At one time or another, every title agent has felt the conflicting pressures of lender, underwriter and borrower obligations. And 2011’s defalcations, new regulations, robo-signing fiasco, expanded closing protection letter (CPL) liabilities and generally poor economy have made it even more difficult for closers to balance their responsibilities with customers and consumers. What are the current pressures and how can title agents manage a transaction to ensure all parties involved remain satisfied?
On Jan. 25, The Legal Description is hosting a Webinar titled, “The Closer’s Balancing Act: Underwriter, Borrower and Lender Obligations.” Beginning at 2 p.m. ET, this 90-minute training program will educate closers on the expectations, liabilities, obligations and protections that come into play when conducting a transaction. The Legal Description invites all title professionals to join its all-star panel, who will cover important legal issues currently affecting title insurance, how these challenges have changed the dynamics of the closer’s relationships and how to combat the difficulties in order to keep the underwriter, borrower and lender satisfied throughout the transaction.
Mark Davenport, founder and partner of Dallas-based Figari & Davenport LLP, who has defended numerous title insurance underwriters and agents in loan fraud litigation initiated by lenders, will give an overview of the fraud problem nationwide using current FBI reports and charts; describe the current scams and explain how they work; point out red flags in the title and loan files; and make suggestions of what closers should do when these types of issues arise.
“Even though lenders have now mostly abandoned the lax underwriting practices and products utilized by subprime lenders that fueled the housing bubble, mortgage fraud continues to be a problem that requires continued vigilance by closers,” Davenport said. “This is especially true where lenders have expanded the breadth and complexity of their closing instructions in attempts to make title insurance agents and underwriters responsible for closing transactions tainted by fraud.”
John Killea, executive vice president and general counsel of Stewart Title Guaranty Co., will discuss the quandary underwriters face given substantial defalcation losses over the last several years. He will look at how the industry got there, what red flags underwriters look for and how underwriters are currently combating the problem. He will also review the current American Land Title Association Closing Protection Letter and explore the expanded theories of liability under CPLs.
“As defalcations have produced historic losses over the last several years, the industry has to take a fresh look at how it can best protect consumers and lenders from this significant threat,” Killea said.
Frank Pellegrini, chief executive officer of Illinois-based Prairie Title, will discuss the duties of the agent to the underwriter, handling difficult lender requests, the unauthorized practice of law and numerous other agent responsibilities, while Bruce Ramge, director of Nebraska Department of Insurance, will close the program with important information about the agent’s liability to the borrower, including contractual obligations.
“The Webinar will be an excellent opportunity for reaching out to closers and title insurance professionals about the regulator perspective on closings,” Ramge said. “Opportunities like this are an excellent way for regulators as well, to keep in touch with issues that impact the title insurance business. I look forward to this event.”
Specifically, the featured speakers will instruct on:
- The title agent’s liability to the lender and fulfilling the lender obligation;
- Mortgage fraud and red flags on the settlement statements;
- When you should stop a closing in its tracks and what to do if suspicious circumstances should arise;
- Fiduciary duty;
- How new legislation and regulations are impacting the lender/closer relationship and handling difficult lender requests;
- Unauthorized practice of law issues;
- Expectations of the underwriter and addressing the problems between underwriters and agents;
- How underwriters have reacted to the recent agent defalcations;
- Liability for CPL loss, CPL cases and theories of CPL liabilities that are expanding by the minute;
- Underwriter liability for the agent’s work;
- Expectations of the borrower; and
- Contractual obligations provisions under state law and best practices to follow.
The closers’ duties are truly a balancing act, as they are always walking that fine line to keep the lender, underwriter and borrower at ease through various points of the transaction. And many factors can play into how a closer fulfills its obligations. Join us for this important Webinar. Register today and you will learn about these important topics and how to better fulfill your obligations as a closer.