paying for cellular telephone contracts for an interested party; Providing simulated panoramic home and property tours to real estate salespersons or real estate professionals which they in turn utilize in order to promote their listings; Providing or paying for gift cards or gift certificates to or for an interested party; Sponsoring and hosting, or paying for the sponsoring and hosting, of open houses for real estate salespersons or real estate professionals to promote their listings; Providing or paying for food or beverages at events designed to promote an interested party’s business; Paying advertising costs to advertise and promote the listings of real estate salespersons or real estate professionals in periodicals or publications; Paying an interested party to fill out processing forms in exchange for contracts; Providing leads or mailing lists to an interested party at no cost or a reduced cost; Entering into affiliated business arrangements in an attempt to provide kickbacks to an interested party; Providing, or offering to provide, any other payment, award, special favor, advantage or incentive, tangible or intangible, direct or indirect, that encourages or is reasonably calculated to encourage an interested party to refer business to a title insurance agent or agency, regardless of whether a written or verbal agreement exists regarding the referral. On March 22, the Department of Financial Services was scheduled to have a rulemaking development workshop to discuss the rule, if requested in writing and the Department of Financial Services does not deem it unnecessary. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 23 Mar 2010 00:00:00 EST 13F999F28AA34906A740D278C832C19A http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=38134068CBD34FB494D47383E6F328D1 An April 14 training webinar hosted by October Research Corporation will walk managers through the critical process changes that must take place as a result of a recent case of first impression regarding notary oversight practices.   In addition, the National Notary Association’s (NNA) new Model Notary Act and efforts by the National Conference of Commissioners on Uniform State Laws (NCCUSL) to adopt a revised version of the Uniform Law on Notarial Acts (ULONA) have also shone the spotlight on the pressing need for companies who manage notaries to update their practices, and will be reviewed during the webinar.  Presenting during the one-hour training webinar on April 14 from 2-3 p.m. ET, will be Chuck Faerber , NNA vice president of notary affairs; Bill Anderson , NNA vice president of best practices and e-notarization; and David A. Shean, CSEO/CEI/CNSA, of Escrow Essentials and First Class Signing Services. To register for the “Notary Liability: Assessing oversight risk after the Vancura decision” webinar, visit www.octoberstore.com , or call 877-662-8623 x 7221 for additional information.  During the webinar, Anderson will address an Illinois appellate court’s decision in the recent case of Vancura v. Katris , which set a precedent for expanding notary employer liability, affirming the finding of employer direct liability for negligent training and supervision.   “This is the first time the legal theory of an employer’s liability or responsibility to train and supervise an employee has been applied to notaries,” Anderson said. “It is going to have a far reaching impact. Right now it is somewhat limited to Illinois in that you have two appellate court decisions based upon it in Illinois , but because it is an appellate court decision, any court can pick it up and use it as a basis for an opinion. This is something that is going to be critical for employers as they consider their exposure to liability going forward.”  Changes to state law are also imminent, according to Faerber, and the employers will need to understand new legal parameters for managing their notaries in order to retool their oversight processes.  “The model notary act is barely out the door and we have had tremendous response from the states,” Faerber said. “This is something that is going to have an impact on the laws of many states over the next decade and I think notaries from across the country need to be aware of the provisions they are likely to see in new state laws that will be coming along in the next couple of years.”  Faerber will also address the proposed provisions in ULONA, which is slated to be presented to NCCUSL at its annual meeting in August.  Shean, who is the AEA & CEA Closing Practices Committee Chair of the American Escrow Association, emphasized the importance of employers being proactive in understanding the new demands that Vancura and updates to state law will place on them as they assess their risk exposure.  “The bottom line is that education promotes a better product and better service to our customers,” Shean said. “And the education we are talking about here is critically important. If we don’t do the job correctly, we are going to be affected; we are going to be in court and that’s not where we want to be.”  “Notary Liability: Assessing oversight risk after the Vancura decision” will air Wednesday, April 14, at 2:00 P.M. ET. To register or to order a CD of the program, register at www.octoberstore.com or call 877-662-8623 x 7221 for more information. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 23 Mar 2010 00:00:00 EST 38134068CBD34FB494D47383E6F328D1 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=49992DF06F814104A5B13F60772A4B8A The New York Taxpayers for Economic Justice, Inc., representing a broad coalition of legal, real estate, and free market leadership throughout New York State, outlined their opposition to AB 9441 - SB 6288 , a bill in the New York State Legislature which directs the State Insurance Fund to begin offering title insurance, a class of insurance vastly different from the type of workers' compensation insurance for which the Fund was statutorily created. Steven Day , a spokesman for the group, explained, "At the outset, anyone familiar with the nature of title insurance would recognize that the 'justification' cited in the bill demonstrates a fundamental misconception on how title insurance operates and attempts to portray perceived deficiencies in the industry which, in reality, are nonexistent." The legislation seeks to compare title insurance to other forms of insurance — but in fact title insurance is a completely unique and distinct type of insurance coverage, Day said. Unlike other forms of insurance, which typically cover losses arising from events occurring in the future, title insurance protects against losses caused by pre-existing defects to a property owner's title, in exchange for a one time premium payment for the title policy which remains in effect — without annual premium payments — for as long as the insured remains an owner or for the life of the loan. This unique characteristic affords title insurers and their agents the opportunity to proactively clear, or "cure," defects or exceptions to title that are known or discoverable through an exhaustive search and examination process of public records (oftentimes performed by individuals sifting through municipal or court archives), Day said. Through the process of search and examination and clearance of exceptions to title much of the risk of a title defect can be eliminated prior to the issuance of a title policy. The significant effort undertaken to discover and rectify title defects means that most of the title insurance premium goes to cover the costs related to core services in the examination and closing of a title transaction, while only a relatively small portion of the premium goes to covering claims. On a national basis, nearly 87 cents of every premium dollar collected is spent on risk elimination. Day, observed, "The bill sponsor's seek 'justification' for permitting the Fund to issue title insurance policies suggesting title insurers in 2007 (at the height of the real estate market) collected $1.2 billion in premium but only paid $50 million in claims. Their position is demonstrably wrong and a product of failed arithmetic. Its claim that the Fund will save New Yorkers 'hundreds of millions of dollars annually' based on the industry's low loss ratio critically ignores the high operating expense ratios incurred by the title insurance industry precisely to ensure that problems do not arise and to keep the incident of losses as low as possible." Homeowners have a right to expect that every effort is made in eliminating potential title defects before they crop up and jeopardize their ownership rather than have to present a claim later. As a result, title insurance has a higher expense ratio and lower loss ratio than all other classes of insurance, which are fundamentally different. The group asked what assurances New Yorkers, lenders and participants in the secondary mortgage market would have that the Fund would not be influenced by state budgetary constraints, political pressures or other factors, thereby compromising the integrity of the title insurance process? While Section One of the bill establishes a "title insurance fund" to be "applicable to the payments, expenses and assessments on account of title insurance policies," it is unclear that the Fund would be able to resist attempts to raid its coffers as has been proven repeatedly in state government. In fact, the Insurance Fund has already been raided for purposes other than its established mission. Also unclear is whether New Yorkers will feel confident that the Fund, which operates in the comparatively tepid universe of workers' compensation insurance, will be able to perform the exhaustive amount of labor-intensive, fast-paced work necessary to issue a title insurance policy, which oftentimes must be issued quickly due to transactional considerations. \ Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 11 Mar 2010 00:00:00 EST 49992DF06F814104A5B13F60772A4B8A http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=1538F5022783471AA4427FEA0EE886E8 As part of an effort to understand the expenses incurred by title agents in the state, the Pennsylvania Department of Insurance is conducting a study and requesting select agents provide the department with information through a selected agent data call. The study is the result of a hearing held by the department early last year.   The study is under the direct supervision of the Department and is being funded by the Title Insurance Rating Bureau of Pennsylvania as the department’s statistical agent for the collection of data on title insurance. It is being conducted by Dr. Nelson Lipshutz of Regulatory Research Corp. and Birny Birnbaum of Birny Birnbaum Consulting Inc.   The letter sent out to selected agents states that the study is examining the expense component of title insurance rates with respect to title agents’ activities and expenses and will largely be based on the information provided through the data call. Lipshutz and Birnbaum developed the data call forms based on telephone interviews with a sample cross section of title agents to ensure that it will not be unreasonably burdensome to title agents in the state.   In the letter, the department noted that it had the authority to make the request pursuant to its broad authority to review agent books, records, accounts and vouchers pertaining to the business of title insurance.   “Further, no person or organization may willfully withhold information from, or knowingly give false or misleading information to, the commissioner, any statistical agency designated by the commissioner, any rating organization, or any title insurance company, which will affect rates or fees chargeable under the law,” the letter stated, noting that failure to respond to the request may result on the revocation of an agent’s license.   The data call consists of two spreadsheets, both of which agents must complete. The first spreadsheet contains tables for reporting premium, exposure, expense and transactions data. This includes an income statement, an analysis of their operations expenses, an analysis of their marketing costs, a balance sheet and an agent activity report. The second spreadsheet contains several yes/no and multiple choice questions about an agent’s business operations.   Each title agency receiving the request is required to submit a report for the named title agency and not the results of affiliated agencies.   The department has posted a Frequently Asked Questions report on its Web site and will update the report as questions come in. The department, along with Lipshutz and Birnbaum, will also hold an informational conference call on March 9. The completed spreadsheets are to be submitted via e-mail no later than April 2, 2010. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 02 Mar 2010 00:00:00 EST 1538F5022783471AA4427FEA0EE886E8 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=B014A0B3F6464184989668A48E67F7DD Chris Casa, chief operating officer of October Research Corporation, announced today that TSS Software Corporation has signed on for a second year as the naming sponsor for this year’s combined National Settlement Services Summit and National Compliance Summit, to take place in Cleveland, Ohio, June 15-16, 2010.   “This is a volatile time for title agents and the mortgage industry in general. But we at TSS believe that these are the times in which true leaders and successful businesses find a way to adjust and even thrive,” said Barbara Miller , TSS president and chief operating officer.      The theme of this year’s combined Summits, “Embracing Evolution,” highlights the main component of the Summit ’s content, an emphasis on educating agents on the importance of immersing themselves deeply in the needs of the changing marketplace in order to emerge with creative solutions that will forge stronger connectivity with their partners.   “Right now, the leaders of the industry are at the forefront of things, gathering information on new practices and regulations, networking with peers, and proactively building new products and processes that allow them to adapt and succeed in a changing marketplace,” Miller said. “That is why the Summit is a natural partner for TSS again this year. Cleveland has become the anticipated gathering place each year for the settlement services industry’s best and brightest. We look forward to being the presenting sponsor again, and look forward to meeting and renewing acquaintances with the thought leaders of this industry.”  “We are pleased to partner with TSS Software Corporation again this year for the Summits,” said Casa. “Especially in these turbulent times, TSS consistently embodies the ideas we will be bringing to market at the Summit : the importance of actively embracing the changing marketplace in ways that build stronger businesses.”  “It takes a tremendous amount of effort, planning and financial commitment to bring an event like we have to market,” Casa added. “The opportunity to have this level of education, thought sharing and general networking with 400 of the industry’s best could not come to fruition if it were not for companies like TSS stepping up to the plate. We are fortunate to have companies in the space that understand and push to move the industry forward.”  The Summit expects to attract nearly 400 professionals from across the country for the two-day meeting at the Marriott at Key Center , which is Cleveland ’s state of the art conference facility.   Currently, nearly 20 companies have signed on as sponsors for the 2010 National Settlement Services Summit and National Compliance Summit. Several sponsorships are still available. For more information contact Glen Stout at gstout@octoberresearch.com or (330) 659-6101, ext. 6556.  For more information about the Summits, visit:   www.octoberseminars.com/ns3 . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 25 Feb 2010 00:00:00 EST B014A0B3F6464184989668A48E67F7DD http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=A179AED20F1D4576AC88E9FC4999349E The 8th U.S. Circuit Court of Appeals has affirmed a district court’s grant of summary judgment in favor of a national underwriter that was sued by two development companies, which alleged that the company was vicariously liable for a title agent’s actions due to an agency relationship and directly negligent for failing to monitor the agent’s business.  The companies, Bluehaven Funding LLC and Kanich Development LLC, lost approximately $2.4 million in real estate loan proceeds as a result of doing business with Robert Hartmann and Capital Title Co. Capital Title had entered into a policy issuing agency contract with First American Title Insurance Co. in 1999.   The case is: Bluehaven Funding LLC and Kanich Development LLC v. First American Title Insurance Co. ( U.S. Court of Appeals for the 8th Circuit, No. 09-2383).    From 2002 through 2004, Bluehaven Funding LLC and Kanich Development LLC loaned approximately $2.4 million to Hartmann to purchase properties to be rehabbed and sold. The funds were held in an escrow account at Capital Title, and all of the loan transactions were closed at Capital Title. The companies understood that the loans would be secured by first deeds of trust on the properties Hartmann purchased.   With one exception, there is no evidence that Capital Title issued a First American title insurance commitment or policy to Bluehaven Funding or Kanich Development as the insured to insure any of the loans, properties or transactions at issue.   Ultimately, Hartmann diverted funds in the escrow account to his own use, and when the appellants sought to foreclose on properties for which they supposedly held deeds of trust, they learned that for many of the properties their deeds of trust were not valid or lacked priority. Bluehaven Funding and Kanich Developments claimed Hartmann was able to misappropriate escrow funds, and they received effectively worthless deeds of trust because Capital Title mishandled escrow accounts and real estate closings.   In November 2004, First American learned that Capital Title had bounced checks and initiated an audit of Capital Title’s accounts. The company’s findings revealed that the aggregate amount of outstanding checks drawn on Capital Title’s escrow account exceeded the balance on deposit in the escrow account by approximately $6.5 million. First American then terminated its agency relationship with Capital Title and filed a receivership lawsuit. Capital Title ceased doing business in Missouri when all of its assets were seized and liquidated by a trustee for the benefit of creditors in the receivership proceeding.   Bluehaven Funding and Kanich Development initiated the current action against First American in August 2006. The first 21 counts of the complaint sought to hold First American vicariously liable for various claims against Capital Title for breach of contract, breach of fiduciary duty and negligence based on allegations that Capital Title failed to properly and timely record deeds of trust, ensure full pay-offs of the appellants’ deeds of trust, validate deeds of release, verify satisfaction of pre-existing deeds of trust and properly maintain and disburse escrow funds. Count 22 asserts a claim for direct negligence against First American for failing to monitor and/or audit Capital Title’s business.  The district court granted summary judgment in favor of First American on all claims, finding in relevant part that the vicarious liability claims failed because Capital Title did not have authority to act as First American’s agent in performing the acts alleged in the complaint with respect to the transactions at issue, and the direct negligence claim failed because First American did not owe Bluehaven Funding or Kanich Development any duty to audit or monitor Capital Title’s business.   The court affirmed the district court’s judgment, first addressing Bluehaven Funding and Kanich Development’s arguments regarding the dismissal of their vicarious liability claims. On appeal, Bluehaven Funding and Kanich Development argued that the district court erred when it found Capital Title did not have authority to engage in the activities alleged in the complaint. Specifically, they contended there is a genuine dispute as to whether Capital Title had expressed or implied authority to perform escrow and closing services.   The court noted that the agency agreement specifically granted Capital Title authority to issue title insurance commitments and policies, but did not specifically grant Capital Title authority to provide escrow and closing services. Bluehaven Funding and Kanich Development argued, however, that because the agency agreement does give First American the right to review Capital Title’s escrow accounts and files in certain circumstances, First American must have expressly granted Capital Title the authority to act as its escrow agent. The court disagreed, finding that “this logic contradicts the clear and unambiguous contract language and is not supported by the record.   “Further, the record does not support a finding that Capital Title had implied authority to provide escrow and closing services,” the court stated. “Appellants have not produced evidence from which a reasonable jury could conclude that providing escrow and closing services was ‘incidental and necessary’ to Capital Title’s express authority to sell title insurance.” Having found the conduct alleged in the complaint falls outside the scope of Capital Title’s authority, the vicarious liability claims fail as a matter of law.  Bluehaven Funding and Kanich Development then argued that the district court committed a procedural error when it granted First American summary judgment on the direct negligence claim because First American did not move for judgment on the claim and that even if the court reviewed the merits of the claim, the district court erred when it found First American did not owe a duty to Bluehaven Funding and Kanich Development.   The companies’ negligence claim is based on the allegation that First American owed them a duty to monitor Capital Title’s business, and specifically, Capital Title’s escrow activities. The court concluded that the district court properly found that First American did not owe the appellants the type of duty alleged.   In general, a defendant who has contracted with another owes no duty to a plaintiff who is not a party to that agreement, nor can a non-party sue for negligent performance of the contract. However, courts have made exceptions to the general rule when application of the rule is not necessary to protect the contractual parties, or when it would produce results contrary to justice and public policy. “In this case, appellants rely on a well-established exception to the privity rule for situations where negligent performance of a contract involves harm to third parties,” the court stated. “However, the exception does not apply here, as the facts of this case differ in exception. First, the agency agreement does not obligate First American to review Capital Title’s escrow accounts   and files, rather it simply gives First American the right to do so ‘periodically’ and at times to ‘be determined by’ First American. Second, nothing in the record supports a finding that appellants relied on the results of any potential reviews First American might undertake, or that First American understood that the reviews it might choose to perform would be for the benefit of third parties.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 23 Feb 2010 00:00:00 EST A179AED20F1D4576AC88E9FC4999349E http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=A2F54DC782814E6AB3DA92E3CD4B2294 In the latest of several opinions handed down on antitrust matters, the 2nd U.S. Circuit Court of Appeals has affirmed a district court’s ruling dismissing a suit brought by New York title insurance consumers. The plaintiffs alleged that national title insurance companies doing businesses in New York and the Title Insurance Rate Service Association Inc. (TIRSA) engaged in a price-fixing conspiracy proscribed by Section 1 of the Sherman Act, and deceptive business practices in violation of state law. The district court dismissed the action pursuant to the filed rate doctrine. The plaintiffs then appealed to the 2nd Circuit.   On appeal, the plaintiffs did not dispute that the challenged title insurance rates were filed with the New York Insurance Department or that they are the only rates the defendant title insurers may lawfully charge in New York . Instead, they made five arguments as to why the filed rate doctrine should not apply to their suit, each of which the court rejected.   First, the plaintiffs argued that the filed rate doctrine did not apply because the challenged rates were improperly filed. Specifically, they argued that the inclusions of alleged commissions to title agents without specific disclosure rendered the underwriters’ filings incomplete. The court disagreed.   “Even if the plaintiffs could prove that the defendants engaged in a scheme to pay commissions to title agents in violation of New York Insurance Law Section 6409(d), we are directed to no statute or regulation voiding the defendants’ filed rates such that this suit may survive a motion to dismiss,” the court stated.   The court also noted that the plaintiffs did not allege that the defendants failed to provide the information required in New York Insurance Law Section 6409(b), nor could they point to any disclosure obligation in the statutory proscription of commissions to title agents.   Next, the plaintiffs argued that the department had not adequately scrutinized the defendants’ rates. The court found this argument to have no merit.   “It is well established that the doctrine applies to all filed rates, not merely those rates investigated before their approval,” the court stated. “Further, we are skeptical that any relevant regulatory gap exists. While title insurance agents are excluded from the definition of ‘insurance agent’ in New York Insurance Law Section 2101(a)(4), the department clearly has authority over insurance rates.”   “Even if we were to conclude that the department lacked the expertise to determine the portion of title insurance rates attributable to alleged illegal commissions, we would be no more competent than the department to set title insurance rates, especially when, as here, the agency is charged with balancing a variety of statutory factors to determine their reasonableness.”   The plaintiffs also argued that they did not seek to alter filed rates, “but rather to enforce requirements of New York Insurance Law.” The court again disagreed.   In its opinion, the court looked to the Supreme Court’s decision in Reiter v. Cooper , a case brought under the Interstate Commerce Act (ICA) involving freight rates. In that case, the Supreme Court held that the filed rate doctrine does not preclude avoidance of the tariff rate through claims and defenses that are specifically accorded by the ICA itself. The court noted that while Reiter did not endorse an unreasonable rate defense “based on general language that a carrier’s rates must be reasonable,” it did allow shippers to assert the reparations rights explicitly conferred by the statute.  “We cannot conclude that New York Insurance Law gives the plaintiffs a similar right to attack the challenged filed rates based on the defendants’ alleged payment of commissions in violation of Section 6409(d),” the court stated. “That subsection bans the payment of commissions, but it does not confer on plaintiffs a private right of action. To the contrary, Section 6409(d) expressly provides that the remedy for any violation is a fine. Section 6409(b), thus, hardly permits plaintiffs to enforce the statutory ban on title agent commissions through an antitrust challenge to title insurance rates set by the department.”   The court then addressed the plaintiffs’ argument that there is a serious question as to whether the filed rate doctrine should ever be applied to New York ’s title insurance system. They contend that this is because New York title insurance regulation is not sufficiently pervasive and comprehensive. The court disagreed, noting that in other cases it has held that the doctrine applies to any filed rate, including rates filed with state agencies. “Here, New York title insurance rates are filed with the department. Moreover, we have said that the doctrine applies whenever either the nondiscrimination strand or the nonjusticiability strand underlying it is implicated by the cause of action the plaintiff seeks to pursue. The plaintiffs’ request to strip from the rates all prohibited and otherwise unauthorized costs effectively asks this court to set New York insurance rates. It is clear that the filed rate doctrine forbids us from doing so,” the court stated.   The plaintiffs lastly contended that the district court erred in dismissing their claims for injunctive relief. The court once again disagreed, noting that a plaintiff may sue for an injunction designed to put an end to the conspiracy, so long as that injunction does not enjoin operation under established rates. An injunction to remove particular costs from filed rates is exactly the sort of relief the doctrine bars, the court stated.   “Although the plaintiffs artfully characterize the requested injunction as one to prohibit concerted efforts, that does not permit their claim to escape application of the filed rate doctrine,” the court stated. “Plaintiffs’ proposed injunction does not seek to invalidate the New York law allowing insurers to discharge their filing obligations by using a designated rate services organization. Nor does it reference New York ’s statutory policy to authorize and regulate cooperative action among insurers. Plaintiffs merely seek lower title insurance rates, and those rates must be set by the department, not this court.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 16 Feb 2010 00:00:00 EST A2F54DC782814E6AB3DA92E3CD4B2294 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=388DAC30C2874C0CB1298537C3C15910 Under a recently adopted New York regulation, every insurance producer in the state must disclose their role in, and the compensation they receive from, an insurance transaction.   “This regulation will provide New Yorkers buying insurance with an important tool to use in making an informed decision,” said New York Insurance Superintendent James J. Wrynn in announcing the regulation. “Almost everyone buys insurance at some point, and in these difficult economic times, consumers should understand any incentives that may potentially affect the recommendations from their agents or brokers.”  The new regulation, Regulation No. 194, states that an insurance producer selling an insurance contract must disclose the following information to the purchaser orally or in prominent writing at or prior to the time of application for the insurance contract: A description of the insurance producer’s role in the sale; Whether the insurance producer will receive compensation from the selling insurer or other third party based in whole or in part on the insurance contract the producer sells; That the compensation paid to the insurance producer may vary depending on a number of factors, including the insurance contract and the insurer that the purchaser selects, the volume of business the producer provides to the insurer or the profitability of the insurance contracts that the producer provides to the insurer; and That the purchaser may obtain information about the compensation expected to be received by the producer based in whole or in part on the sale, and the compensation expected to be received based in whole or in part on any alternative quotes presented by the producer, by requesting such information from the producer.   If the purchaser requests more information about the producer’s compensation prior to the issuance of the insurance contract, the producer will have to disclose several additional pieces of information in prominent writing at or prior to the issuance contract.   The additional information includes: A description of the nature, amount and source of any compensation to be received by the producer or any parent, subsidiary or affiliate based in whole or in part on the sale; A description of any alternative quotes presented by the producer, including the coverage, premium and compensation that the insurance producer of any parent, subsidiary or affiliate would have received based in whole or in part on the sale of any such alternative coverage; A description of any material ownership interest the insurance producer or any parent, subsidiary or affiliate has in the insurer issuing the insurance contract or any parent, subsidiary or affiliate; A description of any material ownership interest the insurer issuing the insurance contract or any parent, subsidiary or affiliates has in the insurance producer or any parent, subsidiary or affiliate; and A statement whether the insurance producer is prohibited by law from altering the amount of compensation received from the insurer based in whole or in part on the sale.   Insurance producers will be prohibited from making statements to a purchaser contradicting the disclosures required by the new regulation or any other misleading or knowingly inaccurate statements about the role of the insurance producer in the sale or compensation.      They will be required to retain a copy of any written disclosure provided to the purchaser pursuant to the new regulation for at least three years after the disclosure is given, unless the insurance producer has a written agreement with the insurer that the insurer shall retain such a copy.   The regulation will be published in the Feb. 10 issue of the state register and will take effect Jan. 1, 2011. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 11 Feb 2010 00:00:00 EST 388DAC30C2874C0CB1298537C3C15910 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=5AEC94B2BA574D37A910AC195503EA09 The Court of Special Appeals of Maryland recently ruled in a lien priority dispute in which Chicago Title Insurance Co., for its own use and use of U.S. Bank National Association, filed suit against the property owner’s niece, who had obtained a judgment against the property owner. Chicago Title moved to enjoin the niece’s scheduled sheriff’s sale on the property and obtain judgment, declaring that its lien had priority over the niece’s judgment.   The case is: Chicago Title Insurance Co. f/u/o U.S. Bank National Association v. Mary B. (Court of Special Appeals of Maryland , No. 2219).    The property owner, Charles Lee Petr , owns a house in the Dundalk area of Baltimore County , Md. He is now a ward of the Maryland Department of Corrections, where he is serving a 20-year prison sentence for second-degree rate of his niece, Mary B. Mary B. sued Petr in a civil action for battery in the Circuit Court for Baltimore County . On May 11, 2007, she obtained a judgment for $2 million against him. Post-judgment, Mary B. sought and obtained a writ of execution and a sheriff’s sale on Petr’s property that was scheduled and advertised for Oct. 25, 2007.   On Oct. 18, 2007, Chicago Title, for its own use and for the use of Aegis Funding Corp., filed suit against Mary B. and Petr, seeking to enjoin the sheriff’s sale and obtain a judgment declaring it has a lien against the property that takes priority over Mary B.’s judgment.   Specifically, Chicago Title and Aegis maintained that Aegis held a deed of trust against the property securing a loan for $150,000. The loan had been disbursed and the note and deed of trust had been signed on July 15, 2005. Through inadvertence, the deed of trust was not recorded in the Land Records of Baltimore County until two years later, on Oct. 9, 2007, after the sheriff’s sale was advertised.   The trial court issued a preliminary injunction until after the resolution of the case, including all appeals. Mary B. then filed a third-party complaint against Aegis, asserting that she had brought the tort action against Petr after examining the land records and determining that there was no debt owed against the property.   It later became known by the parties that before the priority suit was filed, Aegis had filed a petition for bankruptcy under Chapter 11 of the bankruptcy code. On Dec. 17, 2007, Aegis assigned the deed of trust to U.S. Bank National Association. U.S. Bank National Association was substituted as a party in Aegis’s place by notice filed May 23, 2008.   Chicago Title and Mary B. each moved for summary judgment on the ground that the material facts were not in dispute and their lien had priority as a matter of statutory law. The court found that Mary B.’s judgment took priority over U.S. Bank National Association’s deed of trust. By order dated Sept. 26, 2008, the court granted Mary B.’s cross-motion for summary judgment and dissolved the preliminary injunction.   On appeal, Chicago Title and U.S. Bank National Association presented three questions that ultimately ask whether the circuit court erred in granting summary judgment for Mary B. and not granting summary judgment for them.   In her cross-appeal, Mary B. posed two questions concerning procedural rulings by the circuit court. First, she asked whether the court erred in ruling that the automatic stay provisions of the federal bankruptcy code applied to Aegis; and second, she asked whether the court erred in substituting U.S. Bank National Association in place of Aegis, instead of merely adding U.S. Bank National Association as a defendant.   Judge Deborah S. Eyler , speaking for the court, reversed the judgment of the circuit court and remanded the case to the circuit court for further proceedings.   In addressing Chicago Title and U.S. Bank National Association’s appeal, Eyler noted that under Section 3-201 of the Real Property Article of the Maryland Code the effective date of a deed is the date of delivery, and the date of delivery is presumed to be the date of the last acknowledgment, if any, or the date stated on the deed. Every deed, when recorded, takes effect from its effective date as against the grantor.   Chicago Title argued that the plain language of the statute means that the deed of trust, as recorded on Oct. 9, 2007, was effective as of July 15, 2005, and that Mary B. was a creditor of Petr. Therefore, the company argued that the deed of trust takes priority over the judgment. Mary B. countered, arguing that a judgment lien-holder is not merely a creditor within the meaning of RP section 3-201; rather, a judgment creditor who has become a lien-holder against the property takes priority over the holder of a deed of trust against the property that was signed before the judgment was entered.   “A deed that has been recorded, as the deed of trust was on Oct. 9, 2007, is effective from its effective date — here July 15, 2005 — as against ‘every creditor of the grantor (here Petr) with or without notice,’” Eyler said. “This language plainly means that a recorded deed of trust is effective against any creditor of the person who is granted the deed of trust as of the date the deed of trust was delivered, regardless of whether the creditor did or did not have notice of the deed of trust at any time. Giving these words their ordinary meaning, the deed of trust was effective against Mary B. from July 15, 2005, which is almost two years before the date her judgment was rendered, irrespective of whether she knew about the deed of trust.”   “We have found no support in Maryland law for Mary B.’s assertion that, as the holder of a judgment lien, she was not a creditor of Petr within the meaning of RP Section 3-201, and therefore as against the property her judgment occupied a judgment vis-à-vis the deed of trust,” Eyler said. “There are many kinds of creditors and RP Section 3-201 does not draw any distinction based upon what type of creditor a creditor is. Mary B. is a judgment creditor, who holds a lien against the property by virtue of her recorded judgment against Petr, and who has executed on the lien to the extent that the property was seized by the sheriff’s office and was about to be sold to satisfy in part her judgment against Petr. Nevertheless, she remains a creditor of Petr, and, therefore, the deed of trust is effective against her regardless of whether she knew of it at any time. ”    Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 09 Feb 2010 00:00:00 EST 5AEC94B2BA574D37A910AC195503EA09 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=41B8EF4BA68647568A5483E856DD2A01 Neighbors residing on a formerly unsevered tract of land sued one another due to a boundary dispute arising from a miscalculated boundary description of the divided tract. After the trial court weighed in, the parties appealed to the Court of Appeals of Kentucky . The case is: Tim Haag v. Kimberly D. Wilson, Benjamin H. Wilson and William H. Tingle Jr. (Court of Appeals of Kentucky , No. 2008-CA-001983). Tim Haag , Kimberly and Benjamin Wilson and William Tingle Jr. each own adjoining tracts of land located on Boyer Lane in Henry County, Ky. Each of their tracts was originally part of an undivided tract owned by Irvin and Wilma Slocum . Slocum sold a portion of the original tract to Kenneth Williams in 1975, who later conveyed the property to Haag. In 1989, Wilma Slocum conveyed a lot to her niece, Kimberly Wilson and her husband Benjamin Wilson. The remaining portion of the Slocum property was conveyed to Tingle in 1990.   The boundary dispute arose in 2002 when Haag voiced a concern that Tingle was encroaching on his property. In 2003, he hired Marty Bright to conduct a boundary survey. The survey showed that both the Wilsons and Tingle were encroaching on Haag’s property. Based on Bright’s survey, Haag brought suit against Tingle and the Wilsons in 2003. He argued that the Wilsons and Tingle were encroaching on his property and asked the trial court to determine the property line between the parties. In their answers, the Wilsons and Tingle asserted that the boundary description in Haag’s deed was the result of a mutual mistake between the Slocums and Williams. Consequently, they asked that Haag’s deed be reformed to reflect the property line as understood by the parties to that deed. In addition, they argued that the description in the Williams deed was ambiguous and should be reformed by parol evidence. They also asserted that they had acquired title to the disputed areas by agreed boundary or by adverse possession. Finally, the Wilsons argued that Haag should be equitably estopped from enforcing his boundary line because he failed to object to their construction of improvements in the disputed area.   The trial court appointed a master commissioner to hear evidence regarding the disputed property line. The commissioner found that the Wilsons and Tingle had not proven any agreed upon boundary or had not? adversely possessed the disputed area for the requisite period. The commissioner also found that the property description in the Williams/Haag deeds was not ambiguous and could be located with reasonable certainty based on the Bright survey. The commissioner concluded that Haag was not estopped to claim the boundary set out in his deed. The Wilsons and Tingle filed objections to the commissioner’s report and asked for a new trial. The trial court upheld the commissioner’s findings concerning the boundaries set out in the senior deed, as well as the commissioner’s legal conclusions concerning adverse possession and agreed boundary. In an order entered in July 2008, the trial court agreed with the commissioner that there was insufficient evidence to establish any agreed boundary between the parties, or that the Wilsons or Tingle had acquired title to the disputed areas by adverse possession. However, the trial court found that Tingle had proven a mutual mistake in the boundary description between Tingle and Haag’s tract. The trial court directed that the property line be reformed to reflect the understanding between the Slocums and Williams. The court also found Haag was equitably estopped to claim to the boundary set out in his deed because he remained silent when the Wilsons were building improvements on the disputed area.   The appellate court affirmed in part, reversed in part and remanded for additional proceedings. In their cross-appeal, the Wilsons and Tingle first argued that the trial court erred by finding that the property description in Haag’s deed is unambiguous. They point to Bright’s admissions that he had to modify the direction calls in order to fit the distance calls and acreage set out in the deed. They also noted that Bright’s boundary does not follow the edge of Boyer Lane as set out in the deed, but at some points it actually crosses the road. Based on these inconsistencies, the Wilsons and Tingle maintain that the deed description is ambiguous and thus subject to modification by parol evidence. Because the parties agree that the boundary description in Haag’s deed overlaps portions of the descriptions in the Wilsons ’ and Tingle’s deed, the appellate court found that the trial court correctly found that the boundary description in the senior title is controlling. The court also noted that because only Bright conducted a survey based on the description in the senior title, the trial court concluded that his survey and testimony was more relevant to determine the sufficiency of that description. The court found that although a strict reading of the distance calls would extend one line across Boyer Lane , the deviation would not affect the boundaries between any of the parties to this case. In addition, while other experts disagreed with Bright’s priorities in determining the boundaries, they agreed that he had applied generally accepted surveying practices and none of them testified that his deed description was ambiguous. “Therefore, the trial court did not clearly err by accepting the Bright survey,” the court stated. “Furthermore, since extrinsic evidence cannot be admitted to vary the terms of a written instrument in the absence of an ambiguous deed, the trial court did not err by declining to consider parol evidence to explain the boundary in the senior deed.”    The court then turned to the WIlsons ’ and Tingle’s argument that the trial court erred by rejecting their theories of agreed boundary and adverse possession. The court agreed with the trial court that neither of these doctrines is applicable. “In order for an agreed or conditional boundary line to be sustained in law, it must be shown that: there was a bona fide controversy between the owners at the time respecting the true location; the line claimed to have been agreed upon was marked; actual possession was taken in accordance with such agreement; or there was continuing acquiescence or mutual recognition by coterminous landowners for a considerable length of time,” the court stated. “As the trial court noted, there was no evidence of any dispute involving the location of the boundary line before 2002. And, while Kenneth Williams testified that Irvine Slocum walked off the boundaries in 1975, the trial court correctly noted that there was no evidence that Slocum and Williams intended this to be an oral agreement setting the boundary line.” “Likewise, title by adverse possession requires proof that the possession was hostile, under a claim of right, actual exclusive, continuous, open and notorious for a period of at least 15 years,” the court stated. “Here, neither the Wilsons nor Tingle held title to their respective tracts for more than 15 years before Haag raised a question about the boundaries.” The court noted that as a general rule, a grantor’s continued possession after conveying to a grantee is presumed to be permissive. The character of such possession will not change unless the grantor makes an express disclaimer of such relation and a notorious assertion of the title in himself. “In the absence of any such disclaimer by the Slocums, their continued possession of the disputed property cannot be considered as adverse to Williams.” The court then turned to Haag’s direct appeal. Haag first argued that the trial court erred by reforming the boundary between him and Tingle based on the mutual mistake between the Slocums and Williams. The court disagreed. “We agree with the trial court that there was evidence to establish that the Slocums and Williams made a mutual mistake in the boundary description,” the court stated. However, Kentucky courts have recognized that it would be inequitable to reform a deed on the ground of mutual mistake between an original grantor and grantee if a subsequent purchaser from the grantee was without notice of the mistake. In this case, there is no evidence that Haag would have had reason to know of the mistake.” Haag also argued that the trial court erred in finding that he was equitably estopped to claim the boundary against the Wilsons . The trial court ruled in favor of the Wilsons because Haag had remained silent while they made improvements to the disputed property. Haag contended that his silence was not sufficient to warrant application of the doctrine of equitable estoppel. The appellate court agreed with him, noting that in order to establish an equitable estoppel against one asserting title to real property, the party attempting to raise it must show an actual fraudulent representation, concealment or such negligence as will amount to a fraud in law. “There is no evidence that Haag made any representations to the Wilsons about the location of the boundary line,” the court stated. “Haag may have had suspicions about the location of the true boundary as early as 2000, but he did not know the true boundary until Bright completed his survey in 2003. And there is no evidence that Haag’s delay in obtaining the survey was unreasonable. Furthermore, Haag’s mere acquiescence to the construction is not sufficient to create an estoppel given the uncertainty about the boundary at that time.” The court did not leave the Wilsons without a remedy, however. “Although the Wilsons encroached onto Haag’s property, they did so under color of the property description in their deed and without knowledge of Haag’s claim,” the court stated. “In such cases, the trial court may fashion an equitable remedy to balance the rights of the parties.” Because this involves a question of fact, the court remanded the matter for additional proceedings to determine the appropriate remedy with respect to the Wilsons ’ property. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 04 Feb 2010 00:00:00 EST 41B8EF4BA68647568A5483E856DD2A01 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=897431934D6B4E4689EF393A431A13EC After much debate ensued in the last few weeks after Anne Arundel County, Md., decided to assess its recordation tax against the amount of debt forgiven as a result of a short sale as well as the amount paid by the buyer for the property, the Maryland Attorney General’s Office issued its opinion in a letter to a state representative.   The debate had gotten heated, with articles being written in The Baltimore Sun and the American Land Title Association even getting into the debate, arguing against assessing the recordation tax against a seller’s forgiven debt. Both sides of the debate awaited an opinion from Maryland Attorney General Douglas E. Ganlier’s Office.   That opinion came in the form of a letter to Delegate Shelia E. Hixon , who wrote seeking the attorney general’s advice. Assistant Attorney General Bonnie A. Kirkland responded, finding that while not expressly prohibited, it is the office’s view that the counties do not have the authority to include debt forgiven by the seller’s lender in calculating the consideration on which the recordation tax will be calculated.   “Under TP Section 12-103(a), ‘the tax rates under this section are applied to each $500 or fraction of $500 of consideration payable or the principle amount of debt secured for an instrument of writing. The consideration includes the amount of any mortgage or deed of trust assumed by the grantee. But the term ‘consideration’ is not defined in the statute,” Kirkland said.   She pointed out that Maryland common law does not provide support for the idea that debt forgiveness by a third-party should be considered consideration. In doing so, she looked to two appellate court decisions, Dean v. Pinder and Pritchett v.Kidwell.   “These cases together suggest that consideration might not be limited to what is stated on the deed, and both cases are still good law, but neither case addresses the issue of consideration in a short sale,” Kirkland said. “Indeed, the courts in both cases plainly regarded consideration as that flowing from a grantee to grantor, not that which is a part of a separate agreement between the grantor and a third party (the lender). Thus, it is my view that the case law provides no direct support for including debt forgiven by the seller’s lender as consideration in the transaction between the grantor (seller) and grantee (buyer).”      “By contrast, there is some statutory support for the view that debt assumed by the seller’s lender in a short sale is not taxable consideration,” she said. “That evidence is found in the second sentence of TP Section 12-103(a) and TP Section 12-104(a). While not structured as definitions, these provisions expressly include as consideration debt assumed by the grantee, but do not include debt forgiven or assumed by a party other than the grantee. In the case of a deed in lieu of foreclosure, the homeowner/seller is the grantor and his lender the grantee. … In a short sale, by contrast, the grantee is a buyer, not the seller’s lender. While the seller’s lender has an interest in the sale and plays a role in facilitating the sale, it is not an actual party to the transaction of conveying the property.”   Kirkland also pointed out “several practical concerns raised by the imposition of recordation taxes on the debt forgiven in a short sale real estate transaction that raise potential legal issues.” The first issue she pointed to is whether and to what extent the buyer and the buyer’s lender know that the sale is a short sale or whether there will be any forgiveness of debt. She said that many times the seller and his or her lender have not completed their negotiations on debt forgiveness. In those circumstances the buyer’s lender is still required to give the buyer a Good Faith Estimate of settlement charges that the buyer will be responsible for at settlement. Some of these charges, such as points, loan origination charges and transfer taxes, including recordation taxes, may not be increased at settlement. Therefore, “if an amount of debt forgiveness is not known before the buyer receives the final GFE, it will not be possible to assess the additional tax against the buyer.”      “Additionally, as the purchase price may not be enough to pay off all liens that may be on the property, the seller may enter into negotiations with several parties. If the forgiveness of debt by the lender is consideration for assessment of recordation tax, one could argue that a real estate agent’s reduction of a contractually required commission to facilitate the sale or a judgment creditor’s agreement to take less than due also be considered for that purpose,” she said.   She also pointed out that normally a county clerk will look at the paperwork presented for recording, i.e. the contract, the HUD-1 and the deed, to verify the consideration of the transaction. That is typically the extent of the clerk’s inquiry. “If short sales are taxed differently the clerk will be required to request additional documentation,” Kirkland said. “Because this is not set out by state law, it is likely that each clerk’s office would require different documentation to reflect the fact of a short sale and what, if any, debt has been or is to be forgiven. This would unreasonably complicate both the settlement and recording process." Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 02 Feb 2010 00:00:00 EST 897431934D6B4E4689EF393A431A13EC http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=C16578856CD946B494C48463A16B9BEA The National Association of Insurance Commissioners (NAIC) named its 2010 committee chairs and vice chairs. "This year's committee leadership is comprised of a dedicated team of individuals who reflect the diverse and proficient breadth of expertise in our membership," said Jane L. Cline , NAIC president and West Virginia insurance commissioner. "I look forward to working together with them on the many important strategic initiatives and issues facing us this year." NAIC leadership met earlier this month to make assignments based on each member's preferences, as well as requirements established by the NAIC's Bylaws. Committee assignments last one year. The 2010 NAIC committee leadership assignments include Michael T. McRaith, director of the Illinois Department of Insurance as the chair of the Property and Casualty Insurance Committee, which the Title Insurance Issues Task Force reports to. Scott H. Richardson, director of the South Carolina Department of Insurance, was named the committee’s vice chair. The NAIC also announced the tasks each committee will be responsible for taking on in 2010, broken down by each subdivision. According to the Committee Charges report, the Title Insurance Issues Task Force will: Study issues related to title insurers and title insurance producers, including the impact of current real estate settlement practices on policyholders, recognizing that typically, settlement providers, not policyholders, are the title entity’s customers. Complete a study on the ability to undertake a uniform data-collection system to capture title insurance premium and expense data that would allow for cross-jurisdiction premium comparisons. Report the results by the 2010 Spring National Meeting and make a recommendation to develop a nationwide title statistical plan. Study ways to improve consumers’ ability to comparison shop for title insurance. Report the results by the 2010 Summer National Meeting. Consider issues raised by consumer representatives and the April 2007 study by the U.S. Government Accountability Office. Consider ways to improve the solvency regulation of title insurers. Coordinate with the Financial Condition (E) Committee to determine the attributes of recent title insurance company financial failures and to identify property/casualty solvency requirements (e.g., risk-based capital) and early warning tools (e.g., IRIS ratios) not currently applied to title insurers and consider whether they should be introduced. Report the results by the 2010 Fall National Meeting. Investigate ways to mitigate the impact of insolvencies on policyholders, including whether to revive work on the 1992 draft of the Title Insurance Guaranty Fund Model Act. Consider the merits of promoting the use of blanket lenders’ policies and individual owners’ policies to replace policies issued by now-insolvent insurers. Report the results by the 2010 Fall National Meeting. Investigate ways to maintain and improve competitive title markets, including examining and evaluating the original purposes and current effectiveness of monoline title insurance laws. Report the results by the 2010 Fall National Meeting. Determine an appropriate format for communicating the various findings of the Task Force—such as writing a white paper, crafting best practice guidelines, or revising the Title Insurers Model Act (#628) and Title Insurance Agent Model Act (#230)—by the 2010 Fall National Meeting. Produce a draft document in the chosen format by the 2010 Fall National Meeting. Monitor the developments of the U.S. Department of Housing and Urban Development (HUD) proposed changes to its Real Estate Settlement Procedures Act (RESPA) and provide comments to HUD or to the U.S. Congress, if necessary. Respond to RESPA or HUD proposals by the due dates established by HUD. Monitor, facilitate and report on the HUD Collaborative Enforcement Group, which involves monthly conference calls between state insurance regulators and HUD on investigations. Consider whether or how to assist in combating mortgage fraud. Report the results by the 2010 Fall National Meeting. Study whether the title insurance industry is undertaking additional financial risks at the request of institutional lenders and owners. Study the issuance of mortgage impairment products by non-title insurers to determine whether they should be classified as title insurance. Study captive reinsurance arrangements that title insurers maintain and determine if they are legitimate reinsurance transactions or simply gimmicks to avoid the application of laws that would prohibit rebating and, if necessary, make recommendations for needed reform. Study affiliated business arrangements (ownership arrangements between and among settlement providers and title entities) to determine which types of arrangements are legitimate and which types of arrangements are “shams”; i.e., those structured mainly to capture referral business and provide kickbacks to settlement providers, and that do not perform essential core title services. Study the appropriateness of title insurance rates in light of the current competitive environment and, in particular, determine what constitutes appropriate justification for rates, determine the effect affiliated business arrangements should have on rates, and determine the feasibility of interactive rate comparisons among title entities to enhance competition. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 28 Jan 2010 00:00:00 EST C16578856CD946B494C48463A16B9BEA http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=A69D6778D9B946769902F03B612E4C16 Companion bills to amend the escrow laws in the state were debated last week in hearings of the Washington House Financial Institutions and Insurance Committee and the Washington Senate Financial Institutions, Housing and Insurance Committee. Both bills were introduced at the request of the Department of Financial Institutions. Among other things, the bills clarify the exemption from licensure requirements for attorneys and includes contract collection services in the definition of escrow. Under the bills, applicants for licensure as an escrow agent would have to pay the cost of fingerprinting, which is given to the Washington State Patrol and the Federal Bureau of Investigation.   The bills also prohibit escrow agents from employing people in specific positions who have been convicted of crimes involving dishonesty. They would be required to have a fidelity bond that covers corporate officers, owners, escrow officers and employees. This bond would have to be maintained until the balance in the escrow trust account is zero.   Both bills also gives the director of the DFI the authority to require licensees to pay restitution to an injured consumer. The DFI would also be able to take possession of an escrow business if the director finds that the licensee is conducting business in an unsafe and unsound manner.   The house version, HB 2564 , sponsored by Reps. Sharon Nelson , D-Maury Island; Maralyn Chase , D-Shoreline and Steve Kirby , D-Tacoma, was amended before it was debated by the committee. Among other things, the exemption from licensing requirements for attorneys was clarified. As amended, the exemption would only apply when no separate compensation or gain is received for escrow services, and the service is provided by the same legal entity as the law practice. An attorney who is principally engaged as an escrow agent, or holding himself or herself out to perform escrow services, would be required to be licensed. The subject matter that the examination is required to cover, and the requirement that the examination be given annually were deleted from the House version. Prohibited activities were also added to the house version of the bill. If passed, escrow agents would have to comply with the requirements of applicable federal or state laws. They would also be prohibited from collecting a fee for tracking unclaimed funds unless it is a bona fide out-of-pocket expense, or converting unclaimed funds for personal use.   The collection of payments and the performance of related services by a third party in connection with a loan secured by a lien on real or personal property was removed from the bill’s definition of escrow.   Speaking in support of the bill at the House committee hearing were Nelson, Deb Bortner of the Department of Financial Institutions and Tammie Warnke , Phil Dryden and Dee McComb , of the Escrow Association of Washington. They noted that the DFI had received numerous complaints in 2009 with over $1 million in lost client funds. They said that the bill allows the DFI to take over a company and keep running it so consumers can be properly protected. The DFI has also received numerous complaints against attorneys and the bill would clarify the DFI’s regulatory authority over those who principally serve as escrow agents. They also noted that the bill requires that in addition to the escrow agents already covered, owners also need to be covered by a fidelity bond. They said that most escrow companies already have this bond and those that do not are hoping this fidelity bond will be available. They indicated that support of that provision of the bill by the escrow industry is dependent on the fidelity bond being actually available.   Testifying in opposition of the bill were Warrant Tessler of Trust Accounting Center , Eric Johnson of Automatic Funds Transfer Services and Dennis Daugs of SeaTac Escrow Inc. They noted that the new definition for escrow provided in the bill covers businesses that perform contract collection services. They argued that these are very different from a traditional escrow company and should therefore not be included in the bill because it would require agents of these companies to take irrelevant training and examinations. They said that data processing services companies should also be excluded from the bill because it would be alien to the business structure of these companies. They suggested that if these companies do need to be regulated, the licensing requirements should be different.   Nine committee members voted to pass the bill while two members voted against it. Sens. Jean Berkey , D-City of Everett; Don Benton , R-Clark County and Rosa Franklin , D-Tacoma, sponsored the Senate version of the bill, SB 6405 . During the hearing, Bortner and Warnke again spoke in favor of the bill, citing many of the same statistics regarding escrow agency failure and fraud. They did, however, request that contract collection services be removed from the bill, suggesting that they had a better fit under a loan servicing bill and that any problems regarding fidelity bonds could be addressed in rulemaking. They also noted that in October, the 915 people on the DFI’s escrow division’s list-serve were notified of DFI’s legislative agenda and given the opportunity to participate in Webinars of the future escrow commission meetings that were held on the subject. They felt these discussions where very helpful in crafting the legislation.      Daugs again spoke against the adoption of the proposed legislation. One of his concerns was that requiring a fidelity bond would hurt small escrow businesses. He also said those exempted from the bill, such as title escrow companies, would get an unfair playing field in competitive pricing. He also said he felt stakeholders had not gotten an opportunity to voice their opinion about the bill.   Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 26 Jan 2010 00:00:00 EST A69D6778D9B946769902F03B612E4C16 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=E7FF0B019FC3496D81DD1033BFDFA376 After the failure of two local exchange firms in the past four years, legislation has been introduced in the General Assembly of Virginia to regulate the 1031 exchange industry in the state. The bill, HB 417 , was introduced by Del. G. Glenn Oder , R-Newport News.   The bill defines exchange facilitator as a person that “for a fee facilitates an exchange of like-kind property by entering into an agreement with a taxpayer by which the exchange facilitator acquires from the taxpayer the contractual rights to sell the taxpayer’s relinquished property located in the Commonwealth and transfer a replacement property to the taxpayer as a qualified intermediary as that term is defined under Treasury Regulation Section 1.1031(k)-1(g)(4), or enters into an agreement with a taxpayer to take title to a property located in the Commonwealth as an exchange accommodation titleholder, or enters into an agreement with a taxpayer to act as a qualified trustee or qualified escrow holder” or maintains an office in the Commonwealth for the purpose of soliciting business as an exchange facilitator.   A financial institution or any title insurance company, underwritten title company or escrow company that is merely acting as a depository for exchange funds or that is acting solely as a qualified escrow holder or qualified trustee and is not otherwise facilitating exchanges would not be considered an exchange facilitator.   Under the proposed legislation, an exchange facilitator would be required to: Maintain a policy of errors and omission insurance not less than $250,000 executed by an insurer authorized to do business in Virginia ; or Deposit an amount of cash or provide irrevocable letters of credit equivalent to the sum of not less than $250,000.   Every exchange facilitator would be required to hold all property related to the exchange client, including the exchange funds, other property and other consideration or instruments received by the exchange facilitator, on behalf of the client. An exchange facilitator would be prohibited from: Commingling exchange funds with the operating accounts of the exchange facilitator; or Lending or otherwise transferring exchange funds to any person or entity affiliated with or related to the exchange facilitator. This subsection would not apply to a transfer or loan made to a financial institution that is the parent of, or related to, the exchange facilitator, or to a transfer from an exchange facilitator to an exchange accommodation titleholder as required under the exchange contract.   Exchange funds would not be subject to execution or attachment on any claim against the exchange facilitator. An exchange facilitator would be prohibited from keeping any money in any financial institution under any name designating the money as belonging to an exchange client unless the money equitably belongs to the exchange client and was actually entrusted to the exchange facilitator by the exchange client.   A person who engages in the business of an exchange facilitator would be prohibited from committing any of the following acts: Making any material misrepresentations concerning any exchange facilitator transactions, which are intended to mislead another; Pursuing a continued course of misrepresentation, or making false statements through advertising or otherwise; Failing, within a reasonable time, to account for any moneys or property belonging to others that may be in the possession or under the control of the exchange facilitator; Engaging in any conduct constituting fraudulent or dishonest dealings; Commission by the exchange facilitator and, in the case of an entity, commission of its owners, officers, directors or employees of any crime involving fraud, misrepresentation, deceit, embezzlement, misappropriation of funds, robbery or other theft of property, except that commission of such crime by an officer, director or employee shall not be considered a violation hereunder if the employment or appointment of such officer, director or employee has been terminated and no clients of the exchange facilitator were harmed, or full restoration has been made to all harmed clients within a reasonable period of time; Material failure to fulfill its contractual duties to the exchange client to deliver property or funds to the exchange client unless such failure is due to circumstances beyond the control of the exchange facilitator; or Material violation of any of the provisions of the Exchange Facilitator Act.   In any action brought under the Exchange Facilitator Act, if the court finds that a person has willfully engaged in any act or practice in violation of the act, the attorney general, the attorneys for the Commonwealth or the attorneys for the county, city or town may recover for the Literary Fund, upon petition to the court, a civil penalty of not more than $2,500 per violation. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 21 Jan 2010 00:00:00 EST E7FF0B019FC3496D81DD1033BFDFA376 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=F25271C0FEE940C1AF6233C5BF9C0FE4 A district court judge in Alabama recently ruled in a dispute between an agent and its underwriter over who was to bear the loss for failing to find a recorded mortgage during a title search when the underwriting agreement was unclear. The case is: Stewart Title Guaranty Co. v. Southern Land Title Inc. ( U.S. District Court for the Southern District of Alabama, Southern Division, No.08-0568-WS-C). The dispute arose after Southern Land Title Inc. missed a recorded mortgage, resulting in issuance of a title policy without an exception for the mortgage and, according to Stewart Title Guaranty Co., a seven-figure loss under its policy.   The parties’ relationship is governed by a title insurance underwriting agreement executed in 1989.   In Section 5 of the agreement, Division of Loss and Expense, it states: On each loss under a title policy issued pursuant to this agreement not due to Southern Land Title’s [gross] negligence of fraud, Southern Land Title shall be liable to Stewart for the first $2,500 [$500] of such loss. On each such loss due to the fraud or intentional act or omission of Southern Land Title or its employees, representatives or agents, or due to the negligence thereof, Southern Land Title shall be liable to Stewart for the entire amount of such loss. Such losses include, but are not limited to: the failure of the title plant; failure to discover or report any instrument of record affecting title; violation of escrow instructions, failure to follow Stewart’s instructions and the failure to prepare a title policy in a manner that properly reflects any such instrument contained in the search of title. On each loss suffered by Stewart by reason of its insured closing letter issued pursuant to Clause 2E of the agreement, Southern Land Title shall be liable to Stewart for the entire amount of such loss. Stewart argued that this provision unambiguously makes Southern Land Title liable for its simple negligence in failing to note the recorded mortgage and that it is uncontroverted that Southern Land Title was negligent in this respect. In the alternative, should the court find the provision ambiguous, Stewart argued that uncontroverted parol evidence requires that the provision be construed to make Southern Land Title liable for simple negligence. Finally, Stewart argued that a loss in the amount of $1,272,402.64 is also uncontroverted. Southern Land Title asserted that the provision is ambiguous, but it argued that the ambiguity must be resolved in its favor using rules of contract interpretation, without resorting to extrinsic evidence. Southern Land Title continued that gross negligence is not at issue in this lawsuit, compelling judgment in its favor. District Court Judge William H. Steele dismissed Stewart’s motion for summary judgment and granted in part and denied in part Southern Land Title’s motion for summary judgment. Both parties appealed to Alabama law to construe the contract. Under Alabama law, a contractual provision is ambiguous if it is reasonably susceptible of more than one meaning.   “As a matter of law, the loss provision is ambiguous under this test,” Steele said. “Paragraph 5(a), as amended, provides that the defendant will pay the first $500 of a loss caused by simple negligence, while paragraph 5(b) states that the defendant will pay the entirety of a loss caused by simple negligence. As noted, the defendant concedes the provision is ambiguous. While the plaintiff argues that paragraph 5(b), standing alone, is unambiguous, the court must review the entire provision for ambiguity, not simply one portion of the provision.”   Steele went on to see if the antecedent questions whether the ambiguity can be resolved using rules of contract interpretation. Southern Land Title identifies two such rules. First, “typewritten provisions prevail over printed matter. This is a long-head presumption in the law, because typewritten provisions are thought to have commanded stricter attention than a standard for contract provision.” The same rule applies to handwritten terms.   “As applied here, the handwritten insertion of the adjective “gross” before “negligence” in paragraph 5(a) reflects that the parties deliberately sought to restrict the defendant’s unlimited liability to losses resulting from its gross negligence,” Steele said.   Second, “if there exists inconsistency between two clauses of a contract which cannot be reconciled, the inconsistency must be resolved in favor of the prior clause, unless an intention to thereafter qualify is plainly expressed.”   “As applied here, the defendant’s unlimited liability is restricted to gross negligence in paragraph 5(a), before it is extended to simple negligence in paragraph 5(b), and 5(b) contains no plainly expressed intent to qualify the gross negligence limitation of 5(a),” Steele said.   “These rules are adequate to resolve the apparent conflict between the provisions and eliminate all ambiguity,” he said. “By deliberately inserting the qualifier “gross” in paragraph 5(a), the parties unequivocally restricted the defendant’s unlimited liability to losses resulting from gross negligence. That they failed to make a similar change in paragraph 5(b) is immaterial because their intention was clearly and immediately expressed in the preceding sub-paragraph.” Southern Land Title also argued that Stewart “does not content that was alleged against Southern Land Title constitutes gross negligence.” Steele found that Southern Land Title failed to explain or support its position. He noted that the company uses unclear testimony and depositions to make its argument before changing tacks in its reply brief. In its reply brief, Southern Land Title argued for the first time that there is no issue of gross negligence raised in the complaint and that Stewart’s witnesses admit there are no facts to show gross negligence.   “District courts, including this one, ordinarily do not consider arguments raised for the first time on reply,” Steele said. “Because the defendant offers no reason to depart from this rule, its tardy argument will not be considered.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 19 Jan 2010 00:00:00 EST F25271C0FEE940C1AF6233C5BF9C0FE4 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=CF9AD36E4ECF4601B4477B68B3582641 A U.S. District Court judge in Mississippi recently handed down judgment in a breach of contract suit between a national underwriter and an attorney-agent, whose work the underwriter claimed resulted in numerous claims against the company. The underwriter also claimed the agent failed to submit premiums to the company. The case is: Stewart Title Guaranty Co. v. J. Allen Derivaux Jr. ( U.S. District Court for the Southern District of Mississippi, Western Division, No. 5:07-CV-199).    Stewart Title Guaranty Co. brought the breach of contract suit against J. Allen Derivaux Jr. , an attorney who issued commitments and/or title insurance policies for Stewart pursuant to a retainer agreement. According to Stewart, Derivaux committed errors in a number of commitments and policies he issued, resulting in numerous claims against Stewart as the title insurer. Further, Stewart claims that Derivaux failed to submit commitment and policy premiums to the company, and failed to turn over policy jackets to the company. Each party moved for summary judgment. In its motion for summary judgment, Stewart sought a judgment of liability against Derivaux for breach of contract, breach of fiduciary duties as Stewart’s agent, breach of duties of care, loyalty and contract as Stewart’s attorney, negligence, gross negligence and malicious and reckless disregard. Stewart sought a judgment as a matter of law for damages on its indemnification claim pursuant to the retainer agreement between the parties. Stewart also sought extra-contractual damages, punitive damages and attorney fees for Derivaux’s alleged gross negligence and malicious and reckless disregard. U.S. District Court judge David Bramlette , denied Stewart’s motion for summary judgment. He also granted in part and denied in part Derivaux’s motion for partial summary judgment. Derivaux’s motion was granted as to any claim by Stewart for declaratory relief on claims that are not the subject of the litigation; granted as to Stewart’s claim for extra-contractual damages, punitive damages and associated attorney fees; and denied as to all other relief requested in Derivaux’s motion. In his response to Stewart’s motion for summary judgment, and in his own motion for partial summary judgment, Derivaux argued that Stewart’s claims for breach of contract, breach of fiduciary duties and negligence are barred by Mississippi ’s three year statue of limitations pursuant to Miss.Code Ann. Section 15-1-49. Derivaux contended that the limitations period should commence on July 21, 2003, the date his agency and attorney-client relationship with Stewart, by virtue of the retainer agreement, was terminated. Stewart, on the other hand, contended that it did not learn of its causes of action and specific claims until later, when claims were made against it based on Derivaux’s errors. “Because there are genuine issues of material fact concerning the date that each particular claim accrued for statute of limitations purposes, neither party is entitled to summary judgment,” Bramlette said. Stewart also sought summary judgment as to liability on its indemnification claim for curative fees, curative costs and settlement costs associated with title claims resulting from Derivaux’s work. In support of its motion, Stewart submitted Derivaux’s deposition testimony. In that testimony, Derivaux admitted that he “screwed up a bunch of these closings in one way or another.” Further, Derivaux’s expert conceded that “Derivaux did not follow the underwriting requirements that he was required to do to complete the transaction and issue the policy.” However, Bramlette said that because the evidence was not connected to any particular claim, he could not render judgment. “Although Derivaux admits some culpability, the evidence presented by the plaintiff is not connected to any particular claim; therefore, for lack of specificity, the court cannot render judgment as a matter of law,” Bramlette said.   Stewart also sought summary judgment in the amount of $202,493.51 on the indemnification claim. Bramlette found that because Derivaux contested the reasonableness of the charges, there was a genuine issue of material fact and denied summary judgment. Derivaux argued in his response and in his motion for partial summary judgment that Stewart’s claims for extra-contractual damages, punitive damages and associated attorney fees were not pled according to Federal Rule of Civil Procedure 8. Bramlette noted that Rule 8(a) requires that a complaint give “notice of the circumstances which give rise to the claim,” and “sufficient information to outline the elements of the plaintiff’s claim or to permit inferences to be drawn that these elements exist. Derivaux pointed out that Stewart’s amended complaint, initial disclosures and discovery responses failed to allege that Derivaux was grossly negligent or that he acted with malice, and failed to mention any claims for extra-contractual damages, punitive damages and associated attorney fees. Furthermore, Derivaux stated that he was not aware Stewart intended to assert a claim for punitive/extra-contractual damages until Stewart filed its motion for summary judgment. Stewart responded that the “voluminous amount of claims, conversion of personal property and premiums, etc.” pled in its complaint and amended complaint entitled it to extra-contractual and punitive damages. Bramlette disagreed with Stewart’s argument.   “Although the plaintiff is not required to expressly use the term ‘punitive damages’ or to cite the statue under which punitive damages are sought in order to satisfy the requirements of Rule 8(a), the plaintiff must plead facts sufficient to put the defendant on notice that it seeks punitive damages, e.g., by alleging that the defendant acted with malicious intent or reckless indifference,” Bramlette said. “The court finds that the plaintiff’s pleadings failed to comply with Rule 8(a) in that they did not put the defendant on notice that Stewart was seeking extra-contractual damages, punitive damages and associated attorney fees. Therefore, the plaintiff’s motion for summary judgment shall be denied and the defendant’s motion for partial summary judgment granted.”      Derivaux’s motion for partial summary judgment also sought a ruling that Stewart is not entitled to declaratory relief on claims that are not the subject of this litigation. Stewart conceded Derivaux’s argument. Therefore, Bramlette granted summary judgment on this claim.   Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 14 Jan 2010 00:00:00 EST CF9AD36E4ECF4601B4477B68B3582641 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=45F47EAADFF548B08A4EBC3ACE5A0CBB Acting U.S. Attorney Robert S. Cessar announced Jan. 8, 2010, that Robert Danenberg , a resident of Pittsburgh , Pa. , pleaded guilty in federal court to a charge of Wire Fraud Conspiracy in connection with a mortgage fraud scheme. Danenberg, 45, pleaded guilty to one count before U.S. District Judge Donetta Ambrose . In connection with the guilty plea, Assistant United States Attorney Brendan T. Conway advised the court that Danenberg is an attorney who specialized in closing real estate transactions. He participated in a mortgage fraud conspiracy in which a co-conspirator recruited buyers to purchase properties at fraudulently elevated prices and financed through fraudulently obtained loans.  Danenberg's role in the conspiracy was to close the fraudulent loans. The closings themselves were fraudulent in two primary respects. First, the closings required the borrowers to bring their own certified funds to the closings to make the down payments associated with the purchase. The borrowers, however, did not have sufficient funds to make the down payments and were often getting cash back at the closings. The down payments were paid by the sellers, the mortgage broker, and on several occasions, by Danenberg himself. The closings were also fraudulent in that the settlement statements reflected payments to contractors for work purportedly already done on the properties serving as collateral for the loans. In fact, however, as Danenberg well knew, those payments were kickbacks to participants in the conspiracy. In total, Danenberg closed approximately 70 fraudulent loans totaling in excess of $5,000,000 of loan proceeds. Danenberg pleaded guilty after four days of trial.  Judge Ambrose scheduled sentencing for May 7, 2010. The law provides for a total sentence of 20 years in prison, a fine of $250,000, or both. As part of his plea agreement, Danenberg agreed to forfeit another $250,000. Under the Federal Sentencing Guidelines, the actual sentence imposed is based upon the seriousness of the offense and the criminal history, if any, of the defendant.  The Mortgage Fraud Task Force conducted the investigation that led to the prosecution of Danenberg. The Mortgage Fraud Task Force is comprised of investigators from federal, state and local law enforcement agencies and others involved in the mortgage industry. Federal law enforcement agencies participating in the Mortgage Task Force include the United States Secret Service; Federal Bureau of Investigation; the Internal Revenue Service, Criminal Investigation; the United States Department of Housing and Urban Development, Office of Inspector General; and the United States Postal Inspection Service. Other Mortgage Fraud Task Force members include the Allegheny County Sheriff's Office; the Pennsylvania Attorney General's Office, Bureau of Consumer Protection; the Pennsylvania Department of Banking; the Pennsylvania Department of State, Bureau of Enforcement and Investigation; and the United States Trustee's Office. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 12 Jan 2010 00:00:00 EST 45F47EAADFF548B08A4EBC3ACE5A0CBB http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=DD9F2F94502D40D7922C881BE71B357A Banks that were targeted in an alleged fraud scheme by a Mississippi title company have requested that a federal bankruptcy court be able to review the company’s internal audits to see how and when the crimes began. State banks fought Mississippi Valley Title Insurance Co. (MVT) in the court on Dec. 30, 2009, reported the Mississippi Business Journal . The news is the most recent in the case that has captured the attention of the industry inside Mississippi and well outside of it, too. Now the banks want to know how MVT’s approved attorney, Charles Evans Jr. , was allegedly issuing fraudulent certificates of title in a commercial real estate scheme that totaled more than $40 million in damages and began in 2003, the newspaper reported. MVT originally filed suit against Evans’ brother, Chris Evans , accusing him of obtaining fraudulent funds from more than 30 banks in Mississippi, alleging that he would use one company to purchase a large piece of commercial real estate and then use one of many limited liability companies he owned to obtain a mortgage to buy a smaller piece of that same land. Charles Evans then would issue title insurance for those loans. The other companies, however, never actually owned the land, according to background provided by a blog on Jackson Jumbalaya , which has covered the case extensively since it began. Allegedly, more than 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies did not own. As Chris Evans’ companies defaulted on those loans, the banks took note and realized they would be competing against each other for collection on the properties, the Mississippi Business Journal reported. Chris Evans filed Chapter 7 bankruptcy on October 26, 2009, which took the original civil case into federal bankruptcy court. More than $40 million in claims have been filed with MVT, which reports show has only $30 million in claims reserves available. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 07 Jan 2010 00:00:00 EST DD9F2F94502D40D7922C881BE71B357A http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=E5AAA69CF99B41BFACEFC7186F26BA54 On Dec. 28, 2009, a Monmouth County Grand Jury returned a seven count indictment charging Rebecca Marchese-DePeri-Grande , 37, of Jackson Township, N.J. and her sister, Meredith Miller , 34, of Brick Township, N.J. with second degree Conspiracy, second degree Misapplication of Entrusted Property, second degree Theft by Failure to Make Required Disposition of Property Received, and second degree Misconduct by a Corporate Official. The indictment also charges Miller with one count each of third and fourth degree Bad Checks, and one count of third degree Theft by Deception.  Following the return of the indictment, Marchese-DePeri-Grande and Miller were arrested by detectives from the Monmouth County Prosecutor’s Office. The Jackson Township , Brick Township and South Brunswick police departments also assisted in the arrests. Following the arrests, Monmouth County Superior Court Judge Ira E. Kreizman set bail for Marchese-DePeri-Grande and Miller at $150,000 each.  The indictment follows an investigation which was conducted by the Monmouth County Prosecutor’s Office. The investigation was initiated in 2005 after numerous individuals complained to law enforcement authorities that after they had refinanced their homes, disbursements which were to have been made to the homeowners’ creditors by Marchese-DePeri-Grande’s and Miller’s title agencies were not made. The victims learned that the disbursements had not been made when they began receiving late notices from the creditors. In addition, some of the victims were served with foreclosure complaints as a result of Marchese-DePeri-Grande’s and Miller’s failure to have paid off earlier mortgages.  The investigation revealed that initially, Marchese-DePeri-Grande was the owner of R.M.J. Title Agency located in Freehold, N.J., and Miller was an employee there. In the Fall of 2004, Marchese-DePeri-Grande and Miller formed Spectrum Title Agency, also in Freehold, N.J., as co-owners. The investigation determined that after the victims obtained loans with the banks, the banks entered into agreements with R.M.J. and/or Spectrum regarding disbursement to the various escrow accounts for payments in accordance with the closing procedures set forth in the HUD-1 forms. Instead of making the required disbursements, Marchese-DePeri-Grande and Miller failed to remit the deposited funds to the proper entity or individual and instead unlawfully transferred the funds from their escrow accounts into their own business accounts. Marchese-DePeri-Grande and Miller then utilized the stolen funds for personal expenses. The personal expenses which the stolen funds were used to pay for included high-end vehicles such as Ferraris, lavish homes and travel for Marchese-DePeri-Grande and Miller. The total amount of the theft is approximately $786,152.62. In addition, Marchese-DePeri-Grande and Miller failed to file required documents with the County Clerk ’s Office in connection with the refinanced mortgages.  Miller’s charges of Bad Checks and Theft by Deception relate to her issuance of checks on behalf of her clients which were returned for insufficient funds and her failure to pay the lease for Spectrum’s office space.  As title agents, Marchese-DePeri-Grande’s and Miller’s responsibilities included the preparation of closing statements, payment of mortgages and other liens, government charges, taxes and other expenses, disbursement of funds, and the preparation, execution and recordation of all necessary legal documents. From November 2002 through March 2005, Marchese-DePeri-Grande and Miller failed to perform these duties with respect to fifteen of their clients.  The New Jersey Department of Banking and Insurance opened a parallel investigation in 2005 which remains open. R.M.J. Title Agency and Spectrum Title Agency ceased doing business shortly after the customer complaints were made in 2005. According to the New Jersey Department of Banking and Insurance, the license for R.M.J. Title Agency became inactive on Jan. 31, 2007, and Spectrum Title Agency’s license became inactive on April 30, 2008. Marchese-DePeri-Grande’s and Miller’s individual licenses became inactive on Oct. 3, 2005, and April 30, 2008, respectively.  If convicted of any of the second degree crimes, the maximum potential custodial sentence is a State Prison term of up to 10 years. If convicted of any of the third degree crimes, the maximum potential custodial sentence is a State Prison term of up to five years. The maximum potential custodial sentence for a fourth degree crime is a term of up to 18 months. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 05 Jan 2010 00:00:00 EST E5AAA69CF99B41BFACEFC7186F26BA54 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=F3C558473C1145D29F85BC962961A4FE The Senate Banking Committee approved the nomination of Ben Bernanke to continue as chairman of the Board of Governors of the Federal Reserve System on a vote of 16 to 7.  President Obama announced Bernanke’s reappointment on August 25.  The nomination will now be sent to the full Senate for consideration.     “As I have said, I will vote to pass that nomination out of this committee and to the full Senate,” said Sen. Chris Dodd , D-Conn., chairman of the Senate Banking Committee.  “Some of the criticisms of the Fed under Chairman Bernanke that have been voiced during this confirmation process have merit.” “As I said at our last meeting on this topic, leading up to the crisis the Fed failed in its oversight and consumer protection responsibilities, allowing some of the largest holding companies to engage in very dangerous risk-taking and allowing much of the damage caused by those actions to fall on ordinary Americans.  This was reflected in lost jobs, lost homes, lost retirement, and a lost sense of hope that many have felt that you can’t put a dollar sign on but that has affected our country and our citizenry very profoundly.”  “However, I believe that Chairman Bernanke must also receive credit for the critical role he played in the events of last fall.  And while the judgment of many is still out on that, I happen to believe that had he and others not acted at a time of critical importance to our country we would be looking at a far more dire situation than is the case.”  The Committee also approved three other nominees including Eric Hirschhorn , to be Undersecretary for Export Administration, U.S. Department of Commerce; Marisa Lago , to be Assistant Secretary for International Markets and Development U.S. Department of the Treasury; and Steven Jacques , to be Assistant Secretary for Public Affairs U.S. Department of Housing and Urban Development.  For more information about Bernanke’s nomination hearing, click here . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 22 Dec 2009 00:00:00 EST F3C558473C1145D29F85BC962961A4FE http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=759D7E7024D94184A299AB384118714B Recording fees in California are set to increase by as much as $6 when a bill passed this session goes into effect.   The bill, SB 676 , which also includes several other provisions for recorders, was passed in October. Under existing law, county recorders in each county are authorized to charge a $4 fee for the first page and $3 for each additional page for recording an indexing every instrument, paper or notice required or permitted to be recorded. The bill increases the maximum fee for the first page to $10. The bill also makes other conforming changes. If the printing on the printed forms is spaced more than nine lines per vertical inch or more than 22 characters and spaces per inch measured horizontally for three increase or more in one sentence, the recorder will charge $1 extra for each page or sheet on which printing appears. If a page or sheet does not conform with the dimensions described in subdivision (a) of Section 27361.5, the recorder will charge $3 extra per page or sheet of the document. The finds generated by the extra charge will be available to support, maintain, improve and provide for the full operation for modernized creation, retention and retrieval of information in each county’s system of recorded documents. One dollar of each $3 fee for each additional page will be deposited into the county general fund. One dollar for recording the first page and one dollar for each additional page will be available solely to support, maintain, improve and provide for the full operation for modernized creation, retention and retrieval of information in each county’s system of recorded documents. County recorders will also be able to charge a $1 fee for recording the first page of every instrument, paper or notice recorded, as authorized by each county’s board of supervisors. The funds generated by this fee shall be used only by the county recorder collecting the fee for the purpose of implementing a social security number truncation program pursuant to Article 3.5. County recorders will be required to stop charging the $1 fee after Dec. 31, 2017, unless the county recorder has received reauthorization by the county’s board of supervisors. County recorders may not seek reauthorization of the fee by the board before June 1, 2017 or after Dec. 31, 2017. County boards of supervisors will require county auditors to conduct two reviews to verify that the funds generated by this fee are used only for the purpose of the program described in Article 3.5. The California Land Title Association has noted that the maximum charge has not changed since 1985. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 17 Dec 2009 00:00:00 EST 759D7E7024D94184A299AB384118714B http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=CEF5FED724124CE39DABEFA121CE8372 Once again, Florida Sen. Michael Bennett , R-Brandenton, has filed legislation that would bring sweeping changes to industry members in the state. The bill, SB 260 , would establish a ‘file and use’ rate-setting system an entirely new pricing system for Florida title agents that would eliminate the need for a premium split between agents and underwriters. SB 260 is similar to a bill that was introduced and ultimately died in committee last year, SB 444. The bill was filed as the Florida Title Insurance Study Advisory Council was completing its report offering recommendations for improving the regulation of title insurance in the state. No more premium split Under the proposed legislation, title insurance agents would be prohibited from receiving a portion of the title insurance premium. Instead they would be authorized to charge a reasonable fee for primary title services, title searches and closing services actually performed by the agent or agency. Agents would be required to file with the Office of Insurance Regulation (OIR) the amount of each charge, including the components thereof, together with related information as required by the office on a form adopted by the office. The OIR would then publish the information collected from agents or agencies via the Internet or otherwise “as the office deems sufficient to apprise the public of costs for these services among the various agents or agencies.” Premium, redefined The bill also seeks to redefine “premium” under Florida law in connection with title insurance rates. Under the proposed legislation, premium would be defined as “the charge, made by a title insurer for a title insurance policy, endorsement, commitment or other contract for incurring the risks incident to the policy, endorsement, commitment or other contract under the several classifications of title insurance contract and forms, and upon which charge a premium tax is paid under s. 624.509.” The definition does not include a commission “or any other reimbursement for primary title services, title searches, closing services, or any component thereof performed by a title insurer, title insurance agent or agency.” The premium would be calculated by multiplying the approved rate by each $1,000 of title insurance limits provided. ‘File and Use’ If the bill is passed, each title insurer would be required to make an annual filing with OIR demonstrating that the rate is actuarially sound. The filing requirements would be satisfied one of two ways: A rate filing prepared by an actuary containing documentation demonstrating that the proposed rates are not excessive, inadequate or unfairly discriminatory pursuant to applicable rating laws and rules of the commission. If no rate change is proposed, a filing consisting of a certification by an actuary that the existing rate is actuarially sound and not excessive, inadequate or unfairly discriminatory. Upon receipt of a rate filing, OIR would review the rate filing to determine if the rate is excessive, inadequate or unfairly discriminatory. In making its determination, the office would look at several factors, including: each title insurer’s loss experience and prospective loss experience within and without the state; liability for defalcation; the degree of competition among insurers for the risk insured; the adequacy of loss reserves; and the cost of reinsurance. The OIR would find the rates to be excessive, inadequate or unfairly discriminatory if: They are likely to produce a profit from Florida business that is unreasonably high in relation to the risk involved in the class of business or if expenses are unreasonably high in relation to services rendered; The rate structure established by a title insurer provides for replenishment of surpluses from premiums if the replenishment is necessitated by investment losses; or The rates and the investment income attributable to them are clearly insufficient to sustain projected losses and expenses in the class of business to which they apply. If an insurer fails to meet filing requirements established by SB 260, and does not submit a filing within 60 days following the date on which the filing is due, the office would be permitted to, in addition to any other penalty authorized by law, order the insurer to discontinue the issuance of policies for which the required filing was not made until such time that the office determines the required filing has been submitted properly.  Tue, 15 Dec 2009 00:00:00 EST CEF5FED724124CE39DABEFA121CE8372 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=83C451F83B3C4880B6195555118DCBAA There is little time left between now and the Jan. 1, 2010, deadline for implementation of the RESPA final rule. The settlement services and lending communities have been rocked by these changes, and many unanswered questions on how to use the new Good Faith Estimate (GFE) and HUD-1 Settlement Statement forms remain. In an effort to lend a helping hand to the industries it serves, October Research Corp. is partnering with financial services advisory firm The Collingwood Group LLC and its team of Washington experts. Together, the companies will offer an alternative to bird’s eye-level training programs and offer Webinars that provide line-by-line explanations of the forms, how to use them and how they will change business practices. If you’re tired of one-hour sessions that only skim the surface of how this RESPA reform will change the industry as we know it, these Webinars are not to be missed. The two-part “RESPA 2010 Webinar Series: Questions Answered” will feature:  An introduction from Brian Montgomery , managing director of The Collingwood Group and former U.S. Department of Housing and Urban Development (HUD) assistant secretary for housing — Federal Housing Administration (FHA) commissioner, who oversaw and directed the development and publication of the rule; An explanation of the key issues addressed by the rule and insight into the deliberations and decisions that surrounded it by Gary Cunningham , principal with The Collingwood Group and former deputy assistant secretary for regulatory affairs at HUD, who led HUD’s efforts to develop the rule, GFE and HUD-1; and A line-by-line training on the forms by must-have RESPA compliance trainer Christopher Cruise , national marketing director for 1st National Title LLC.  In two individual sessions, lenders, loan officers, mortgage brokers, title agents, attorneys, Realtors, settlement services providers and anyone else who needs to understand the new GFE and HUD-1 forms will benefit from in-depth training as well as an extensive Q&A period.  “I have been studying and teaching RESPA for almost 20 years and this year has been one of the most exciting ever,” Cruise said. “The information that attendees will get from this Webinar will be down-to-earth, line-by-line and authoritative. I know the final rule, know the FAQs and know the forms. You’ll leave this Webinar absolutely confident in your ability to sell more loans using the new GFE and HUD-1.”  The first part of the series, which will focus on the GFE form, will be held from 1 to 3:30 p.m. EST on Tuesday, Dec. 15. The second part of the series, which will focus on the HUD-1 form, will be held from 1 to 3 p.m. EST on Thursday, Dec. 17. The price for each Webinar is $149 or $275 for a combination of the two. The events will be produced by October Seminars and hosted by RESPA News and its sister publication The Title Report .   More information regarding the series and registration for it is available at www.OctoberStore.com , or contact Jennifer Cannon , senior account representative at October Research, at jcannon@octoberresearch.com or 330-659-6101, ext. 7221.  The Collingwood Group is a senior team of seasoned financial services executives providing business advisory services to boards of directors and executives of firms in the financial services industry. The firm provides clients with extraordinary insights and capabilities in the world of federal departments, agencies, GSEs, trade groups, news media and all those constituencies that make Washington , D.C. , a uniquely challenging business environment.  Richfield, Ohio-based October Research is the nation’s leading provider of market intelligence, business news and state-by-state legal and regulatory information for the real estate services industry. Newsletters published by October Research include: The Title Report, The Legal Description, Valuation Review, RESPA News and Real Estate Insider . Thu, 10 Dec 2009 00:00:00 EST 83C451F83B3C4880B6195555118DCBAA http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=E3284703C8954C1DA3801BB3A0E05C6E During the Winter National Meeting, members of the National Association of Insurance Commissioners (NAIC) elected its 2010 officers. The 2010 officers are: President: West Virginia Insurance Commissioner Jane Cline President-Elect: Iowa Insurance Commissioner Susan Voss Vice President: Florida Insurance Commissioner Kevin McCarty Secretary-Treasurer: Oklahoma Insurance Commissioner Kim Holland The newly elected officers will assume their duties following the completion of the Winter National Meeting. Cline was appointed West Virginia Insurance Commissioner in 2001. Prior to her appointment as commissioner, Cline operated a government consulting firm, Jane L. Cline & Associates. Before that, Cline served as commissioner of the West Virginia Division of Motor Vehicles (DMV) and as deputy commissioner of the West Virginia Division of Highways. Cline earned a bachelor's degree in business administration from West Virginia University and an MBA from the University of West Virginia College of Graduate Studies. Voss was appointed Iowa Insurance Commissioner in 2005. Prior to her appointment as commissioner, she served as Iowa 's first deputy commissioner. Voss has held a number of different positions with state government, including assistant attorney general for the Iowa Department of Transportation, legal counsel to the state ombudsman, counsel to the Iowa Legislature in the area of taxation and economic development, and tax policy attorney for the Iowa Department of Revenue and Finance. She is a graduate of Simpson College in Indianola , Iowa , and earned a J.D. from Gonzaga University in Spokane , Wash. McCarty is the Commissioner of the Florida Office of Insurance Regulation. McCarty became Florida 's first appointed insurance commissioner in January 2003. He is responsible for Florida 's insurance market, with oversight of company solvency, policy forms and rates, market investigations and new insurance business. McCarty began his career in public service in 1988, becoming an expert in workers' compensation issues with the Florida Department of Labor and Employment Security. McCarty earned a bachelor's degree in political science and a J.D. from the University of Florida . Holland became the first woman to be elected Oklahoma Insurance Commissioner in 2006. A business woman and active civic volunteer before becoming insurance commissioner, Holland is a former board member of the Oklahoma Health Care Authority and the Oklahoma State Employees Benefits Council. Commissioner Holland is the recipient of the statewide 2007 Public Service Champion of Health, which recognizes her contributions to reducing uninsured in our state. NAIC members also elected 2010 zone officers during the Winter National Meeting. The newly elected zone officers will assume their duties following the completion of the national meeting. For the Midwestern Zone, members elected:   Michael McRaith  - Chair, Illinois Director of Insurance Merle Scheiber  - Vice Chair, South Dakota Insurance Director Mary Jo Hudson  - Secretary, Ohio Insurance Director For the Northeastern Zone, members elected: Thomas Sullivan  - Chair, Connecticut Insurance Commissioner Joel Ario  - Vice Chair, Pennsylvania Insurance Commissioner Paulette Thabault  - Secretary, Vermont Insurance Commissioner For the Southeastern Zone, members elected: Scott Richardson  - Chair, South Carolina Insurance Director Leslie Newman  - Vice Chair, Tennessee Insurance Commissioner Jim Donelon  - Secretary, Louisiana Insurance Commissioner For the Western Zone, members elected: Linda Hall  - Chair, Alaska Insurance Director Mo Chavez  - Vice Chair, New Mexico Insurance Superintendent Christina Urias  - Secretary, Arizona Insurance Director Thu, 10 Dec 2009 00:00:00 EST E3284703C8954C1DA3801BB3A0E05C6E http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=75C7D387FE774B0789CDFFFC99B3012E The Senate Committee on Banking, Housing and Urban Affairs convened on Dec. 3 for a confirmation hearing that discussed whether Ben Bernanke will continue serving as chairman of the Board of Governors of the Federal Reserve System. During the hearing, which entailed four hours of questioning, Sen. Christopher Dodd , D-Conn., chairman of the committee, said he supports Bernanke’s appointment. “Under your leadership, Mr. Chairman, the Federal Reserve has taken extraordinary actions to right the economy,” Dodd said. “I intend to vote to support your nomination in this committee and on the floor of the United States Senate, because I believe that you are the right leader for this moment in our nation’s economic history, and I believe your reappointment sends the right signal to the markets.” Dodd noted to Bernanke that although he is congratulatory of the efforts he’s made as chair, he still remains concerned about the weaknesses in the overall financial regulatory system. “You and I agree that the Federal Reserve should be strong, and very independent, and able to perform its core functions… I worry that over the years, loading up the Federal Reserve with too many piecemeal responsibilities has left important duties without proper attention and exposed the Fed to dangerous politicization that threatens the very independence of this institution,” he said.  In his remarks, Dodd said the questions to be answered during the hearing are: “Should Ben Bernanke, our nominee, stay on as the chairman of the Federal Reserve? And second, as this committee works to create a financial regulatory structure for the 21st century, what should be the role of the institution that the nominee would oversee?” Bernanke testified that today, most indicators suggest that financial markets are stabilizing and that the economy is emerging from the recession, yet the task at hand is far from complete. “Far too many Americans are without jobs, and unemployment could remain high for some time even if, as we anticipate, moderate economic growth continues,” Bernanke said. “The Federal Reserve remains committed to its mission to help restore prosperity and to stimulate job creation while preserving price stability. If I am confirmed, I will work to the utmost of my abilities in the pursuit of those objectives.  Bernanke noted that the outcome of the economic crisis the nation is facing could have been worse if Congress, the Treasury Department, the Federal Reserve and other authorities hadn’t stepped in. “For our part, the Federal Reserve cut interest rates early and aggressively, reducing our target for the federal funds rate to nearly zero. We played a central role in efforts to quell the financial turmoil, for example, through our joint efforts with other agencies and foreign authorities to avert a collapse of the global banking system last fall; by ensuring financial institutions adequate access to short-term funding when private funding sources dried up; and through our leadership of the comprehensive assessment of large U.S. banks conducted this past spring, an exercise that significantly increased public confidence in the banking system.”  Bernanke said the Fed also created targeted lending programs that have helped to restart the flow of credit in a number of critical markets, including the commercial paper market and the market for securities backed by loans to households and small businesses. “Indeed, we estimate that one of the targeted programs — the Term Asset-Backed Securities Loan Facility — thus far helped finance 3.3 million loans to households (excluding credit card accounts), more than 100 million credit card accounts, 480,000 loans to small businesses, and 100,000 loans to larger businesses. And our purchases of longer-term securities have provided support to private credit markets and helped to reduce longer-term interest rates, such as mortgage rates,” he said.  Bernanke said the actions the Fed has taken have been a contributing factor to the “significant improvement in financial conditions and to what now appear to be the beginnings of a turnaround in both the U.S. and foreign economies.”  Many committee members agreed that Bernanke’s actions during the crisis helped the country avoid what could have been a worse situation.  Bernanke also noted that he would like to work with Congress to achieve fundamental reform of financial system regulations and stronger, more effective supervision. “It would be a tragedy if, after all the hardships that Americans have endured during the past two years, our nation failed to take the steps necessary to prevent a recurrence of a crisis of the magnitude we have recently confronted,” he said. Some senators were critical of Bernanke at the hearing. According to The Washington Post , some members of the committee expressed grave concern about unemployment rates being the highest they’ve been in a generation and the reluctance of banks to stimulate economic activity by lending to businesses. “Unemployment is at 10.2 percent and climbing, and Fed officials forecast it to remain elevated for years to come,” the Post reported. Bernanke also received criticism for the Fed’s failures prior to and during the financial crisis and its decisions during the bailout of American International Group. The Washington Post also reported that Sen. Bernard Sanders , I-Vt., said that he will place a hold on Bernanke’s nomination, “a parliamentary maneuver that could delay a confirmation vote into next month and make it necessary for the Senate leadership to muster 60 votes in his favor, rather than the usual 51-vote majority.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 08 Dec 2009 00:00:00 EST 75C7D387FE774B0789CDFFFC99B3012E http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=0E7580EDB5C34599B351CE7B7E89FA16 The owner of a Suffolk County, N.Y. title company has entered a plea of guilty in County Court on charges stemming from the indictment wherein Ellner, George Guldi , a former Suffolk County Legislator and others were charged with grand larceny, conspiracy and scheme to defraud in regards to a multi-million dollar mortgage fraud scheme. Ethan E. Ellner , of Plainview , N.Y. ,   pleaded guilty to three counts of Grand Larceny 2nd degree, one count of Conspiracy 4thdegree and one count of Scheme to Defraud 1st degree.   Ellner, an attorney and owner of Suburban Abstract, a title company in Stony Brook , N.Y. , was arrested on March 25, 2009 as a result of an investigation conducted by the District Attorney’s Mortgage Fraud Unit formed by District Attorney Tom Spota in 2008.   Ellner admitted in court that he, Guldi, Donald MacPherson and others defrauded lending institutions of millions of dollars by using forged documents, false employment and income information on applications, straw buyers, false powers of attorney, deed flipping, and mortgage stacking. “Ellner’s plea of guilty represents a major step forward in the prosecution of this band of criminals led by Guldi and MacPherson operating on the East End to steal millions,” Spota said. Ellner who as a result of his plea will have his law license suspended is on for sentencing before County Judge FX Doyle on March 2, 2010, and faces a maximum term of 3 to 9 years incarceration. Guldi’s next court date is January 11, 2010. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 03 Dec 2009 00:00:00 EST 0E7580EDB5C34599B351CE7B7E89FA16 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=AD18EF0FFD01473B858AA001670BE832 There is little time left between now and the Jan. 1, 2010, deadline for implementation of the RESPA final rule. The settlement services and lending communities have been rocked by these changes, and many unanswered questions on how to use the new Good Faith Estimate (GFE) and HUD-1 Settlement Statement forms remain. In an effort to lend a helping hand to the industries it serves, October Research Corp. is partnering with financial services advisory firm The Collingwood Group LLC and its team of Washington experts. Together, the companies will offer an alternative to bird’s eye-level training programs and offer Webinars that provide line-by-line explanations of the forms, how to use them and how they will change business practices. If you’re tired of one-hour sessions that only skim the surface of how this RESPA reform will change the industry as we know it, these Webinars are not to be missed. The two-part “RESPA 2010 Webinar Series: Questions Answered” will feature: An introduction from Brian Montgomery , managing director of The Collingwood Group and former U.S. Department of Housing and Urban Development (HUD) assistant secretary for housing — Federal Housing Administration (FHA) commissioner, who oversaw and directed the development and publication of the rule; An explanation of the key issues addressed by the rule and insight into the deliberations and decisions that surrounded it by Gary Cunningham , principal with The Collingwood Group and former deputy assistant secretary for regulatory affairs at HUD, who led HUD’s efforts to develop the rule, GFE and HUD-1; and A line-by-line training on the forms by must-have RESPA compliance trainer Christopher Cruise , national marketing director for 1st National Title LLC. In two individual sessions, lenders, loan officers, mortgage brokers, title agents, attorneys, Realtors, settlement services providers and anyone else who needs to understand the new GFE and HUD-1 forms will benefit from in-depth training as well as an extensive Q&A period. “I have been studying and teaching RESPA for almost 20 years and this year has been one of the most exciting ever,” Cruise said. “The information that attendees will get from this Webinar will be down-to-earth, line-by-line and authoritative. I know the final rule, know the FAQs and know the forms. You’ll leave this Webinar absolutely confident in your ability to sell more loans using the new GFE and HUD-1.” The first part of the series, which will focus on the GFE form, will be held from 1 to 3:30 p.m. EST on Tuesday, Dec. 15. The second part of the series, which will focus on the HUD-1 form, will be held from 1 to 3:30 p.m. EST on Thursday, Dec. 17. The price for each Webinar is $149 or $275 for a combination of the two. The events will be produced by October Seminars and hosted by RESPA News and its sister publication The Title Report . More information regarding the series and registration for it is available at www.OctoberStore.com , or contact Jennifer Cannon , senior account representative at October Research, at jcannon@octoberresearch.com or 330-659-6101, ext. 7221. The Collingwood Group is a senior team of seasoned financial services executives providing business advisory services to boards of directors and executives of firms in the financial services industry. The firm provides clients with extraordinary insights and capabilities in the world of federal departments, agencies, GSEs, trade groups, news media and all those constituencies that make Washington , D.C. , a uniquely challenging business environment. Richfield, Ohio-based October Research is the nation’s leading provider of market intelligence, business news and state-by-state legal and regulatory information for the real estate services industry. Newsletters published by October Research include: The Title Report, The Legal Description, Valuation Review, RESPA News and Real Estate Insider . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 01 Dec 2009 00:00:00 EST AD18EF0FFD01473B858AA001670BE832 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=79D446F157D048E4ADFF455E8B0A6D2F The Federal Housing Administration (FHA) on Nov. 30 withdrew FHA approval of Ideal Mortgage Bankers, which is doing business as Lend America and Lending Key. The action is effective immediately and prevents Ideal from originating and underwriting new FHA-insured mortgages or from participating in the FHA single family insurance program. In addition, the Government National Mortgage Association (Ginnie Mae) defaulted Lend America . Effective immediately, Lend America will no longer be able to issue Ginnie Mae securities. “We have no tolerance for lenders who abuse their FHA-approval,” said FHA Commissioner David Stevens . “The evidence in this case points to a disturbing pattern of senior officials and underwriters, either not knowing what they were doing, or not caring. Therefore, Ideal has been immediately withdrawn from participating in the FHA-insured mortgage program.” The FHA also imposed civil money penalties against Ideal in the amount of $512,500. The Department of Housing and Urban Development’s (HUD) Mortgagee Review Board (MRB) took the action based upon two notices of violation issued to the company last month. The MRB cited Ideal for numerous violations of FHA origination and underwriting requirements, including failing to document borrowers’ income and creditworthiness, and for submitting false certifications to HUD. “FHA’s action triggers an immediate default in the Ginnie Mae program,” said Ginnie Mae Executive Vice President Mary Kinney . “We have taken these steps to protect the integrity of our MBS program and the American taxpayer.” At HUD’s request, the U.S. Attorney’s Office for the Eastern District of New York is also pursuing a civil fraud injunction against Ideal and one of its senior managers. The action taken by HUD’s MRB follows a quality assurance review that found Ideal violated HUD/FHA requirements by: Using conflicting information in originating and obtaining HUD/FHA mortgage insurance; Submitting false certifications that an employee of the lender obtained directly from the borrower the information contained in the application; Approving loans that did not meet the minimum credit requirements; Failing to adequately document the stability and/or source of income used to qualify mortgage loans; Failing to adequately document the source of funds used to close the loan or satisfy various omitted liabilities; Omitting liabilities from the underwriting analysis without supporting documentation; Approving loans with ratios that exceeded HUD standards without significant compensating factors; Exceeding HUD requirements when calculating the maximum insurable mortgage; Failing to process a loan in accordance with HUD policy on employee loans; Closing a loan with an excessive mortgage broker fee paid to an approved FHA loan correspondent; Failing to provide the required documentation to support Ideal’s decision to approve the mortgage loan; and Submitting false certifications to HUD in connection with the submission of its yearly verification report. Ideal has 30 days to challenge the withdrawal action and the imposition of civil money penalties before an administrative law judge. The action against Ideal is part of a broader enforcement effort by HUD against mortgage lenders for violating its requirements. Last August, FHA suspended, and Ginnie Mae defaulted, Taylor, Bean and Whitaker (TBW) for failing to submit a required annual financial report and misrepresenting that there were no unresolved issues with its independent auditor even though the auditor ceased its financial examination after discovering certain irregular transactions that raised concerns of fraud. TBW also failed to disclose, and actively concealed, that it was the subject of two examinations into its business practices in the past year. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 01 Dec 2009 00:00:00 EST 79D446F157D048E4ADFF455E8B0A6D2F http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=0FD2FAEF4BDF4EE6B8A0E8079CD0B61D The Illinois Department of Financial and Professional Regulation (IDFPR) repaid all the money lost from 34 Illinois homeowners’ escrow funds after American Escrow LLC went out of business earlier this year. The homeowners were in default for taxes and insurance coverage after Chicago-based American Escrow went out of business without making the obligatory property tax and insurance payments from their escrow accounts. Checks with a combined total of $77,912.73 were mailed during the past few weeks to homeowners throughout Illinois , some of whom were in danger of losing their homes due to unpaid property taxes. American Escrow was in the business of collecting property tax and insurance payments for homeowners whose lenders did not offer escrow services. After the company failed to make payments, IDFPR tapped its Transmitters of Money Act (TOMA) Consumer Protection Fund to help Illinois customers — who were among thousands nationwide — that were hurt by the company’s failure. IDFPR last summer cited American Escrow and its owners, Derek Lurie and his father, Steven Lurie , for the unlicensed practice of transmitting funds electronically. At the same time, Illinois Attorney General Lisa Madigan filed a lawsuit alleging that American Escrow violated the state’s Consumer Fraud and Deceptive Business Practices Act when the company unexpectedly closed in March 2009. IDFPR expects to pay an additional $27,000 in the coming weeks. Each claim was handled on a first-come, first served basis. IDFPR’s action also demanded that American Escrow make a payment to the TOMA fund at four times the amount of money for all transactions conducted by the company during the time in which it operated without the required license. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 19 Nov 2009 00:00:00 EST 0FD2FAEF4BDF4EE6B8A0E8079CD0B61D http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=0E5A495174BF4D1E9C5117BFFB90A01E U.S. Attorney General Eric Holder , Treasury Secretary Tim Geithner , Housing and Urban Development (HUD) Secretary Shaun Donovan , and Securities and Exchange Commission (SEC) Chairwoman Mary Schapiro announced that President Barack Obama has established by executive order an interagency Financial Fraud Enforcement Task Force to strengthen efforts to combat financial crime. The Department of Justice will lead the task force and the Treasury, HUD and the SEC will serve on the steering committee. The task force's leadership, along with representatives from a broad range of federal agencies, regulatory authorities and inspectors general, will work with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, address discrimination in the lending and financial markets and recover proceeds for victims. The task force, which replaces the Corporate Fraud Task Force established in 2002, will build upon efforts already underway to combat mortgage, securities and corporate fraud by increasing coordination and fully utilizing the resources and expertise of the government's law enforcement and regulatory apparatus. The attorney general will convene the first meeting of the Task Force in the next 30 days. "This task force's mission is not just to hold accountable those who helped bring about the last financial meltdown, but to prevent another meltdown from happening," Holder said. "We will be relentless in our investigation of corporate and financial wrongdoing, and will not hesitate to bring charges, where appropriate, for criminal misconduct on the part of businesses and business executives." "Through the Financial Fraud Task Force, we are making clear that the Obama administration is going to act aggressively and proactively in a coordinated effort to combat financial fraud," Geithner said. "It's not enough to prosecute fraud only after it's become widespread. We can't wait for problems to peak before we respond. We're seeking comprehensive financial reform to create a more stable, safer financial system and stepping up our enforcement strategy. Doing so will help to stop emerging trends in financial fraud before they're able to cause extensive, system-wide damage to our economy." "To give American families the protection and peace-of-mind they need, it's clear the federal response must be as interconnected and multi-dimensional as the challenges we face," Donovan said. "No one agency is going to be able to stop financial fraud. This Task force will build upon many of the inter-agency collaborations already underway to protect consumers and restore confidence." "Many financial frauds are complicated puzzles that require painstaking efforts to piece together. By formally coordinating our efforts, we will be better able to identify the pieces, assemble the puzzle and put an end to the fraud," Schapiro said. The task force is composed of senior-level officials from the following departments, agencies and offices: a. the Department of Justice; b. the Department of the Treasury; c. the Department of Commerce; d. the Department of Labor; e. the Department of Housing and Urban Development; f. the Department of Education; g. the Department of Homeland Security; h. the Securities and Exchange Commission; i. the Commodity Futures Trading Commission; j. the Federal Trade Commission; k. the Federal Deposit Insurance Corporation; l. the Board of Governors of the Federal Reserve System; m. the Federal Housing Finance Agency; n. the Office of Thrift Supervision; o. the Office of the Comptroller of the Currency; p. the Small Business Administration; q. the Federal Bureau of Investigation; r. the Social Security Administration; s. the Internal Revenue Service, Criminal Investigations; t. the Financial Crimes Enforcement Network; u. the United States Postal Inspection Service; v. the United States Secret Service; w. the United States Immigration and Customs Enforcement; x. relevant Offices of Inspectors General and related Federal entities, including without limitation the Office of the Inspector General for the Department of Housing and Urban Development, the Recovery Accountability and Transparency Board and the Office of the Special Inspector General for the Troubled Asset Relief Program; and y. such other executive branch departments, agencies, or offices as the President may, from time to time, designate or that the Attorney General may invite. In addition, the attorney general will invite representatives of the National Association of Attorneys General, the National District Attorneys Association and other state, local, tribal and territorial representatives to participate in the task force through its Enforcement Committee. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 19 Nov 2009 00:00:00 EST 0E5A495174BF4D1E9C5117BFFB90A01E http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=5A9175EE7B464252B8857E1A5D1BC10E The American Land Title Association (ALTA) announced that veteran land title insurance industry professional Anne L. Anastasi has been named president-elect for the 2009-2010 year. Anastasi is president of Hatboro, Pa.-based Genesis Abstract, LLC. Prior to opening her own company in 1994, she served as vice president of a regional land title insurance underwriter. In 1999, Anastasi served as the first female President in the 80-year history of the Pennsylvania Land Title Association. "I am honored to serve ALTA as its president-elect. The coming years will be pivotal for the title insurance industry," said Anastasi, who also serves on ALTA's Board of Governors and is Chairman of the Abstractors and Agent's Section for ALTA. "We will continue to reach out to legislators and regulators to educate them on the value of title insurance and the benefits it provides in assuring property rights. Each day we strive to make the closing process more transparent for homebuyers and for those refinancing their mortgages so they understand that title insurance is not just a product but a process – a valuable process.” Anastasi is a renowned national speaker, covering topics such as title insurance, customer service, sales and motivation. She has been the key-note speaker at more than 40 title industry state conventions and has addressed audiences for ALTA and the Real Estate Services Providers Council Inc. “Few work smarter or harder on behalf of the title industry than Anne,” said Kurt Pfotenhauer , chief executive officer of ALTA. “When the industry needed someone to help drive a consumer awareness program, Anne was there. When the industry called on her to testify at a hearing, she was there. When the industry needed someone to spearhead a training effort to educate state regulators and legislators on title insurance, she was there. On all fronts, Anne goes beyond what’s needed to serve her industry.” Anastasi graduated with honors from Colgate University with a major in Japanese. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 17 Nov 2009 00:00:00 EST 5A9175EE7B464252B8857E1A5D1BC10E http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=B6F7D0AA39734AF0A831A2B92D68F539 On the heals of the introduction and passage of several similar bills revolving around federal financial regulatory reform   in the House, Sen. Chris Dodd , D-Conn., chairman of the Senate Committee on Banking, Housing, and Urban Affairs, unveiled his proposal to bring sweeping change to the regulatory landscape. Joined by fellow committee members Jack Reed , D-R.I.; Charles Schumer , D-N.Y.; Robert Menendez , D-N.J.; Daniel Akaka , D-Hawaii; Jon Tester , D-Mont.; Mark Warner , D-Va.; Jeff Merkley , D-Ore.; and Michael Bennet , D-Colo., Dodd released a discussion draft of the Restoring American Financial Stability Act on Nov. 10. “It is the job of this Congress to restore responsibility and accountability in our financial system to give Americans confidence that there is a system in place that works for and protects them,” Dodd said at a press conference. “We must create a sound foundation to grow the economy and create jobs.” “This is a thorough and carefully constructed plan. It will promote innovation and job creation while protecting consumers and our economy as a whole from another crisis like the one we are now in. I look forward to the continued input and cooperation of my colleagues from both sides of the aisle,” he added. The 1,136-page piece of legislation proposes several changes to the current financial regulatory landscape, including establishing a Consumer Financial Protection Agency (CFPA), Office of National Insurance and Office of Credit Rating Agencies. Like HR 3126 , which is up for consideration in the House, Dodd’s bill would establish a CFPA consolidating consumer protection responsibilities that are currently handled by the Office of the Comptroller of the Currency, Office of Thrift Supervision, Federal Deposit Insurance Corporation, the Federal Reserve, the National Credit Union Administration and the Federal Trade Commission. The CFPA would be led by a five-member board with an independent director. Included on the board would be the chairman of the proposed single federal bank regulator, the Financial Institutions Regulatory Administration. In a summary of the bill, Dodd states that the CFPA will “unite rule-writing, supervision and enforcement for consumer protection in a single, stand-alone agency with broad authority to investigate and react to abuses as they develop.” The bill would allow states to pass tougher consumer protections that apply to all lenders, preventing federal regulations from preempting stronger state laws. In addition, the CFPA would coordinate with other regulators when examining banks to prevent undue regulatory burdens.    The bill also creates a new Office of National Insurance within the Treasury Department to monitor the insurance industry, coordinate international insurance issues and requires a study on ways to modernize insurance regulation and provide Congress with recommendations. The office would streamline the regulation of surplus lines insurance and reinsurance through state-based reforms.    In addition, the bill would establish a new Office of Credit Rating Agencies at the Securities and Exchange Commission (SEC) “to strengthen regulation of credit rating agencies.” The bill would also establish new rules for internal controls, independence, transparency and penalties for poor performance to address shortcomings and restore investor confidence in agencies’ ratings. Among other things Nationally Recognized Statistical Ratings Organizations would be required to: Disclose their methodologies, their use of third parties for due diligence efforts and their ratings track record; and Consider information in their ratings that comes to their attention from a source other than the organization being rated if they find it credible. The bill would also prohibit compliance officers from working on ratings, methodologies or sales. Investors would be able to bring private rights of action against ratings agencies for knowing or reckless failure to investigate or to obtain analysis from an independent source. It would also give the SEC the authority to deregister an agency for providing bad ratings over time. “I congratulate Senator Dodd and I am pleased at the progress Senator Dodd and other members of the Senate have made,” said Rep. Barney Frank , D-Mass., chairman of the House Financial Services Committee. “Obviously the bills aren’t going to be identical, but it confirms that we are moving in the same direction and reaffirms my confidence that we are going to be able to get an appropriate, effective reform package passed very soon.” While the Mortgage Bankers Association (MBA) supported improved federal oversight of independent, non-depository mortgage lenders, the association was disappointed that the bill does not provide for a uniform national standard to protect all consumers consistently. “Instead, the proposal would continue the patchwork of state and local lending laws and regulations that cause confusion and allow bad actors to prey on vulnerable borrowers,” said Jon Courson , president and CEO of the MBA. “We are also concerned with the broad ‘skin in the game’ provisions included in this proposal that would put certain business models at risk,” Courson added. “These regulations would thus unnecessarily deprive consumers and businesses of competition for safe and sustainable mortgage options and reduce the available funds for home financing by billions of dollars.” “On a final note, rating agency regulatory reform should strike the delicate balance of providing a robust regulatory framework that avoids stifling the introduction of new and innovative commercial and residential mortgaged-backed security products. MBA will work with Senator Dodd to achieve this appropriate balance.” “We are committed to working with Chairman Dodd and others during consideration of the bill to help make sure that it best serves its intended purpose — ensuring more effective regulation of the mortgage industry and better protection for consumers.”   Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 12 Nov 2009 00:00:00 EST B6F7D0AA39734AF0A831A2B92D68F539 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=BDC56E056D32455C9E614473BA88885A The U.S. District Court for the Western District of Michigan recently dismissed Old Republic National Title Insurance Co.’s contract suit against one of its agents for failure to establish subject matter or diversity jurisdiction. Old Republic is allowed to file an amended complaint establishing diversity jurisdiction by Dec. 2. Old Republic ’s complaint asserts two breach-of-contract claims and one negligence claim against Escrow & Title Services Inc,, which does business as Bell Title Co. Under the parties’ agency agreement, Bell agreed to indemnify Old Republic for certain losses arising from Bell ’s issuance of title commitments and policies underwritten by Old Republic . Old Republic ’s suit originally stemmed from five transactions Bell conducted on behalf of Old Republic . Claims arising from two of the transactions were settled in June, leaving claims from three transactions. In each transaction, due to Bell’s action Old Republic had to pay a claim that the company alleges under the agency agreement Bell is required to indemnify it for. Old Republic claims that Bell ’s alleged failure to timely record one mortgagee’s lien constituted breach of contract, breach of closing instructions and common-law negligence or gross negligence. Regarding another transaction, Old Republic claims that Bell ’s failure to discharge and close a home equity line of credit also constituted breach of contract, breach of closing instructions, and common law negligence or gross negligence. In the third transaction, Old Republic claims that Bell ’s failure to obtain the signature of a mortgagor’s wife on the mortgage documents also constituted a breach of contract, breach of closing instructions and common-law negligence or gross negligence. In total, Old Republic ’s compliant seeks indemnification of about $244,000. In the complaint, Old Republic asserts that it is a Minnesota corporation, Bell is a Michigan corporation and the court has diversity jurisdiction of the case. However, according to the court, Old Republic fails to specify the principal place of business of either party, “let alone allege facts to support such allegations.” The court, therefore, determined that Old Republic has not met its burden of establishing the complete diversity of citizenship required for federal diversity jurisdiction. The court pointed out that under Title 28 U.S.C. Section 1331, district courts have original jurisdiction of all civil actions arising under the Constitution, laws or treaties of the United States . “The complaint does not assert any cause of action even arguably arising under federal law,” the court stated. “In short, it appears that this court does not have federal-question jurisdiction. Absent federal question jurisdiction, this court cannot proceed to the merits of the case unless it has diversity jurisdiction. As the plaintiff, Old Republic has the burden of establishing all elements of diversity jurisdiction.” The court noted that the rule for American corporations is that for the purpose of determining diversity jurisdiction and removability, a corporation is determined to be a citizen of both of any state where it is incorporated and the state where it maintains its principal place of business. The complaint asserts where each party was incorporated, but fails to specify where they maintain their principal place of business. “ Old Republic must specifically allege the states in which it believes each party maintains its principal place of business and provide underlying facts to support that allegation, both of which the current complaint fails to do,” the court stated. “On the present record, the court cannot rule out the possibility that plaintiff is a citizen of the same state as a defendant, and the court cannot simply assume that they are not. Therefore, Old Republic has not carried its burden of establishing the existence of federal jurisdiction and the case is properly dismissed until and unless it corrects that defect.” Old Republic may file an amended complaint by Dec. 2. The court noted that any amended complaint shall: Omit material relevant only to the claims dismissed on June 30, 2009; Calculate indemnification without reference to claims dismissed on June 30, 2009; and Specify the source of authority for indemnification. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 10 Nov 2009 00:00:00 EST BDC56E056D32455C9E614473BA88885A http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=02D7079A5F30412CAF6E7FBB08649431 As the dust settles and the housing industry begins to stabilize, federal and state regulators are taking steps to make sure the crisis never happens again, particularly in response to the Government Accountability Office’s (GAO) recommendations in its 2007 industry report, “Actions Needed to Improve Oversight of the Title Industry and Better Protect Consumers.” Examples of this are abundant. The National Association of Insurance Commissioners (NAIC) has approved a State Page proposal, which will provide an extra set of pages to go into a title insurer’s annual statement. This will provide more detailed information by state for the NAIC and state regulators to evaluate the title insurance industry. Agent closings in Texas and other states emphasize the need for regulators to ensure the solvency of agents under their jurisdiction. Underwriters have become more focused on what their agents are doing as well, attempting to make sure every agent gets audited once a year in the face of investor concerns. With all of this focus on title agencies, agents will need to be prepared for these additional data calls and audits, which includes having processes in place so the agent is not caught off guard when the auditor comes knocking. To help navigate these changes and make sure you are always prepared for an audit, The Legal Description and October Seminars, a division of October Research, are hosting the audio seminar “Acing the Audit: Tips and tools for successful audit preparation.” During the event, attendees will hear from an agent who has created processes and products to make accounting easier, a former “in the trenches” regulator and the director of auditing of a regional underwriter who will help guide participants through the sticking points of an audit. Attendees will have the opportunity to listen as they share their insight during a discussion to be held from 2:00-3:00 p.m. ET on Wednesday, Nov. 4 . During the show, our knowledgeable panelists will help participants by:   Giving them some best practices they can implement so that they are always prepared for an audit; Providing them with some tools of the trade to use to help them make the preparation easier; Providing suggestions for internal controls so that everyone in the office is held accountable for their part in the process; Helping them find the trouble spots in accounting that every agent should pay attention to — and how to address them; and Letting them hear from experienced auditors to find out what gets their attention during an audit. Panelists will include Anthony Messineo , auditing director, Westcor Land Title Insurance Co.; Richard Reass , president, Rynoh Live; and Michelle Tate , investigator, New York State . Moderating the show will be Andrea Golby , editor of The Legal Description and Syndie Eardly , editorial director of October Research Corp. To sign up for the show or get more information click here . The seminar is hosted by The Legal Description and produced by October Seminars, a division of October Research Corp., which publishes The Title Report , RESPA News , Valuation Review , The Legal Description and Real Estate Insider . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 29 Oct 2009 00:00:00 EST 02D7079A5F30412CAF6E7FBB08649431 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=E8379A1B130F40849AF6F1781E3F23F2 As the dust settles and the housing industry begins to stabilize, federal and state regulators are taking steps to make sure the crisis never happens again, particularly in response to the Government Accountability Office’s (GAO) recommendations in its 2007 industry report, “Actions Needed to Improve Oversight of the Title Industry and Better Protect Consumers.” Examples of this are abundant. The National Association of Insurance Commissioners (NAIC) has approved a State Page proposal, which will provide an extra set of pages to go into a title insurer’s annual statement. This will provide more detailed information by state for the NAIC and state regulators to evaluate the title insurance industry. Agent closings in Texas and other states emphasize the need for regulators to ensure the solvency of agents under their jurisdiction. Underwriters have become more focused on what their agents are doing as well, attempting to make sure every agent gets audited once a year in the face of investor concerns. With all of this focus on title agencies, agents will need to be prepared for these additional data calls and audits, which includes having processes in place so the agent is not caught off guard when the auditor comes knocking. To help navigate these changes and make sure you are always prepared for an audit, The Legal Description and October Seminars, a division of October Research, are hosting the audio seminar “Acing the Audit: Tips and tools for successful audit preparation.” During the event, attendees will hear from an agent who has created processes and products to make accounting easier, a former “in the trenches” regulator and the director of auditing of a regional underwriter who will help guide participants through the sticking points of an audit. Attendees will have the opportunity to listen as they share their insight during a discussion to be held from 2:00-3:00 p.m. ET on Wednesday, Nov. 4 . During the show, our knowledgeable panelists will help participants by: Giving them some best practices they can implement so that they are always prepared for an audit; Providing them with some tools of the trade to use to help them make the preparation easier; Providing suggestions for internal controls so that everyone in the office is held accountable for their part in the process; Helping them find the trouble spots in accounting that every agent should pay attention to — and how to address them; and Letting them hear from experienced auditors to find out what gets their attention during an audit. Panelists will include Anthony Messineo , auditing director, Westcor Land Title Insurance Co.; Richard Reass , president, Rynoh Live; and Michelle Tate , investigator, New York State . Moderating the show will be Andrea Golby , editor of The Legal Description and Syndie Eardly , editorial director of October Research Corp. The seminar is hosted by The Legal Description and produced by October Seminars, a division of October Research Corp., which publishes The Title Report , RESPA News , Valuation Review , The Legal Description and Real Estate Insider . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 27 Oct 2009 00:00:00 EST E8379A1B130F40849AF6F1781E3F23F2 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=C1B5886F599742918B46CBD915AD23E9 Governor Arnold Schwarzenegger has vetoed a bill htat would have made several changes to current law to facilitate the removal of unlawful restrictive covenants in deeds of real property. The governor’s veto of AB 985 , sponsored by Assembly Member Hector De La Torre , D-South Gate, was supported by the California Land Title Association (CLTA). The bill would have required the recorder of each county to create a public version of each official record for which a restrictive covenant modification is recorded on or after Jan. 10, 2010, so that the public record is in an electronic format and is an exact copy of the official record, except that any unlawfully restrictive covenant contained in the official record shall be redacted. The bill would require the county recorder also to covert the official record into an electronic format at that time. In order to pay for the redaction of restrictive covenants, county recorders would be authorized to charge an additional fee for recording the first page of each document to be used by the county. They would be required to review and recalculate the fee periodically to determine the amount reasonably necessary to recover actual costs. In its argument in favor of the veto, CLTA noted that the fee would have been $2 per document in the first year of implementation. However, there was no cap on the fee in subsequent years. CLTA pointed out that county recorders would have been authorized to raise the fee an unspecified amount if they determined the funds were necessary to implement the provisions of the bill. In addition, the legislation would have required a county recorder, title insurance company, escrow company, real estate broker, real estate agent or association that provides a copy of a declaration, governing document or deed to a person who holds an ownership interest of record in property to also provide a restrictive covenant modification form with specified procedural information to that person. The bill would have also authorized a title insurance company, escrow company, real estate broker, real estate agent or other person to record a restrictive covenant modification, in addition to the owner of record and would have required the requestor to provide a return address in order for the county recorder to notify the interested party of the action taken by county counsel on the respective property. CLTA felt that requiring title companies, homeowners associations and real estate professionals to hand out those potentially unnecessary forms to consumers would have created unnecessary confusion in the escrow process. CLTA was unable to reach a compromise with De La Torre to improve the existing statutory process for finding and removing restrictive covenants from deeds and helped coordinate the opposition and veto efforts with other groups representing real estate professionals, homeowners associations and anti-tax associations. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.     Thu, 22 Oct 2009 00:00:00 EST C1B5886F599742918B46CBD915AD23E9 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=A5EA450E874640FC8E351C2897BEE1FF With the industry now under three months away from implementation of the RESPA final rule — and without any sign of delay in sight — title companies across the country are shifting focus from waiting to see what will happen to preparing for the transition. And with it comes a form change that alters the way title agents perform closings as we know them today: the new HUD-1 Settlement Statement. Many are working hard to figure out how everyday processes will be realigned on Jan. 1, 2010, when the HUD-1 and the new Good Faith Estimate (GFE) must be used. To offer some guidance along the way, The Legal Description’s sister publication, The Title Report and October Seminars are hosting the audio seminar “Transitioning to the new HUD-1: Processes, protocols and pressure points.” The event will join panelists from all sides of the table, including perspectives from the title agent, lender and technology vendor. Listen in to hear the wealth of information that will be shared in this roundtable discussion to be held from 1-2:30 p.m. ET on Tuesday, Oct. 27. This unique seminar will allow these highly knowledgeable panelists to share how they have become RESPA-ready and the ways they anticipate working together, sharing information and encouraging a smooth transition. Discussion will cover these talking points and more: When will lenders begin rolling out the new GFE? How will the next months be used for preparation in using the new forms and adhering to tolerances prior to the Jan. 1, 2010 deadline? How will processes be changed for transmitting information to title agents once lenders begin to use the new GFE? How will title agents verify information from lenders? What kinds of pressure points will lenders feel under the new system that title agents need to understand? How will lender expectations change toward closing in terms of level of service and turnaround times? What are the new protocols for being compliant with tolerances and what will the process be for curing violations? How are all parties training their staffs and addressing communication between clients and partners? What kind of quality control and follow-up will be implemented to be sure proper procedures are followed? Panelists will include: Kevin M. Breeland, general manager , Residential Mortgage of South Carolina ; Thomas W. Cronkright II , owner & CEO, Sun Title Agency; Anne M. Wenninger Gehring , VP, compliance manager, retail lending, Marshall & Ilsley Bank; Lisa Simmons , product manager, DHI Financial Services, a division of D.R. Horton Inc.; and Leslie Wyatt , product manager, SoftPro. Moderating the show will be Jennifer Kovacs , editor of The Title Report , and Syndie Eardly, editorial director of October Research Corp. The seminar is hosted by The Title Report and produced by October Seminars, a division of October Research Corp., which publishes The Title Report , RESPA News , Valuation Review , The Legal Description and Real Estate Insider . Comments/questions? Contact Jennifer Kovacs at jkovacs@octoberresearch.com . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 20 Oct 2009 00:00:00 EST A5EA450E874640FC8E351C2897BEE1FF http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=1F0E9E0A642D45E8A4917293CA22A07B The Real Estate Services Providers Council Inc. (RESPRO) will sponsor two comprehensive one-day seminars on the Real Estate Settlement Procedures Act (RESPA) on Nov. 3 in Denver and on Nov. 5 in Chicago . RESPA is a federal consumer disclosure and anti-kickback statute designed to inform consumers of their settlement costs and to prohibit kickbacks among mortgage, title, real estate and other settlement service providers.  New RESPA regulations requiring that loan originators provide borrowers with a standard Good Faith Estimate of key loan terms and closing costs and that closing agents provide borrowers with a new HUD-1 Settlement Statement are scheduled to take full effect on Jan. 1, 2010. The RESPRO RESPA Regulatory Compliance Seminars are for real estate brokers, mortgage lenders/brokers, title and closing agents, and other settlement service providers with a basic knowledge of RESPA. It will feature two of the nation's top RESPA experts:  Phil Schulman of KL Gates LLP and Jay Varon of Foley & Lardner LLP.   Each Seminar will feature: Advice on how to successfully implement HUD's new RESPA disclosures How to structure a RESPA-compliant marketing or work share arrangement What affiliated businesses need to do to make sure they comply with RESPA and HUD's joint venture guidelines What real estate brokers, mortgage lenders/brokers, title companies, and other settlement service providers need to know when pricing their services The latest RESPA compliance advice from the Department of Housing and Urban Development Open time with the experts for attendees’ RESPA compliance questions Attendees of each seminar are eligible to receive seven continuing legal education credits. For further information about the RESPA regulatory compliance seminars, see http://www.respro.org/index.aspx?sectionid=294 .  Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 15 Oct 2009 00:00:00 EST 1F0E9E0A642D45E8A4917293CA22A07B http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=2C21859FA93E4D53A098B54B664231CA After the Court of Appeals of Indiana reverses a trial court’s judgment against a seller for back-taxes an abstract company paid on a property, the seller went back to the appellate court demanding attorneys fees. The case is: Rudolof G. Rodriguez Jr. v. Rainbow Searchers Inc. (Court of Appeals of Indiana , No. 76A03-0905-CV-202. Defendant-appellant Rudolfo Rodriguez sold property in Steuben County to Richard Williams on Dec. 6, 2006. Lakeview Title LLC provided the closing settlement statement and obtained title insurance services for the transaction. The title insurance commitment included a list of exceptions that had to be taken care of before the title insurance policy was issued, including taxes due in 2005 and payable in 2006. To prepare the title insurance commitment, closing agent Jodi Getz retained plaintiff-appellee Rainbow Searchers Inc. to search for liens on the property. Rainbow then hired Roberta Deem to conduct the title search. During her search of the Steuben County Treasurer’s Web site, Deem did not fined any evidence of a tax sale. She conveyed her results to Rainbow. Getz then prepared the title insurance commitment and held closing on Dec. 6. The commitment showed that taxes due in 2005 and payable in 2006 had been paid in the total amount of $647.64. Before issuing a title insurance policy, the title insurance company required Rodriguez to sign an owner’s affidavit, in which he averred that there were no tax liens affecting the property. When Getz when to record the mortgage and warranty deed in the Steuben County Auditor’s office, she was notified that taxes on the property had become delinquent. As a result the property had been included in a tax sale on Sept. 29, 2006 and sold for $2,467.12. Lakeview redeemed the property by paying $3,685.79. Deem then wrote a check to Rainbow for the amount of the tax sale and on Jan. 3, 2007, Rainbow issued a check to Lakeview. On April 17, 2007, Rainbow filed a notice of claim against Rodriguez in the Steuben Superior Court, Small Claims Division. The court found in favor of Rainbow and entered judgment against Rodriguez for $4,104.25. The appellate court reversed that decision on the grounds that Rainbow lacked standing and remanded the case to the trial court for a determination of whether attorney’s fees were appropriate. The trial court denied Rodriquez’s request for attorney’s fees. In its decision, the court stated that “the decision of the Court of Appeals decided that [Rainbow]’s claim lacked a legal foundation.” “However, the magistrate does not find, by a preponderance of the evidence that the plaintiff had the specific intent to harass, or that no basis factually existed to pursue the claim,” the lower court stated.    Rodriguez then filed a verified motion in aid of appellate jurisdiction seeking clarification regarding: 1) whether the trial court improperly denied attorney’s fees due to lack of jurisdiction and 2) whether this court ordered the trial court to hold a hearing on attorney’s fees. In challenging the trial court’s judgment, Rodriquez pointed to the appellate court’s determination that Rainbow lacked standing to bring its claim, which in his view demonstrates the frivolous nature of the claim and justifies attorney’s fees. “Rainbow was ultimately unsuccessful, but the trial court specifically found that the pursuit of such claim was not without factual basis or for harassment purposes,” the court stated. “Rodriguez allegedly owed taxes on real property which Rainbow’s independent contractor Deem paid for. While Deem paid for the tax delinquency rather than Rainbow, we cannot say that the trial court abused its discretion in denying Rodriguez attorney’s fees, especially in light of the court’s findings regarding the non-frivolous nature of Rainbow’s claim.” Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 13 Oct 2009 00:00:00 EST 2C21859FA93E4D53A098B54B664231CA http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=3A57C566368040099427B25A68A4D7F6 The Minnesota Department of Commerce has summarily suspended the Title Insurance Agency license of Scenic Title & Abstract, Inc. of  Duluth and Two Harbors , Minn. , the insurance producer licenses of Kevin D. Eckholm and Sharyn K. Hill both of Duluth who were employed at Scenic Title & Abstract, and the Notary Commissions of Eckholm, Hill and Linda E. Eckholm . Scenic Title & Abstract has been charged with fraudulent conduct. In the Order For Summary Suspension, Department of Commerce investigators allege that, between 2006 and 2009, there were at least 237 instances where Scenic Title & Abstract collected insurance premiums from clients on behalf of Fidelity National Title Insurance Company which were never sent to Fidelity. In addition, despite having an Abstracters license which expired June 30, 2007, Kevin Eckholm told investigators he had done "around 100" property abstracts in the last 12 months. Other allegations made in the summary suspension order are that Scenic Title failed to pay withholding taxes for its employees, the company's unpaid business obligations totaled at least $28,000, and that its known financial obligations far exceeded the amount of money available in its bank accounts. "Title insurance companies handle large amounts of money," said Glenn Wilson, Commissioner of the Minnesota Department of Commerce. "When a company and its employees fail to meet their financial obligations, public trust and confidence is seriously undermined, and customers of the company are harmed. We will continue to be vigilant in the enforcement of our laws which protect individual consumers as well as the broader marketplace." This is one of ten enforcement actions taken by the Department against title insurance companies this year. The Department's Order for Summary Suspension of these licenses is effective immediately and will be considered at a hearing before an Administrative Law Judge. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 08 Oct 2009 00:00:00 EST 3A57C566368040099427B25A68A4D7F6 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=28FBCDF4951844868B0ECC185592F6F4 NexGen Compliance Solutions LLC announced a new, revolutionary Mortgage Disclosure Improvement Act (MDIA) compliance solution through the Web-based software product TitleHound. TitleHound is a Web-based title insurance rate engine that searches the major underwriters and finds the lowest rates available that saves consumers significant money at closing. This software ensures that consumers receive the best product and price while protecting lenders and title agents from claims of overcharging. This new software also provides lenders and title agents with a tool to manage their title insurance orders efficiently. As lenders and title agents struggle with MDIA compliance and the delays due to re-disclosure waiting periods, TitleHound offers the ideal solution. With accurate upfront title and settlement cost disclosures, including title premiums, available discounts, recording fees, mortgage taxes, stamps and more, TitleHound allows MDIA compliance without disclosure delays. MDIA compliance presents both lenders and title agents with new challenges. While the change is good for the consumer, it has the potential for a not-so-good result due to delays caused by inaccurate disclosures or circumstantial changes that require new disclosures and the accompanying waiting periods. In an industry where speed to funding has been paramount to consumer satisfaction, upfront accuracy is more critical then ever before. Now in addition to speed, the industry is rebuilding consumer trust and brand confidence. Small errors or hidden costs can add up to lost days for the consumer and lost profits for both lenders and agents if those errors are simply written off. In trying to ensure disclosure compliance, many lenders are facing the overwhelming task of trying to manage their disclosures with data from hundreds or even thousands of title and settlement agents where the costs may vary agent to agent. While averaging is an option, it comes with its own set of management complexities. As consumers and regulators examine the costs associated with obtaining financing, lenders and agents scramble for better ways manage the complex world of title and settlement services and costs, especially as lenders shoulder the full responsibility of MDIA compliance including all third party fees as well as their own lender fees. TitleHound is the first software program to provide compliance confidence for both lenders and agents by returning a comprehensive list of available title insurance products that match the consumer's specific situation with the premium costs accurately displayed for each product. Often overlooked discounts are displayed giving the loan officer an opportunity to save the consumer hundreds of dollars on title insurance. Additionally, recording fees and other settlement costs provide for a more complete comparison of costs. Selection of product and provider can be made based on best cost to the consumer as well as best-of-class service providers. Disclosing accurate information upfront in seconds rather than days takes the guess work out of MDIA compliance, reducing the delays associated with having to redisclose. In addition to accurate product and premium costs, TitleHound provides lenders and agents a tool to manage the flow of business to their providers. Lenders and agents use TitleHound to control the distribution of orders to those providers that meet their service, product and price requirements. The mystery is removed from the selection process even when the consumer is engaged in that process by providing choices. TitleHound is the perfect tool for ensuring the consumer gets the best product and price available while lenders and agents get protection against claims of overcharging.     "With TitleHound, we are excited to offer a new product that benefits the consumer while also providing the industry with a tool that provides accurate information on a Web-based platform that is easy to use," said NexGen President Jeffrey Adam . Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 06 Oct 2009 00:00:00 EST 28FBCDF4951844868B0ECC185592F6F4 http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=7C99F6E23BAE4EC0BC6DF1B9833F942F Senators Charles E. Schumer , D-N.Y, and Jon Kyl , R-Ariz.. announced new legislation to better protect homeowners from the recent wave of mortgage scams by providing up to $200 million over two years for State and local prosecutors offices to battle real estate fraud. The bill authorizes the Justice Department to award competitive grants to prosecutors’ offices that seek to hire specialized staff—including investigators, forensic accountants, and attorneys—to combat such scams.   Across the country, prosecutors, homeowner advocacy groups and state agencies have had trouble investigating and prosecuting mortgage fraud cases due to lack of staff and funding. The creation of “real estate fraud units” within State and local prosecutors’ offices will resolve these issues by employing staffers who focus exclusively on real estate crimes that plague homeowners and prosecute scammers for their crimes. “The housing crisis has spawned a cottage industry of refinancing and foreclosure prevention scams. This bill will put a stop to the criminals who are trying to swoop in and take advantage of desperate homeowners,” Schumer said . “Housing scams are a national problem and they require a national solution. These fraud units will help protect homeowners and ensure that those who try to prey on them are prosecuted to the fullest extent of the law.” “ Arizona ranked sixth on the FBI’s list of states with the highest incidences of real estate fraud in 2008,” Kyl said .  This grant program will give state prosecutors the resources needed to investigate and target those who fraudulently profited from predatory lending practices during the housing boom, as well as those who are illegally stripping homes during the downturn of the market.” Nationwide, mortgage fraud and deed theft cost homeowners $4 billion to $6 billion annually, according to estimates of the F.B.I. Increased prosecution of housing frauds is a necessary step to end the crisis currently manifesting itself in the foreclosure wave.  Prosecutions can result in jail sentences for the offenders and restitution for the victims, which currently is very rare. The majority of housing fraud cases involve some degree of criminal conduct, such as theft of a home through a forged deed, a foreclosure rescue scam where a victim unwittingly signs over ownership of the house, falsification of borrower assets by a mortgage broker, or falsification of an appraisal report in order to close a loan that the borrower cannot actually afford. But uncovering the evidence of criminality requires investigative resources that are currently not readily available to victims. Schumer and Kyl’s bill, known as the Fighting Real Estate Fraud Act of 2009, establishes a competitive grant program in the Department of Justice for State, local, and tribal prosecutors to fight real estate fraud. Under this bill, real estate fraud includes crimes involving purposeful misrepresentations, forgeries, and omissions to general applications, tax returns, and financial statements, appraisals and valuations, verifications of deposit and employment, escrow and closing documents, credit reports, and any actions that may defraud a secured creditor. The Attorney General is authorized to make grants on a competitive basis through the Bureau of Justice Assistance to assist prosecutors in investigating and prosecuting real estate fraud. The bill authorizes $100 million in grants for two years. These grants will be used for hiring specialized staff to offices in need of specialized resources to combat scams. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Thu, 01 Oct 2009 00:00:00 EST 7C99F6E23BAE4EC0BC6DF1B9833F942F http://www.thelegaldescription.com/ME2/Audiences/dirmod.asp?sid=27A4314B48C54B57974C81C84B111D8A&nm=&type=news&mod=News&mid=ACAC9426E1214D159500CBCA87ADAFBD&tier=3&nid=D132A4FC5370411FBFE1D9BA3B3EA35D During its annual fall meeting in Washington , D.C. , the National Association of Insurance Commissioners (NAIC) Rating Agency (E) Working Group held a hearing on the role of Nationally Recognized Statistical Ratings Organizations (NRSRO). The hearing examined the roles of these credit rating agencies in the insurance regulatory system and what changes may be needed in light of the financial crisis. Representatives from Standard & Poors, Fitch Ratings, DBRS Limited and the Securities and Exchange Commission were in attendance. According to a report in Business Insurance, most participants agreed that the credit rating system needed reform, but there was no consensus as to how to overhaul the system. Birny Burnhaum , executive director for the Center for Economic Justice, a consumer advocacy group based in Austin , Texas , said the ratings agencies didn’t know what they were doing when rating subprime mortgage-backed securities and suggested the NAIC’s Security Valuation Office (SVO) take over the evaluation of structured securities. One of SVO Managing Director Chris Evangel’s concerns about such an expansion was the cost involved. He also pointed out that the SVO depends on insurers to provide information on securities. Another alternative, presented by David P. Marks , executive vice president and chief investment officer of CUNA Mutual Group, was for insurers to establish their own independent, nonprofit rating agency. Business Insurance reported that many witnesses agreed that most major rating agencies have an inherent conflict of interest. This is because they are paid by the issuers of structured securities to rate the instruments. However, Keith Buckley , group managing director and head of the insurance group at Fitch Ratings, disagreed, saying those perceived conflicts of interest were not the cause of the economic crisis. He assured those in attendance that the credit rating system is not broken. Jerome Fons , principal of Fons Risk Solutions, on the other hand, said he doubts that the public will ever trust the major credit rating agencies again. The working group will now develop and present a final report documenting the findings and any recommendations for corrective action available to the NAIC and its members, as well as recommendations to the federal government on NRSRO regulation. Credit rating agencies are on the radar of regulators and legislators. The California attorney general is launching his own investigation into the agencies and Rep. Paul Kanjorski , D-Pa., chairman of the House Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises, will hold a hearing on Sept. 30 to examine possible ways to reform the regulation of credit rating agencies. Affordable reprints of this article are available. Click here for more information. Comment Box - October Research Corporation is not responsible for the comments posted on its web sites by readers. We will do our best to remove comments that include profanity, personal attacks or other inappropriate remarks.   Tue, 29 Sep 2009 00:00:00 EST D132A4FC5370411FBFE1D9BA3B3EA35D