02/15/2017

New SOC 1 Standard Goes Into Effect May 1

When service organizations receive a SOC 1 examination, it is performed under the SSAE 16 or “Statements on Standards for Attestation Engagements 16, Reporting on Controls at a Service Organization” standard.

During the Spring of 2016, the AICPA’s Auditing Standards Board (ASB) completed the clarity project, the result of which was the issuance of the SSAE 18 standard, “Concepts common to all Attestation Engagements.” This new standard replaces SSAE 16 for SOC 1 engagements and goes into effect for reports dated after May 1, 2017.

It is important to note that the SSAE 16 standard was specific to service organizations and the SSAE 18 is for all attestation engagements. This means that we can no longer refer to SOC 1 as an SSAE 16 examination and it will not be replaced by the term SSAE 18 examination. Instead, it will simply be referred to as the SOC 1.

Despite the potential for confusion related to the naming of the examinations and reports, the actual changes to what a service organization has to do to prepare for an examination is not extensive. Here are four changes that come with SSAE 18 that affect the SOC 1 examination.

Vendor Management

The most significant change in the requirements that has to be met by a service organization is ensuring that its vendor management program for subservice providers is significantly robust.  SSAE 18 is requiring that service organizations implement processes that monitor the controls at subservice organizations. SSAE 18 provides the following control suggestions:

  • Review and reconcile output reports.
  • Hold periodic discussions with the subservice organization.
  • Make regular site visits to the subservice organization.
  • Test controls at the subservice organization by members of the service organization’s internal audit function.
  • Review Type I or Type II reports on the subservice organization’s system.
  • Monitor external communications, such as customer complaints relevant to the services by the subservice organization.

Risk Assessment

Another change in what will be required by SSAE 18 will be in the area of more specific requirements as opposed to the existing general considerations of risk via a risk assessment.  SSAE 18 requires service auditors to obtain a more in-depth understanding of the development of the subject matter than currently required, in order to better identify the risks of material misstatement in an examination engagement. This, in turn, should lead to an improved linkage between assessed risks and the nature, timing, and extent of attestation procedures performed in response to those risks.

Complementary Subservice Organization Controls

SSAE 16 required that service organizations provide a listing of controls that should be performed by user organizations.

In order to recognize that more organizations are outsourcing key functions to their own set of subservice organizations, SSAE 18 introduces the concept of “Complementary Subservice Organization” controls. This concept establishes and defines the controls for which user entities must now assume in the design of the system description. Another key factor related to these complementary controls is that they are necessary for the achievement of control objectives in the report. SSAE 18 provides more guidance around this area, and will hopefully lead to more consistent reporting across entities and practitioners.

Written Assertion Requirement

The final change to the SOC 1 is the requirement, per SSAE 18, that the service auditor obtains a written assertion. This written assertion is the statement found within the SOC report wherein the service organization asserts that the system description provided is essentially true and complete. This statement has always been contained within the SOC 1 reporting document but the requirement that the service organization signs the document was optional. In practice, the majority of service organizations have already been signing this document, as a way to strengthen the credibility of the report. Accordingly, there will not be significant changes to what either the service auditor or service organization will have to do to meet this requirement.

It is important for you to understand these changes and how it will impact your organization before the standard goes into effect in May 2017.

Sue Wells is a senior manager at A-LIGN and has performed over 200 SOC reviews. She can be reached at sue.wells@a-lign.com

New SOC 1 Standard Goes Into Effect May 1

When service organizations receive a SOC 1 examination, it is performed under the SSAE 16 or “Statements on Standards for Attestation Engagements 16, Reporting on Controls at a Service Organization” standard.

During the Spring of 2016, the AICPA’s Auditing Standards Board (ASB) completed the clarity project, the result of which was the issuance of the SSAE 18 standard, “Concepts common to all Attestation Engagements.” This new standard replaces SSAE 16 for SOC 1 engagements and goes into effect for reports dated after May 1, 2017.

It is important to note that the SSAE 16 standard was specific to service organizations and the SSAE 18 is for all attestation engagements. This means that we can no longer refer to SOC 1 as an SSAE 16 examination and it will not be replaced by the term SSAE 18 examination. Instead, it will simply be referred to as the SOC 1.

Despite the potential for confusion related to the naming of the examinations and reports, the actual changes to what a service organization has to do to prepare for an examination is not extensive. Here are four changes that come with SSAE 18 that affect the SOC 1 examination.

  1. Vendor Management

The most significant change in the requirements that has to be met by a service organization is ensuring that its vendor management program for subservice providers is significantly robust.  SSAE 18 is requiring that service organizations implement processes that monitor the controls at subservice organizations. SSAE 18 provides the following control suggestions:

  • Review and reconcile output reports.
  • Hold periodic discussions with the subservice organization.
  • Make regular site visits to the subservice organization.
  • Test controls at the subservice organization by members of the service organization’s internal audit function.
  • Review Type I or Type II reports on the subservice organization’s system.
  • Monitor external communications, such as customer complaints relevant to the services by the subservice organization.
  1. Risk Assessment

Another change in what will be required by SSAE 18 will be in the area of more specific requirements as opposed to the existing general considerations of risk via a risk assessment.  SSAE 18 requires service auditors to obtain a more in-depth understanding of the development of the subject matter than currently required, in order to better identify the risks of material misstatement in an examination engagement. This, in turn, should lead to an improved linkage between assessed risks and the nature, timing, and extent of attestation procedures performed in response to those risks.

  1. Complementary Subservice Organization Controls

SSAE 16 required that service organizations provide a listing of controls that should be performed by user organizations.

In order to recognize that more organizations are outsourcing key functions to their own set of subservice organizations, SSAE 18 introduces the concept of “Complementary Subservice Organization” controls. This concept establishes and defines the controls for which user entities must now assume in the design of the system description. Another key factor related to these complementary controls is that they are necessary for the achievement of control objectives in the report. SSAE 18 provides more guidance around this area, and will hopefully lead to more consistent reporting across entities and practitioners.

  1. Written Assertion Requirement

The final change to the SOC 1 is the requirement, per SSAE 18, that the service auditor obtains a written assertion. This written assertion is the statement found within the SOC report wherein the service organization asserts that the system description provided is essentially true and complete. This statement has always been contained within the SOC 1 reporting document but the requirement that the service organization signs the document was optional. In practice, the majority of service organizations have already been signing this document, as a way to strengthen the credibility of the report. Accordingly, there will not be significant changes to what either the service auditor or service organization will have to do to meet this requirement.

It is important for you to understand these changes and how it will impact your organization before the standard goes into effect in May 2017.

Sue Wells is a senior manager at A-LIGN and has performed over 200 SOC reviews. She can be reached at sue.wells@a-lign.com

02/01/2017

How to Market Your Title Company Like Beer

Pexels-photo-27892

What in the world does beer have to do with title insurance?

In the early 1940s, Schlitz beer company was one of the least popular beers in the country. So they brought in a legendary marketer, Claude Hopkins, to tour the factory and create a new advertising campaign for them.

Schlitz showed him how they had dug their own wells to get the cleanest water, even though most other brewers used water from Lake Michigan at the time.

They showed him the cooling rooms with filtered air and how they sterilized the bottles not once, not twice, but four times before filling them with beer.

At the end of the tour, he asked why Schlitz wasn’t telling people about all of the ways they make quality beer in their marketing. Their reply was simple: Every brewery makes beer the same way. Hopkins’ predicted that the first brewery to tell people about it would gain a huge advantage over other companies. 

Within a year Schlitz was No. 1 in the country and remained first or second until the 1970s.

With all of the new regulations, the same is true in the title business. Just because everyone has to be compliant doesn’t mean they are using it to effectively market their services.

  1. Best Practices Certified alone isn’t enough: Is your website secure? Do you backup your data offsite? Do you have a clean desk policy? If so, don’t just tell your customers and prospects that you are “ALTA Best Practices Certified.” It’s likely they don’t know what that means. Instead, show them and explain to them why you take extra precautions with their data. For example, you might instead say, "with all of the cyber fraud today, we take extra precautions to safeguard your information," and then list the ways you've implemented best practices.
  2. Mobile website: 86 percent of Facebook's traffic and 55 percent of Google searches now come from mobile devices. Google even penalizes company websites that do not re-format properly on mobile phones by bumping them to the bottom of the search rankings. According to Moz, Google is expected to give even more priority to mobile friendly websites in 2017.
  3. Video rules: YouTube is the second largest search engine for a reason. Video is easier and more enjoyable to consume than text. In fact, 78 percent of people watch web videos at least once per week. Use video on your website to rank higher in search and in social media to explain topics like TRID or Closing Disclosures.
  4. Directory sites: Third-party sites like Yelp, Google Places and Zillow not only often rank higher than your website, they also already have their own traffic, mobile apps and star ratings. Having a listing and a few reviews on these sites makes your brand easier to find and gives you more opportunities for people to do business with you.
  5. Utilize Facebook: Facebook is one of the world's most active websites, and has over 1.7 billion active users, according to CNN. Instead of posting about recent closings, offer to take a picture of your clients at the closing table with their camera phone and then ask them to tag your company in any posts related to their home purchase. Since a home purchase is an emotional post, it is likely to stay active for multiple days—giving you organic exposure and free marketing to all of their In addition, use Facebook's advertising platform to promote your page, website, and events you might be hosting. Their ad platform even lets you target very specific demographics such as "millennials who are in the market to purchase a home within 20 miles of your office that also make over $75,000 a year" for example.
  6. Stay Top-of-Mind: Have you ever found a product on Amazon or a car on a dealership's website, only to see that product or car advertised in your Facebook news feed or on some other website? This is remarketing (also called retargeting). It is a very effective yet underutilized way for you to stay top of mind among real estate agents, lenders, buyers and sellers because you are only advertising to people who are familiar with you and most likely to use your services.

Eliot Dill is co-founder of Title Tap, which provides turn-key websites and marketing tools for title agents and real estate attorneys. To learn more ways on how to effectively market your company, visit www.titletap.com/articles

01/31/2017

How the Title Industry Can Manage Cybersecurity Risk

By Dan Schroeder and Adam Klein

Not so long ago, cybersecurity was something title agents and underwriters considered the domain of the big banks and other high-profile financial institutions. Today, the mortgage and settlement services industry—like virtually every other industry—is clearly under attack.

Phishing scams targeting homebuyers have become so commonplace that the Federal Trade Commission (FTC) issued a warning earlier this year. Ransomware, which locks up the computer systems necessary to execute the time-sensitive mortgage transactions, are causing damage to title agents’ reputations—not to mention the reputations of the other entities involved in the transaction.

Perhaps most devastating for members of the title industry is wire transfer fraud. In the case of one California escrow firm, a series of fraudulent wire transfers to the tune of $1.1 million brought about the downfall of the company. Even if a title agent or escrow firm manages to survive such a cyber attack, the company is almost certain to be considered toxic by underwriters who would have to make those losses whole.

Mortgage lenders increasingly are being scrutinized for their vendor management practices, and they demand assurance from their title agents about how they are protecting the non-public personal information (NPI) that they store or access.

As a result of these emerging cyber risks, title agents have simple questions that demand simple, straightforward answers:

  • How do we protect our business from cyber threats?
  • What do we need to do to comply with financial industry regulations?
  • How do we maintain our banking and underwriting relationships by providing the information these stakeholders need?

What About ALTA Best Practices Compliance?

ALTA Best Practices Pillar 3 calls for a comprehensive written privacy and security risk management program, as do federal and state laws such as the FTC’s Privacy and Safeguards Rules.

But what exactly does such a risk management program look like and entail? Pillar 3 says that “the program must be appropriate to the Company’s size and complexity, the nature and scope of Company’s activities, and the sensitivity of the customer information Company handles.” In addition, the program should evolve as the company’s circumstances do.

So how does an organization—especially a company the size of the thousands of small title agencies—go about designing this “appropriate security risk management program?”

A Roadmap to Cyber-Risk Management

The good news is that cyber risk management does not have to be complex—and, in fact, there is a roadmap for addressing it. This roadmap consists of the following critical tenets:

  1. Identify Digital Assets

Effective cyber risk managementbegins with understanding the relative value of the information that your business holds, and the business impact if those digital assets were compromised.

For title agents, those high-value digital assets are commonly regarded as:

  • NPI on homebuyers and sellers
  • banking credentials that provide access to escrow funds
  • access to the company’s network and applications that can be prevented through ransomware

Compromise of any of these (or other) digital assets can cause significant financial, reputational and operational damage to the title agent, the escrow insurance company, the mortgage lender and the borrower.

  1. Understand the Threats andResultant Risks

Once we understand what we are protecting (i.e., digital assets), we can assess the real threats and risks to those assets.

For example, some of the threats to the digital assets described above include wire transfer fraud and phishing scams. The inherent risks might include loss of escrow funds, being found in breach of a bank contract and potential class action lawsuits brought by individuals whose information was compromised.

Any assessment of threats and risks must be done within the context of the title agent’s business model and industry. A model has been adopted by the financial industry to “help institutions identify their risks and determine their cybersecurity preparedness,” which can be tailored for the title industry. In 2015, the Federal Financial Institutions Examination Council (FFIEC) released its Cybersecurity Assessment Tool (CAT), which consists of two parts:

  • The Inherent Risk Profile helps management determine their exposure across a number of risk categories (for example, delivery channels and external threats) due to the organization’s specific activities, services and products.
  • The Cybersecurity Maturity portion is designed to help management measure the institution’s level of cybersecurity preparedness, with levels ranging from baseline to innovative, within five domains (for example, cyber risk management and oversight, and cybersecurity controls).

The CAT model was designed to be specific to banks and is not a “plug-and-play” tool. However, using their discretion and their understanding of threats and risks to their business, title agents can use this model as a general guide to determine their inherent risk profile. That inherent risk profile, in turn, points to the type of risk management that is appropriate for the title agent and its banking and underwriting partners.

ALTA_Cyberchart

  1. Develop and Implement Appropriate Security Program

As you can see in the chart above, the minimum bar that organizations of any inherent risk level should be prepared to demonstrate is the level of “evolving” controls. Some examples of these controls include a formal cybersecurity program that is based on technology and security industry standards or benchmarks; incorporation of cyber risk identification, measurement, mitigation, monitoring and reporting into that program; and an annual review of the program by an appropriate board committee.

If the nature of the threats and risks demand more stringent controls, title agents can use the CAT as a roadmap to determine the steps required to improve their organization’s cybersecurity maturity and reduce its inherent risk profile.

  1. Ongoing Monitoring and Reporting

The final piece of this security program involves regular monitoring and reporting to drive improvement and provide the peace of mind that title agents are doing the right things to protect their valuable information and systems.

The risk-management approach outlined in this article can be leveraged to strengthen and enhance the ALTA best practices certification program, as well as other forms of assurance reporting, such as the AICPA’s SOC 2 reporting protocol.

Fulfill Banking Requirements, Protect the Business

Following the above roadmap and leveraging the FFIEC CAT, title agencies and their stakeholders are equipped to realistically assess the threats to their funds and NPI and appropriately manage those risks. Not only does this approach fulfill the intent behind Pillar 3, but it also meets or exceeds stringent banking vendor management requirements. nDan Schroeder is partner-in-charge of information risk management and assurance services, and Adam Klein is client relationship executive with HA&W, which is a CPA firm providing services to the title industry.

Dan Schroeder is partner-in-charge of information risk management and assurance services, and Adam Klein is client relationship executive with HA&W, which is a CPA firm providing services to the title industry.

 

Alert: Watch for Fake Dropbox Emails Sharing ‘Closing Disclosure’

Fake Dropbox emails are circulating once again urging recipients to sign in to access and view documents.

Prior to implementation of the TILA-RESPA Integrated Disclosures (TRID) rule, the fraudulent emails were infected with a file called “final HUD-1.”

In this scam, the email says that “You have a new document sent to you ‘Closing Disclosure.pdf”

If you hover over the embedded icon, a Russian URL appears. These phishing attacks are another example of social engineering that easily fools people into sharing login details that open the door to private information. Dropbox is vulnerable to these common attacks as it was not originally designed with enterprise security in mind.

Tips to guard against phishing scams such as this one:

  • Be wary of emails that ask you to view or download files from people you do not know.
  • Also be cautions of emails that ask you to view files on services that you do not subcribe to.
  • Hover your mouse over the URL of links contained in emails to check their destination address. Don’t click suspicious links. To log into a service like Dropbox, open a new web brower and type in the URL manually.
  • Be wary of services that ask you to provide log-in credentials for a number of different email providers. This is a trick scammers use to a widen their phishing net, allowing them to steal details from users.
  • Dropbox has its own webpage that educates readers on how to avoid phishing and malware scams.

You can prevent your business from receiving phishing scams by using cloud-based email-filtering and web-filtering software, which intercepts these emails before getting into your inbox.

ALTA title professionals should be vigilant when receiving and responding to email. To protect yourself, do not open attachments or click links included in suspicious email. You should also not respond or even “unsubscribe” to messages that seem suspicious. Report suspicious email to the Federal Bureau of Investigation Internet Crime Complaint Center.

Here’s a sample of the latest Dropbox email scam:

DropBox Scam (2)

01/19/2017

Latest Email Scam Targets State Land Title Association

While many phishing scams target Realtors and title agents in the hopes of accessing escrow funds, the latest scheme has targeted a state land title association.

Earlier today, the Florida Land Title Association alerted its membership that suspicious email is being sent from its executive director asking to view and sign documents.

ALTA title professionals should be vigilant when receiving and responding to email. To protect yourself, do not open attachments or click links included in suspicious email. You should also not respond or even “unsubscribe” to messages that seem suspicious. Report suspicious email to the Federal Bureau of Investigation Internet Crime Complaint Center.

Examples of the suspicious email:

State LTA scam image 1

State LTA scam image 2

01/12/2017

Respecting the Past, Innovating for the Future

ALTA President Daniel D. Mennenoh Encourages Members to Embrace Innovation and Improve the Customer Experience

Whether it’s his passion for auto racing, telephones, the title industry or his family, Daniel D. Mennenoh is rooted in history. He’s only missed two races at the famed Indianapolis 500 over the past 28 years. His home is filled with antique telephones harkening back to a time of switchboard operators and pay phones. He lives in the historic district of Galena, Ill., notable for the home of Ulysses S. Grant. And he’s the president of a title company originally established in 1883 that now employs the third generation of Mennenoh’s family.

“We must never forget our past as it provides context for who we are, what we’re doing and where we’re going,” said Mennenoh, who was installed as ALTA’s 2016-17 president during ALTA ONE in Scottsdale, Ariz. “With the historical perspective, we can appropriately drive forward and incorporate innovative products to our operations to increase efficiency and improve the customer experience.”

Mennenoh-bowtie
Many members of Dan Mennenoh's family listened to his induction speech during ALTA ONE last year.

As a tribute to his family, Mennenoh wore a red bow tie that belonged to his father, as he gave his induction speech in October. His parents, John and Ann, were active in both ALTA and the Illinois Land Title Association (ILTA) for years and inspired him to do the same.

“My parents always led by example, with the business, with industry participation, with life,” said Mennenoh, who is president of Galena, Ill.-based H.B. Wilkinson Title Company. “My dad is no longer with us, but his wisdom, experience and good humor are sorely missed. As for my mom, she’s not able to stretch a double into a triple anymore, but she’s as sharp as a tack and still has her great sense of humor.”

When Mennenoh attended his first ALTA convention 20 years ago, becoming ALTA president never crossed his mind. To truly appreciate how he reached the pinnacle of ALTA leadership, you need to know his history.

Life Destined in Title?

There were detours in Mennenoh’s career path, but the seeds of a title profession were planted early. During his childhood, Mennenoh’s father worked for Chicago Title in various offices. Eventually, the family moved to Morrison, Ill. That’s when John and his business partner, Grace Shaw, purchased H. B. Wilkinson Company (which is now called H. B. Wilkinson Title Company).

Having grown up with two siblings, Mennenoh recalled parents who were loving, and supportive of their interests, and stressed the importance of education and personal responsibility.

“And there was laughter in the house,” said Mennenoh. “My parents always planned for a family trip during the summer vacation. We took road trips in the family station wagon to many parts of the country every year. We experienced many places and learned much from those trips.”

Dan at indy 2 2003
As avid auto racing fan, Dan attended his first Indianapolis 500 in the 1960s and has only missed two races since.

In addition to playing baseball during his youth, Mennenoh became captivated by auto racing after visiting Indianapolis for the first time in the early 1960s. The trip to Indy was actually to see his grandparents, but the Indianapolis Motor Speedway was open to visitors. That’s where he saw his first race car.

“I think that probably hooked me on motor racing,” he recalled.

As far as education, Mennenoh first attended DeVry Institute of Technology in Phoenix before transferring to Arizona State where he studied electrical engineering. 

“Getting defeated by Calculus 2—twice—I came to the conclusion that maybe engineering was not my calling,” Mennenoh said, smiling.

After college, he spent a summer living with his grandfather, who ran a successful landscaping business on the Chicago North Shore for over 50 years. Mennenoh envisioned learning the business on job sites, but spent most of the time doing accounting and payroll. His grandmother had always handled the office work, but she had passed away in 1974.

“He really needed the help in that area and was a bit behind on things by 1978, so I helped him get his office work caught up and organized,” Mennenoh said.

The time spent organizing his grandfather’s office would pay dividends once he transitioned to the title industry, but first Mennenoh took a job in 1979 with Illinois Bell Telephone Company in Sterling, Ill. As he Installed and maintained pay phones, he quickly realized this wasn’t the right career path.

“I heard a lot of grousing about the job and the company from the fellas I worked with in the field and decided I didn’t want to become them,” Mennenoh recalled.

Timing is everything and that’s when Mennenoh’s father asked if he wanted to give the title business a try. With the possibility of running the operation down the line, title work sounded like a better opportunity than chatting with the phone crew. In 1982, he joined the title company and started doing abstract work, searching tax records, doing plant maintenance, microfilming and recording documents at the courthouse.

“I was even the office janitor for a while,” Mennenoh shared.

Eventually, his math background from college paid off as he started doing some drafting and gained a better understanding of legal descriptions.

“I really enjoyed drawing out legal descriptions and seeing how multiple parcels fit together,” said Mennenoh, who still enjoys this aspect of the job and provides the legal description training at his company.

No Turning Back

From then on, he was hooked on title and had no interest in other careers. “I love what I do,” said Mennenoh, who was named company president in 1996 when he purchased the company along with ALTA past president Greg Kosin after Mennenoh’s father retired.

It’s been a family affair ever since. Working with relatives isn’t for everyone, but it has been successful at H.B. Wilkinson Title Company. His parents provided the perfect example working side by side for many years. In 1997, Mennenoh’s wife, Merry, joined the company and started handling payroll when his mother retired. A few years later, Merry took over general accounting responsibilities and has handled those duties since then. She’s now the company’s chief financial officer. 

“The most difficult part of working together was realizing we had to stop talking about business at the end of the workday,” Mennenoh said. “When we leave the office at the end of the day, we make a conscious effort to not discuss work. We’ve been pretty successful.”

Capitol
Dan and Merry, with their daughter, Devon, with the U.S. Capitol behind them.

The family success now stretches to a third generation. With nine locations that service northwest Illinois, southwest Wisconsin and much of Iowa, the Mennenohs’ daughter, Devon Irby, has used her organizational skills to help the company attain Best Practices compliance. Her expertise has been used to improve the management team’s effectiveness as well as the hiring and training process. And Mennenoh has been able to pass on his father’s training to his daughter as she’s also a good title examiner as well.

“Having had the chance to work with my parents, to learn the title business from them—to learn the importance of not only our industry, but the pride in being a professional and operating a business professionally—is a highlight of my career,” Mennenoh said. “Being able to pass along those things to my daughter and see her professional growth in an industry I truly love is great.” 

Meanwhile, their son, Cody, has helped keep the company's electronic title plant updated for years. "Since it can be done remotely, we’ve had him help with that for some time, and he’s good at it," Mennenoh said.

His parents also influenced his involvement with ALTA and ILTA. His mother served as ILTA’s secretary for a decade, and both understood that their involvement was beneficial to the industry and to their business. Mennenoh served as ILTA’s 1998-99 president. In addition to serving on ALTA’s Board, Mennenoh volunteers on many committees including Finance, Membership and Organization, Nominating, Abstracters/Agents Section, Nominating and Research.

“My parents spent many years attending ALTA conferences and my dad served at the committee level at ALTA,” Mennenoh said. “Becoming involved in ALTA was not a difficult decision for me.”

Mentors and Friends

Starting with his parents, Mennenoh said he’s had many industry mentors over the years. Mennenoh described his father as one of the “best examiners I’ve known.”

“I learned how to manage the operation and how to work with customers and consumers from my parents,” he said. “I learned how to problem solve from them, and I also learned how to successfully train and work with staff.”

Mennenoh recalled several title professionals from his early days in the business who helped provide guidance, including Jim Weston, Jim Costello, John Howe, Chad Nash, Bob Gorman, Mike Troutt and Hartzell Givens.

“There are many people today in the industry, too many to list, that I have great respect for and truly enjoy working with,” Mennenoh said.

Michael Lane, executive director of the Illinois Land Title Association (ILTA), took over management of ILTA from Mennenoh’s mother in 1990. Lane said he knew from the beginning that Mennenoh was destined to do great things in the title business.

“Dan and Merry are terrific people and wonderful ambassadors for the title business,” Lane added. “They also introduced me to hummus many years ago. ILTA is indebted to Dan’s leadership and we know he will offer the same great leadership for ALTA.”

Frank Pellegrini, chief executive officer of Illinois-based Prairie Title and an ALTA past president, came to know the Mennenoh family from the time he started attending title functions in the 1970s. He believes Mennenoh’s strong, steady, and measured perspective that will serve the industry well when dealing with critical issues.

“The three generations of the Mennenohs represent all that is right and strong about families,” Pellegrini said. “They also represent what is so very special about our industry. They care deeply about values, integrity and getting the job done right.”

Herschel Beard, owner of Marshall County Abstract Co. in Oklahoma, met Mennenoh about 25 years ago when volunteering for ALTA committees. Both have continued that service ever since. The two share a common bond of coming from family-run businesses.

Fish
Dan and Merry Mennenoh on a fishing trip with friends in Minnesota.

“I have the utmost respect for Dan and Merry, and for the integrity with which they have operated their company,” Beard said. “I’m confident that Dan will be an outstanding president and will represent us well.”

If you looked up “title professional”  in the dictionary there would be a picture of Dan Mennenoh, according to Mark Bilbrey, president of Old Republic National Title Insurance Co. and an ALTA past president.

Bilbrey met Dan and Merry at an ALTA Annual Convention in the 1990s. The friendship continued through their work with ALTA committees and state associations. Bilbrey described the Mennenohs as “title junkies who live it and love it 24/7.”

“Dan has the correct blend of knowledge, talent and caring to help them thru these moments, he added. “Dan has the gift of friendship.  I always say to have a friend, you have to be a friend. Dan truly meets that standard.”

Strategic Priorities

The president of any large organization is to help set the tone for what the organization will try to accomplish in the immediate future In 2017, ALTA will focus on six strategic priorities to help our members excel in a dynamic business and regulatory environment. These main areas will focus on:

  • Best Practices
  • Communicating with homebuyers
  • Core industry values
  • Information security
  • Talent focus & business basics
  • TRID

Mennenoh believes one of the most pressing challenges to the industry—particularly for smaller companies—is balancing the needs of a responsibly run title agency with the additional cost of reaching an acceptable level of compliance to meet lenders’ requirements. 

“The lack of guidance from the CFPB to lenders on their vendor management responsibilities is hurting smaller agencies and will ultimately hurt consumers—particularly in rural areas of the country if those smaller, rural agencies are no longer able to remain viable. The result will be that those consumers will no longer receive the level of local service they want and have been getting for decades.”

While he knows that many national companies promote their ability to service every county in the country, Mennenoh firmly believes consumers in rural counties want local market knowledge and a personal touch. Even with the advancement of technology, real estate remains a local business “best served by local companies,” he said.

“If we lose that component of the title insurance and settlement services industry, the effect on our industry and on consumers will be very negative,” Mennenoh said. “ALTA has been consistently pressing the CFPB for clearer guidance in this area and must continue to do so, along with our lender partners and other trade associations. I hope the CFPB will ultimately realize their lack of guidance is detrimental to consumers, the economy and to an entire delivery system that has worked well for a very long time.”

Mennenoh_bustos_1
Dan and Merry Mennenoh along with other title professionals from Illinois meet with U.S Rep. Cheri Bustos during ALTA’s Federal Conference.

Mennenoh is focused on continuing the growing participation of ALTA membership through education, the Homebuyer Outreach Program (HOP), cybersecurity and advocacy. Having seen tremendous gains in recognition by legislators and regulators over the past several years, it’s important to keep that momentum going, he said, while also promoting the benefits the industry provides to the economy and providing peace of mind by protecting consumers’ property rights.

“No one else will do that for us,” he said.

Innovating and Driving Forward

Innovation is one of the topics that intersects with most of the association’s strategic priorities. Quoting Thomas Edison, Mennenoh said “there’s a way to do it better—find it.” He encourages the industry to be more innovative and explore better ways to serve customers and explain the industry. Doing so, doesn’t necessarily mean spending more, Mennenoh said. There are plenty of tools provided by ALTA such as the HOP, free education Title Topics webinars and committees that can keep staff engaged and informed of changes that are occurring.

ALTA members across the country are joining together to find ways to solve current problems and address challenges. This will lead to creative ideas that will ultimately benefit the industry’s customers.

“For those who may feel that our business is changing so much that our future in the industry may be difficult to see, we have to look at this as an opportunity to innovate,” Mennenoh said. “We’ve seen change before and we’ll continue to see change. Technology has driven a lot of change, some good, some not so good, but finding a better way can be very exciting. We want to innovate and find solutions to ensure all ALTA member companies have the tools they need to thrive in this rapidly changing market.”

Mennenoh compared life and business to the laps an Indy 500 winner must make in order to drink the famed milk.

“In a lot of ways, life and business are a race track,” Mennenoh said. “Both often leave you feeling like you’re going in circles. But every lap can be different. Conditions can change. Other racers improve their cars so that they go faster and handle the turns better. As an industry, we must be prepared for change and understand where innovation can improve our processes. From conducting title searches and sharing data to the closing table and recording documents, there’s new technology being introduced. At the end of the day, however, our core values remain the same. We are here to protect property rights and close transactions efficiently and compliantly. I am truly honored to serve as ALTA’s president. We’ll work hard to ensure our members have the tools to succeed.”  

Jeremy Yohe is vice president of communications for the American Land Title Association. He can be reached at jyohe@alta.org.

01/05/2017

Scam Alert: ALTA Mailing Database

ALTA would like to inform its members about fraudulent emails coming from marketing firms indicating that they are selling contact information of companies listed in ALTA’s database.

The email scam asks if the recipient would like to acquire an ALTA list. This scam claims it includes lists for title insurance companies and title abstractors. Mailing list scams try to snag unsuspecting businesses with offers of lists of potential new clients.

ALTA has not provided its list to these companies. Lists can only be legally acquired after ALTA approves marketing pieces that are to be physically mailed to offices. ALTA prohibits anyone other than the association from calling and emailing companies on the ALTA membership list for marketing purposes.

ALTA is reaching out to the domain registrars to alert them of the abuse. This type of advertising violates the federal Lanham Act. ALTA also plans to report the fraudulent domains to the Federal Bureau of Investigation Internet Crime Complaint Center.

To protect yourself, do not open attachments or click links included in suspicious email. You should also not respond or even “unsubscribe” to messages that seem suspicious.

Here's an example of the fraudulent email:

Email_scam

12/20/2016

MBA Cuts 2017 Q1 Origination Forecast

Following the Federal Reserve’s decision to raise rates a quarter point, the Mortgage Bankers Association (MBA) lowered its origination forecast for the first quarter of 2017.

“We have adjusted the path of interest rates upwards a bit more quickly in 2017 reflecting the fact that the recent rate increase following the election has been sustained,” the MBA reported.

Forecast Commentary Dec 2016The total volume of one- to four-family mortgage loan originations is expected to reach $352 billion in the first quarter, according to the MBA’s December Mortgage Finance Forecast. This is down from the $365 billion in first-quarter volume the MBA had predicted in November. The lower forecast remains higher than the $350 billion in origination volume recorded in the first quarter of 2016.

The biggest drop off will be experienced in the refinance channel as rates have moved higher, forcing a more rapid decrease in an already slow refinance market. The MBA reported that refinance volume is now expected to reach $140 billion in the first quarter, down from the November forecast of $145 billion. The MBA also projected that purchase origination volume will total $212 billion, down from its prediction of $220 billion last month.

“We still forecast $1.10 trillion in purchase mortgage originations during 2017, an 11 percent increase from 2016,” the MBA reported. “Strong household formation coupled with further job growth, rising wages, and continuing home price appreciation will drive growth in purchase originations in the coming years.”

12/13/2016

What’s Your One Thing for 2017?

By Michelle Korsmo

We are busy. Every one of us can talk about being bombarded by emails, phone calls, texts, and meetings. The various and simultaneous demands distract us from our most important work—if we even take the time to think about what our most important work should be. While we all want fewer things sidetracking us, there’s an innate desire to do and achieve more. It’s a perplexing dichotomy.

In the book The One Thing, Gary Keller details how to limit the distractions and achieve more. His book opens with an ancient proverb that says “If you chase two rabbits, you will not catch either one.” So true. What follows is a simple path to achieving results for what is most important to you. It resonated with me when I thought back on times when my work has been effective.

Think about times when you have excelled. You’ve probably achieved great success when you narrowed your concentration to one thing. Results were likely muddled when your focus wandered.

Defining your One Thing isn’t easy. It’s hard to let go of the things we’ve convinced ourselves that matter. This extra noise blurs our thinking and sidetracks success. Everything that must be done is not equal. The book encourages us to avoid being “busy,” and focus on being productive. Robert Koch highlights this philosophy in his book The 80/20 Principle, based on the Pareto Principle, which asserts that “a minority of causes, inputs or effort usually lead to a majority of the results, outputs or rewards.” What does this mean to you? The majority of what you want will come from the minority of what you do. So, a to-do list can become a success list if it’s prioritized.

As your trade association, there are many issues we could focus on. But to be effective, as the One Thing stresses, we must narrow our attention. To do this, ALTA’s Board of Governors and executive team develop our strategic priorities each year. This is our One Thing. By constantly returning to the strategic priorities, the entire association is focused on the key topics that will affect our members in their business and regulatory environment.

So, what’s your One Thing? We’d like to hear from you. Here are a few questions to help you get focused:

  • What’s the One Thing I can do to relieve my stress?
  • What’s the One Thing I can do to further my career?
  • What’s the One Thing I can do to make my company more competitive?
  • What’s the One Thing I can do to improve our customer experience?

By cutting through the clutter and concentrating on what really matters, you’ll achieve exceptional results. Strive to prioritize. The rest will fall into place. Success is built sequentially—One Thing at a time.

1027875Michelle Korsmo is ALTA’s chief executive officer. She can be reached at mkorsmo@alta.org.