ATG’s Birnbaum Takes the Ring to Support Mercy Home Boys & Girls

Peter J. Birnbaum, president and CEO of Attorneys’ Title Guaranty Fund Inc. will jump in the boxing ring to help support Mercy Home for Boys & Girls, an organization that provides homes, education and support systems to Chicago’s most vulnerable and disadvantaged youth.

Along with other contenders from the financial services and legal professions, Birnbaum will participate in a boxing match at Mercy Home’s fundraiser, “Ringside for Mercy’s Sake,” on Oct. 14. He is matched up against Quarles and Brady Managing Partner Paul Langer.”

LI-MercyHomeBenefit2017While ATG is a longtime supporter of Mercy Home for Boys & Girls, this is the first time one of its executives has duked it out at the annual fundraiser. One expects to see attorneys of Birnbaum’s caliber in the boardroom or in the courtroom, but in the boxing ring?

"ATG stalwart Ernie Codilis introduced us to Mercy Home several years ago,” said Birnbaum, who joined ATG in 1981 and was named president and CEO in 1991. “Mercy Home is a citadel protecting and keeping safe some of the most vulnerable children in Chicago. Supporting Mercy Home helps me pursue my personal mission to protect children and is in keeping with ATG's mission to support our community by helping those most in need. Having turned 60 this year I wanted to do something outside my comfort zone. By squaring off against Paul Langer, a cagey veteran boxer, a true gentleman and an outstanding trial lawyer we will (hopefully) give the crowd a good fight and raise significant money for a charity we both love.”

 Since its founding 130 years ago, Mercy Home has broken the cycle of neglect and abuse for over 30,000 kids through residential programs, aftercare, referral and monitoring services. Nearly 98 percent of Mercy Home’s $32 million annual budget is privately funded through the support of corporations, foundations and individuals. The organization receives no contributions from state or federal governments.

“I am pleased for this opportunity to support this very worthy Chicago organization that provides hope, healing and a fresh start for over 750 at-risk youth each year,” Birnbaum added. “The need now is greater than ever.”


CoreLogic Reports Jump in Mortgage Fraud Risk

The risk of fraud in mortgage applications increased 16.9 percent in the second quarter compared to the second quarter of 2016, according to CoreLogic’s latest Mortgage Fraud Report.

The analysis found that during the second quarter of 2017, an estimated 13,404 mortgage applications, or 0.82 percent of all mortgage applications, contained indications of fraud, as compared with the reported 12,718, or 0.70 percent in the second quarter of 2016. The CoreLogic Mortgage Fraud Report analyzes the collective level of loan application fraud risk the mortgage industry is experiencing each quarter.

Fraud risk

The report says that the continued shift to a purchase market is a key factor in the rise in application fraud risk due to stronger motivations and increased opportunities to commit mortgage origination fraud. A second factor leading to the fraud risk was a 48 percent increase in the share of loans originated through wholesale channels, the report found. According to CoreLogic, wholesale applications have shown a higher risk level than retail channels.

“This past year we saw a relatively large increase in the CoreLogic National Mortgage Application Fraud Index,” said Bridget Berg, principal, Fraud Solutions for CoreLogic. “If the factors that influenced the increase continue, including a shift to purchase transactions and growing wholesale channel origination activity, it is likely that mortgage application fraud risk will continue to rise as well. Fraud on cash-out refinance transactions and home equity loans may become more of a factor in the coming years as home values and equity rise.”

According to the report, New York has the highest level of application fraud risk. Florida, which held the top spot for the last several years, dropped to number 3, thanks to a 3 percent decrease in application fraud risk from 2016.

States with the greatest year-over-year growth in risk include:

  • Iowa
  • Indiana
  • Missouri
  • Louisiana
  • Idaho.

According to the report, although they have the highest growth in risk, except for Louisiana, the other four states are still outside the top 25 in terms of overall risk.

CoreLogic found that Jumbo refinance loans are the segment showing the greatest fraud risk increase by loan type.

Occupancy Fraud Risk

  • Up 7 percent
  • This fraud occurs when mortgage applicant deliberately misrepresent their intended use of a property (primary, secondary or investment)
  • States with largest YOY increase: Hawaii, Colorado, Nevada, Montana and Nebraska

Transaction Fraud Risk

  • Up 3.9 percent
  • This fraud occurs when the nature of the transaction is misrepresented, such as undisclosed agreements between parties and falsified down payments. This risk includes third-party risk, non-arm’s length transactions and straw buyers
  • States with the largest YOY increase: South Dakota, Wyoming, Montana, New Hampshire and North Dakota

Income Fraud Risk

  • Up 3.5 percent
  • This fraud includes misrepresentation of the existence, continuance, source or amount of income used to qualify.
  • States with largest YOY increase: Alaska, Indiana, Maine, Alabama and Utah

Property Fraud Risk

  • Down 1.9 percent
  • This fraud occurs when information about the property or its value is intentionally misrepresented.
  • States with largest YOY increase: Wyoming, Washington, D.C., Vermont, New Mexico and Indiana

Undisclosed Real Estate Debt Risk

  • Down 2.7 percent
  • This fraud occurs when a loan applicant intentionally fails to disclose additional real estate debt such as mortgages and real estate taxes.
  • States with largest YOY increase: North Dakota, Nebraska, Iowa, Wyoming and Indiana

Identity Fraud Risk

  • Down 7.3 percent
  • This fraud occurs when an applicant alters, creates or uses a stolen identity to obtain a mortgage.
  • States with largest YOY increase: Maine, Alaska, Michigan, Montana and South Dakota

Multi-Closing Fraud Risk

According to the report, multi-lien fraud is a profitable scam that takes advantage of the lag between closing and recording to solicit multiple loans on a property. A spike in this fraud risk was reported in 2014. This activity decreased in 2015 and 2016, but CoreLogic projects this to increase in 2017.

The Importance of Educating Clients About the Threat of Wire Fraud

By Preston Guyton

Wire fraud is a serious concern, and it can happen during a real estate transaction. One of the best things real estate professionals can do for their clients is educate them on how this happens, how common it really is and how clients can protect themselves from the dangers. By doing that, many clients will be safer and the chances of them becoming victims of wire fraud during their transaction will be greatly reduced. Additionally, this builds more trust between clients and real estate professionals, as they work together to complete valuable and important transactions.

How Common is Wire Fraud in Real Estate Transactions?

Wire fraud in real estate transactions is more common than most people think. At the Idea Exchange Council for Brokers, NAR General Counsel Katie Johnson asked a large group of real estate professionals whether they had any clients who had been victims of wire fraud. She also asked whether they knew of other agents who had clients who had been victims. Over one-third of the agents raised their hands indicating that they either had clients who were victims or knew other agents who had clients who were victims.

While the NAR Council was not an extremely large sample size, this indicates that many real estate professionals have had clients who have been affected by wire fraud scams. These scams take millions of dollars from unsuspecting consumers each and every year, and the problem is only becoming larger. Fortunately, a good understanding of how this takes place and strong communication with clients about how to avoid it can reduce the risk. In time, this may become far less of an issue for clients and real estate professionals than it is today. That could save millions of dollars and protect real estate clients, allowing them to safely buy their homes without fear of wire fraud and related scams.

How Does Real Estate Transaction Wire Fraud Happen?

Wire fraud happens in real estate transactions in a way that is deceptively simple. Hackers who are looking to commit this type of fraud break into email accounts. Then they look through messages in those accounts for anything related to a current, ongoing or upcoming real estate transaction. When they find something, they send a message that looks like it comes from the real estate agent, closing company or mortgage company. They provide “new” wire instructions for where the money is supposed to go.

Once the money is sent, there is nothing that can be done about the fraudulent information, because the hackers are very hard to track. (For more on this, you can check out the TitleNews article "Phishing for Wire Transfers") Not only does this cost buyers a lot of money every year, but it also keeps them from closing on the homes that they had intended to buy. That's a very unfortunate situation for everyone involved.

What Are the Best Ways to Protect Real Estate Clients From Wire Fraud During Transactions?

To help keep clients safe, industry professionals can:

  • Create a standard warning about these scams and build it into the signature line of their email to help raise awareness
  • Be clear about communication practices for every transaction
  • Call clients immediately before any legitimate wire transfer, so they know it's going to the right place and people
  • Avoid free wi-fi when doing anything sensitive, so information can't be captured as easily
  • Use strong passwords, and make sure those passwords get changed frequently
  • Employ someone who handles and monitors security systems for the real estate firm to reduce the risk of being hacked

With the right education and information, real estate professionals and clients can work together to have good transactions that are free from wire fraud and other forms of hacking and theft. 

Preston Guyton is broker in charge and managing partner of CRG Companies. He can be reached at www.sellingmyrtlebeach.com/


Find Your ‘What If?’ at ALTA ONE

How do you empower yourself and your co-workers to be the best they can be? As a Hall of Fame international keynote speaker, author, comedian and world-class guitarist, Mike Rayburn is an inspirational thought leader and one of the most in-demand and un-conventional keynote artists in the world. Drawing from his success as an entrepreneur as well as a Carnegie Hall headliner, Rayburn is a master at increasing profitability and impact by inspiring your team to become possibility thinkers and virtuoso performers … all by daring you to ask the question, “What if?” Register for ALTA ONE and join us in Miami and you’ll leave you with a powerful tool in your memory that will produce immediate results and permanent improvement.

TRID Allows for Partial Exemption for Housing Assistance Loans

Housing finance agencies (HFA) offer individuals, families and businesses a wide range of support in realizing their dreams. Loans provided by housing finance agencies or by private creditors who partner with housing finance agencies that extend credit within the guidelines of HFA programs are low-cost, non-interest bearing and subordinate- lien loans. These loans allow middle to low income families obtain a mortgage for which they would have otherwise have trouble qualifying.

As of Oct. 3, 2015, the TILA-RESPA Integrated Disclosure Rule (TRID) required that lenders issue disclosures to consumers in most residential mortgage transactions. In order to be less onerous on lower risk loans, the TRID rule allows for a partial exemption from the disclosure requirements. On July 7, the Consumer Financial Protection Bureau (CFPB) amended the qualification requirements for the partial exemption for housing financing loans and down payment assistance loans—an act which the bureau believes will make the program more flexible and encourage its use.

In order to qualify for the partial exemption, the loan must be amortizing, forgivable and include fees that cannot exceed 1 percent of the principal of the loan. Previously, the 1 percent threshold included recording fees and transfer taxes. The CFPB amended the rule to exclude recording fees and transfer taxes from the 1 percent threshold.

Proponents of the amendment persuasively argued that excluding recording fees and transfer fees from the 1 percent calculation will make the program more flexible, and thus, increase the amount of HFA loans disbursed. The bureau believes that statutory predetermine fees do not pose a risk sufficient enough to warrant its incorporation since it is not determined by the market. Since recording and transfer fees are predetermined fees set by state and local jurisdictions—and not the market, there is limited risk in excluding it from the 1 percent threshold calculation.

The bureau believes that excluding recording fees and transfer fees will increase the availability of low-cost, non-interest bearing, subordinate-lien loans to low- and moderate-income borrowers.

Click here for more information.


ALTA Registry: Be Part of the Solution


In 1878, New Haven, Conn., became home to what is considered the world’s first telephone directory, consisting of a single piece of cardboard that included listings for 50 individuals, businesses and other offices in the city of 150,000 people.

While other businesses had used telephones before—even printing lists of subscribers—the New Haven version claim to primacy rests on the fact that it was the first such list to include private customers as well as business lines.

This phone “book” did not list telephone numbers, only names. Early telephone directories existed solely for the purpose of alerting customers to the existence of other telephone subscribers. To make a call, the telephone user would pick up the phone and tell the operator the name of the person to ring up.

In the title and settlement space, there has never existed an online, searchable database that could be used to identify title and settlement agents and real estate attorneys early in the real estate transaction. Until now. ALTA Registry Infographic 1 - 2017 (1) copy

ALTA has created an online phone book—the ALTA Registry—a first-of-its-kind industry utility that allows lenders to know they are working with the correct company. Beginning Oct. 1, agents and underwriters will work together to communicate and confirm company name and contact information—providing lenders with a trusted utility to identify transaction partners.

“Mortgage lenders, title insurance agents, real estate attorneys, title insurance underwriters and other participants in the real estate closing process must be able to identify each other and communicate in a timely and consistent manner throughout the mortgage transaction,” said Michelle Korsmo, ALTA’s CEO.

Similar to finding someone’s number in a phone book, the national ALTA Registry is a snapshot of information. You may find a house you like on Zillow, but you would still call your real estate agent to see if it’s still available and if the price has dropped, according to Korsmo. The ALTA Registry database lists a business and its accurate information at the time of confirmation by a title insurance underwriter. 

The ALTA Registry offers a unique seven-digit identifier, the ALTA ID, which is automatically assigned to each new database record as a permanent ID number and is never changed, reassigned or reused. This is the number assigned to all records within the ALTA Registry. For organizations with a network of branches, each office location will have its own ALTA ID and may be connected to the HQ or head office location, called a “primary business location” with no requirement for consecutive or numerically correlated ALTA ID numbers. ALTA ID numbers are available for free to title agents and real estate attorneys. 

“ALTA estimates there are nearly 30,000 title and settlement companies, and real estate attorneys in the United States,” said Eddie Oddo, co-chair of the ALTA Registry Committee and vice president of corporate business solutions for First American Title Insurance Co. “Establishing and confirming a business on the ALTA Registry helps ensure more efficient communication among all parties in the real estate transaction.  Lenders, underwriters, agents and vendors can easily and confidently identify the right settlement provider across each of their databases—something our industry needs but has struggled with in the past.”

Independent escrow companies will not have their companies listed in the ALTA Registry. These entities do not have formalized relationships with title insurance underwriters, making it complicated to confirm their company name and location(s).

Lenders want this type of service from the industry in order to confirm the identity of the service providers that they, or their customers, have engaged to provide settlement services. Having a registry also helps lenders ensure their risk-management procedures are met and will provide further depth to their third party supplier oversight activities.

Jack Rattikin, the other co-chair of the ALTA Registry Committee and president of Rattikin Title Company, said that mortgage lenders need confirmation earlier in the real estate transaction that they are doing business with the correct title and settlement company or real estate attorney.

“The ALTA Registry is a tool for your company to show your mortgage lender you are a part of the solution to provide more clarification and transparency in the real estate transaction,” he said. “In addition, the registry helps mortgage lenders add an extra layer of confirmation that they are working with the appropriate title and settlement company or real estate attorney and properly protecting their consumers’ non-public personal information.”

What You Need to Do

  • Visit alta.org/registry to see the latest news and announcements, including launch date details.
  • Title and Settlement Agents: On-boarding begins in October. Title agents will be able to review their existing ALTA records and add any missing records. Once records are reviewed and updated, a company contact person may request an ALTA Registry listing via the ALTA Registry Management System (RMS) section of the ALTA website. Underwriters will review and confirm title agent requests before listings are published in the ALTA Registry. It’s important to note that only agents that have been confirmed by at least one underwriter will be listed in the ALTA Registry.
  • Real Estate Attorneys: On-boarding will begin in January 2018. Attorneys will be able to request a listing by submitting attorney licensing information as confirmation. Attorneys who are title agents should be confirmed by their underwriter(s) and listed as title agents.
  • Underwriters: On-boarding began in July 2017, and is ongoing. Underwriters who want to confirm agent listings participate in an on-boarding process so they will be ready to confirm agent listings.

What the ALTA Registry Is NOT

The ALTA Registry is NOT a verification system.

  • Google Earth can’t verify real-time accuracy in its maps, neither can the ALTA Registry. The registry confirms that as of the date provided a title or settlement company or real estate attorney maintained a business at the listed address.
  • The ALTA Registry is not the equivalent of a Closing Protection Letter (CPL); the ALTA Registry does not provide an authorization to proceed with a transaction.
  • The ALTA Registry does NOT confirm optimized risk management practices.
  • ALTA does not certify Best Practices compliance and neither does the ALTA Registry. Participation in the ALTA Registry shows that the title or settlement company, or real estate attorney wants to be part of the solution to provide more accurate data and a more efficient real estate transaction.
  • The ALTA Registry does not confirm that a business has optimized its risk management practices in accordance with individual title insurance underwriter or mortgage lender requirements.



2017-18 Nominations for ALTA Board and Executive Committees

2017-18 ALTA nominations

Finalized TRID Rule Applies to All Residential Deals Involving Cooperatives

In July, the CFPB finalized a uniform rule regarding the application of the TILA-RESPA Integrated Disclosure (TRID) requirements for cooperative units

Under the existing rule, coverage of cooperative units depended on whether cooperatives were classified as real property under state law. Cooperatives are sometimes treated as personal property under state law and sometimes as real property. Because state law sometimes treats cooperatives differently for different purposes, there was uncertainty and inconsistency in the manner in which lenders would classify these transactions. This could lead to potential liability. The final rule extends coverage to include all cooperative units without regard to the state level designation of cooperatives. In the final rule, the bureau reiterated that TRID does not apply to loans for business, commercial or agricultural purposes.

The official effective date of the amendment is Oct. 10, 2017, but the CFPB said there is an optional compliance period in effect until Oct. 1, 2018.



Stop. Drop. And Think Differently.

By Wayne M. Stanley

Stop what you’re doing and listen closely: I can provide countless lists of fantastic steps you should take to make your marketing better. I can give you solution providers, even mention my own company, to brand yourself better. I can even tell you the secrets of your competitors to help you gain market share.

Even with all of that “help,” the single greatest tip I can give you is this: stop. drop. and think differently. The biggest mistake I see most title companies make in their marketing is not asking if it’s working. They don’t take the time to take a step back, assess their efforts and see what changes they could make to move their business forward.

Now, you may be wondering, “but how in the world would we even know if our marketing is working?” Well, now that you’ve stopped, drop by and simply ask the very people that you’re spending money on. If you’re hosting real estate agent continuing education classes, ask them at the end about your brand. Why do they give you business? Why do they (maybe) hesitate to give you business? (I didn’t promise this process would be easy).

Do their answers match up with your brand? Do your efforts create results compared to all the money you’ve spent trying to tell your story this year? If not, it’s time to think differently.

Title companies shouldn’t be afraid to break the rules when it comes to the dollars they spend on marketing. Think differently about your marketing and constantly ask “why?”

Why are you spending money on pens? Why do you sponsor this event? Why do you host expensive lunch and learns? Why do we have a budget line for donuts?

If the answer is “because we’ve always done it that way” or “because [insert name here] likes it” or my favorite, “because [insert name here] really enjoys doing it…” then it’s time to re-think your strategy. If the money you spend doesn’t help bring more money in, it’s simply not worth your effort.

Sure, it takes time, brain power and a lot of energy to think differently and truly change but it’s totally worth it.

I challenge our clients to spend just one afternoon thinking about their current marketing efforts and identifying one way they could use the funds or staff time differently for a better result. The solutions these teams come up blow me away and lead to greater return on their investments time and time again.

So, what are you waiting for? Stop, drop and think differently today.


Wayne M. Stanley is the owner and chief inspiration officer for Bowe Digital, a marketing firm helping small businesses with their brand, social media and crisis communications. Stanley, along with Bill Svoboda of Close Simple, will speak more in depth about this topic during a session titled "Break the Rules: Market Better than Your Competition” at the ALTA ONE. Click here to register.


Paper is the Past

By Tim Anderson

Today, digital technology is driving more of the loan transaction away from paper to online. The industry is realizing that it’s time to get the paper out of our systems and manual processes. Paper documents take more time to process, require more people to validate, and key information from and follow-up efforts to track down missing pages, signatures, or total file loss.

For example, delivering a correct closing disclosure (CD) to the borrower three days before closing highlights just how difficult it is to get everything right and on time in a paper world.

Ensuring proof of compliance on confirming something like receipt of delivery is next to impossible in a paper world. Taking the mortgage process fully electronic will be the only way to ultimately ensure a totally verifiable, auditable compliant process.

Beyond the improvements gained by eliminating the paper process, digital collaboration during the loan transaction promises a better consumer experience from the start. For lenders, the increase in operational efficiencies and consistency are measurable. Overall, a digital process ensures greater data and document integrity, compliance and control.

Digitizing the mortgage process has the potential to greatly improve both productivity and the customer experience. Lenders who incorporate a digital workflow gain efficiency, better satisfy borrower expectations for collaboration and communication, and ultimately capture more market share.

    • Go from a 50-minute to 15-minute closing
    • Eliminate last minute surprises at the closing table
    • Significantly reduce time and cost
    • Close without exceptions
    • Ensure a “consistently clean and clear” closing every time
    • Better authentication and security (reduce fraud)
    • Tamper evident seal on data and documents to protect data and document integrity
    • Differentiates yourself in the marketplace
    • Ensure greater service
    • Ensure better loan quality and compliance

The technology is available and the process, albeit not widespread, is gaining momentum. Selling something that everyone else already does and has makes it a commodity. Digital Mortgages are for those that want to introduce a new way of doing business that gives you a competitive market advantage. It presents a new opportunity to truly differentiate yourself in an otherwise crowded  mortgage market. With immense regulatory pressure looming, historical methods will no longer be sufficient. And, as more organizations discover the demands of the marketplace, and today’s borrower, more parts of the lending transaction will happen electronically.


Tim Anderson is Director of eServices and oversees eCommerce and eMortgage service capabilities for DocMagic, Inc. Anderson, along with Vicki DiPasquale and Jack Rattikin, will speak more in depth about this topic during a session titled "Going Digital from Start to Finish” at the ALTA ONE Convention. Click here to register.