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The Legal Description Edition
January 6, 2014
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New York insurance regulator questions title insurers’ rates, expenses
Posted Date: Thursday, December 12, 2013
The New York Department of Financial Services questioned title insurers regarding their rates and expenses during a hearing on Dec. 10, in the department’s offices in Manhattan that, according to the notice on the DFS website, lasted from 10 a.m. to 5 p.m. What was said during the hearing and what could be next for the title industry in New York?
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Reg X amendments coming in 2014, according to CFPB
Posted Date: Wednesday, December 18, 2013
According to a semi-annual rulemaking agenda released by the Consumer Financial Protection Bureau on Dec. 3, the agency is planning to amend RESPA’s Regulation X sometime next summer. Read on for more information concerning these planned updates.
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Rep. Mel Watt confirmed as FHFA director
Posted Date: Thursday, December 12, 2013
In a 57-41 vote, the Senate confirmed Mel Watt to serve as the director of the Federal Housing Finance Agency. Read on to find out more and for reaction from the industry.
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Wisconsin substitutes mortgage satisfaction statute
Posted Date: Tuesday, December 10, 2013
Wisconsin legislators adopted a bill to replace its current mortgage satisfaction statute. The bill contains language similar to the Uniform Residential Mortgage Satisfaction Act. Read on for more details.
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Alabama considers changes to fingerprint requirements for license application
Posted Date: Thursday, December 5, 2013
The Alabama legislature has pre-filed a bill for its session beginning January 2014 eliminating the requirement that all fingerprint records for applicants for license as a title insurance agent be stored with the National Association of Insurance Commissioners. Read on for more details.
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Florida holds hearing on proposed data call regulations
Posted Date: Tuesday, December 10, 2013
The Florida Department of Financial Services and the Office of Insurance Regulations are holding a hearing on Dec. 10 to discuss an amended version of Rule 690-186.013, which would adopt the form that title agents and title insurer’s direct operations would have to compete on an annual basis pursuant to Section 627.782, Florida Statutes. This law, adopted in 2012, requires title agencies and insurers licensed in the state to maintain and submit certain information to the FLOIR, including revenue, loss and expense data.
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WFG adds to compliance, audit department
Posted Date: Tuesday, December 10, 2013
WFG National Title Insurance Co. has added a new member to its compliance and audit departments. The new hire will be senior vice president, senior auditor. Read on to find out more about the new face at WFG.
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MIA orders title agency to repay $2.3M in overcharged fees
Posted Date: Thursday, December 5, 2013
Thousands of Maryland consumers who were overcharged during real estate settlements should receive refunds from their title company in the coming months, following an investigation by the Maryland Insurance Administration. The agency is to repay 5,338 consumers approximately $2.3 million. Read on for more details.
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ALTA brings on new director of government affairs
Posted Date: Wednesday, December 18, 2013
The American Land Title Association (ALTA) appointed a new director of government affairs. He will be focusing on building and strengthening relationships between members of Congress and ALTA. He will also work to enhance the relationships individual ALTA members have with members of Congress and increase ALTA member participation in grassroots activity.
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Are you ready?
Posted Date: Tuesday, January 7, 2014
On your marks, get set, go! We are days away from the implementation of the Ability-to Repay-Rule and its qualified mortgage standards, which, by any indication, will prove to have a significant impact on the availability of mortgages this year. Lenders will be careful about what types of mortgages they approve, and there are bound to be some unexpected bumps in the road.
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Industry prepares for year of implementation
Posted Date: Tuesday, January 7, 2014
From the new mortgage disclosure rule, to third-party oversight by lenders based on regulator bulletins, to efforts by the National Association of Insurance Commissioners and state regulators to make sure consumers are paying the best price, 2013 was a year for big regulatory proposals impacting the title insurance industry. Now it’s time for industry members to dig in and begin implementing some of the discussed changes.
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Florida bill to push privatization of flood insurance over federal program
Posted Date: Wednesday, December 18, 2013
In Florida, a bill has been introduced that could drastically alter flood insurance, potentially making Florida the first state to push privatization over the federal program. How will this be accomplished? Read on for a few details on this proposed legislation.
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Calif. court rejects appeal based on reasonable expectation of title coverage
Posted Date: Wednesday, December 18, 2013
The case Karen Lee et al., v. Fidelity National Title Insurance Co. (No. A134169) was originally appealed to the Court of Appeals of California, First District, Division One, after the trial court granted summary judgment in favor of the defendant. The appeals court reversed that decision, holding that the preliminary report issued to the plaintiffs could be construed as offering coverage for the disputed parcel of land. What happened the second time around?
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Why you should always back up your data
Posted Date: Wednesday, December 18, 2013
We’ve all had the unpleasant experience of working on something in, say Word, closing out of it without saving and going back only to realize that all the work you did was gone. Now imagine that happening to your financials, software and client information. It doesn’t look good. Here are some things to help you develop a system of backing up your data so that never happens.
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Giving gifts and staying compliant during the holidays
Posted Date: Monday, December 16, 2013
The holidays are upon us and that means it’s the gift-giving season. If you are considering passing out some presents to your colleagues, remember to stay RESPA compliant. The last way you want to spend the New Year is under a Consumer Financial Protection Bureau (CFPB) investigation.
RESPA Section 8 prohibits giving or receiving a “thing of value” in exchange for the referral of settlement service business. However, RESPA defines “thing of value” as “any payment, advance, funds, loan, service or other consideration.” A holiday gift could be included in that definition, particularly if it’s given in exchange for a referral of business.
This does not mean, however, that gifts are entirely prohibited. RESPA News, sister publication to The Legal Description, spoke with Howard Lax, member, Bodman PLC, about gift giving and the accompanying RESPA issues. Lax says that it can be advantageous to use Regulation X’s marketing exception.
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Escrow officer, four others sentenced in $20M bank fraud
Posted Date: Monday, December 16, 2013
Five defendants, including an escrow officer, were sentenced for a variety of mortgage and loan fraud charges arising out of the collapse of Desert Sun Development (DSD), a company previously headquartered in Bend, Ore.
From 2004 through 2008, DSD built commercial buildings and residential housing throughout Central Oregon. According to the court records, DSD principals and other defendants caused financial institutions to lose more than $20 million.
The sentencing details from Chief U.S. District Judge Ann Aiken are as follows:
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Role of the title agent under new disclosure rules
Posted Date: Monday, December 16, 2013
The Consumer Financial Protection Bureau (CFPB) decided to let the market dictate who was going to be responsible for filling out the new closing disclosure. This is a win for the industry, but may mean more flexibility in the future.
“One thing that I found especially positive is the bureau’s recognition of the vital role that settlement providers provide in protecting consumers at closing,” said Michelle Korsmo, chief executive officer of the American Land Title Association. “In choosing to … allow lenders to continue to work with settlement agents, the bureau said, ‘Settlement agents and closing attorneys play a vital role in the real estate settlement process.’ That is directly from the rule.”
Mary Schuster, president of op2 and vice president of legislative affairs at RamQuest, pointed out that, in the proposed rule, the CFPB provided two options for preparing and delivering the Closing Disclosure. One was that the lender would be solely responsible for the preparation and delivery of the Closing Disclosure form. The second option was that the lender would be responsible for the content but could share the task of preparing and delivering the form with the title and settlement industry. The CFPB validated the role of the settlement agent by choosing option two but made clear that the market is going to need to work out who performs which duties.
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Encrypt for security’s sake
Posted Date: Monday, December 16, 2013
It is important to make sure the information you are sending out is secured. Because of the plethora of personal information being sent via email, it is important that agencies utilize encryption services.
“There is a lot of information that is flowing containing non-public personal information (NPPI) that a consumer doesn’t want to be made public,” said Lee Howlett, of RedVision. “It is difficult when agents are emailing, or transmitting work by faxes or handwritten copies back and forth to make that information secure so no one else sees it and picks it up off a copy machine or off a fax machine. Whenever possible, we strongly advocate that our clients use secure email back and forth with us to place work or utilize XML integrations in order to keep it truly secure and deliver it as encrypted data streams.
“The same thing going back,” he continued. “We always recommend that we’ll integrate directly into a customer’s closing platform. We are integrated into all of the top settlement platforms. All of those escrow platforms are able to receive electronic information. It’s our preference to deliver it that way.”
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Protect your network
Posted Date: Thursday, December 12, 2013
Computer hacking has become a lucrative profession and title agents are easy targets. They hold millions of dollars for consumers and lenders and have very few protections for their networks. For this reason, there are many tools out there designed to help agents protect the funds, and personal information, they are given every day, placing a fortress around their networks.
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Utilize technology to aid in compliance efforts
Posted Date: Thursday, December 12, 2013
Technology has been evolving as a tool for growing business, increasing workflow and improving efficiencies. But, what about using technology as a way to stay safe and remain compliant in an ever- changing regulatory environment? The Legal Description will show you how to utilize your technology’s compliance attributes with the special report: Technology as a Compliance Tool.
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Fed provides guidance on third-party risks
Posted Date: Tuesday, December 10, 2013
Another federal banking regulator released guidance explaining how it expects institutions to manage the risks posed by their third-party service providers. The Federal Reserve released its guidance on Dec. 5, a little more than month after the Office of the Comptroller of the Currency (OCC) unveiled a sweeping set of third-party management expectations. Read on for more details and what industry associations had to say about it.
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Title industry speaks about new forms
Posted Date: Thursday, December 5, 2013
The new mortgage disclosure forms and rule are out and the title industry members are sharing their views on the forms. Read on to find out what they have to say.
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Ohio man indicted for escrow theft
Posted Date: Thursday, December 5, 2013
Ohio Lt. Gov. Mary Taylor announced the sentencing of an Avon Lake title company co-owner. The agent diverted escrow funds for his personal use and was sentenced weeks after his business partner.
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Massachusetts counties sue MERS for unjust enrichment
Posted Date: Thursday, December 5, 2013
Three Massachusetts counties filed suit against the Mortgage Electronics Registration Systems Inc., alleging MERS had been unjustly enriched through the system They sought restitution or disgorgement of the benefits. MERS moved to dismiss the action for failure to state a claim. Read on to find what the Superior Court of Suffolk County had to say when the case went before it.
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Escrow co. sues lender after being declared ineligible for business
Posted Date: Tuesday, December 3, 2013
When a mortgage lender decided to make its licensed escrow agent ineligible to do business with it, the escrow agent sued the bank for intentional interference with contractual relations and prospective economic advantage, unfair business practices, defamation and RESPA violations. The court determined that there could be a viable contractual interference claim but found no viable RESPA violation.
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Compliance, enforcement, pressure points: Are you ready for 2014?
Posted Date: Tuesday, December 3, 2013
The New Year is approaching. Are you ready for 2014’s regulatory environment? The legal publications at October Research, LLC have teamed up to host a 90-minute federal regulatory outlook webinar for mortgage, title insurance and settlement services professionals. Regulatory Outlook 2014: Compliance, Enforcement and Pressure Points airs Tuesday, Dec. 10 at 2 p.m. ET. This in-depth training features two top compliance attorneys who will educate participants on significant regulations impacting the industry in 2014.
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Attorney convicted of fraud involving triple-decker apartments
Posted Date: Tuesday, December 3, 2013
A Pennsylvania man, formerly an attorney practicing in Boston, was convicted of mortgage fraud. The man, a former real estate closing attorney in Boston, participated in at least 13 fraudulent real estate transactions involving triple-decker apartment buildings. Read on for more details.
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Professional liability insurer denies coverage over insurance department complaint
Posted Date: Tuesday, December 3, 2013
A professional liability insurer denied coverage of a claim for defense to a title agent after it discovered the issue being litigated had been addressed previously in a complaint to the Texas Department of Insurance. Read on to find out what the U.S. District Court for the Eastern District of Texas had to say about the issue.
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