ALTA CEO Testifies during CFPB Field Hearing on Integrated Mortgage Disclosures

Michelle Korsmo, ALTA’s chief executive officer, testified Wednesday during a field hearing in Boston as the Consumer Financial Protection Bureau addressed its “Know Before You Owe” project and released its final rule for integrated mortgage disclosures. Check out video of her testimony:


Three Things to Prepare Now for New Integrated Mortgage Disclosures

It’s been several months since the comment period to the Consumer Financial Protection Bureau’s proposed rule to integrate mortgage disclosures required under the Real Estate Settlement Procedures Act and the Truth In Lending Act.

The Bureau has proposed a new Loan Estimate and Closing Disclosure that will replace the current Truth in Lending (TIL), Good Faith Estimate (GFE) and HUD-1 Settlement Statement.

The industry is now in a waiting period before the CFPB issues its final rule, which is expected to happen sometime before the end of the year. In the meantime, there are several things can title professionals do now to prepare, according to Leslie Wyatt, director of industry relations for SoftPro.

Wyatt said that it’s not likely much will change from the proposed rule to when the CFPB issues its final rule. Title professionals should start training and educating staff on the proposed regulations and guidelines, as well as the proposed Closing Disclosure. As an aid, starting on page 839 of the 1,099-page rule, the CFPB provides examples of how to fill out the Closing Disclosure for different loan products.

Currently, settlement agents are required to provide the HUD-1, while lenders are required to provide the revised Truth-in-Lending disclosure. The CFPB is proposing two alternatives for who is required to provide consumers with the new Closing Disclosure form:

  1. Under the first option, the lender would be responsible for delivering the Closing Disclosure form to the consumer.
  2. Under the second option, the lender may rely on the settlement agent to provide the Closing Disclosure form. However, under this option, the lender would also remain responsible for the accuracy of the Closing Disclosure form.

Either option will impact a company’s workflow. Assuming settlement agents produce the Closing Disclosure, settlement agents will need to start working with lenders earlier in the process to get final numbers and approvals. If the lender provides the disclosure, settlement agents will need to provide final settlement numbers to lender earlier in the process and alert the lender of changes in those numbers and reasons for them.

In addition to educating staff on the rule and Closing Disclosure, Wyatt encourages title professionals to start talking with software vendors.

Wyatt said title professionals should be asking their software vendor these questions:

  • How do they plan to handle the proposed changes?
  • How involved are they with the CFPB and industry trade associations?
  • Will there be any costs to your company for any software updates?
  • Will your current operating system be able to accommodate the updated software?
  • Will they be offering any training on the upcoming final rule?

Additional Resources

CFPB to Host Public Hearing on Integrated Mortgage Disclosures

The Consumer Financial Protection Bureau announced it will hold a field hearing at 11 a.m. ET, Wednesday, Nov. 20 to address the Bureau’s “Know Before You Owe” project.

The field hearing will feature remarks from CFPB Director Richard Cordray on the Bureau’s efforts to combine overlapping federal disclosure forms required by the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA).

A new Closing Disclosure will replace the HUD-1 and revised TIL disclosure, while a Loan Estimate will replace the GFE and early TIL. Testimony from consumer groups, industry representatives and members of the public also will be featured during the field hearing.

ALTA will provide updates from the hearing, which will be streamed live on the CFPB’s blog. ALTA staff planning to attend include Michelle Korsmo, chief executive officer, and Justin Ailes, vice president of government and regulatory affairs. If interested in attending, email an RSVP to cfpb.events@cfpb.gov with your full name and organizational affiliation (if any).

If you plan on attending, please send an email to ALTA as well, as the association plans on holding a roundtable following the field hearing to discuss concerns with the integrated mortgage disclosure proposal.

For more info, go to www.alta.org/cfpb.


ALTA Unveils Best Practices Assessment Preparation Workbook for Members

ALTA has created a Best Practices Assessment Preparation Workbook that members can use to examine adoption of ALTA’s “Title Insurance and Settlement Company Best Practices” and measure if a company is prepared to undergo an assessment.

ALTA is providing Workbooks for each pillar of the Best Practices. Workbooks for all the pillars, except pillar No. 3 (which will be released next week) can be found here.

You can read more about the Workbooks here.

To help members fill out the Workbook, we've created this tutorial video:

ALTA has created a Best Practices Assessment Preparation Workbook that members can use to examine adoption of ALTA’s “Title Insurance and Settlement Company Best Practices” and measure if a company is prepared to undergo an assessment.

“We are hopeful that ALTA members find the Workbook helpful in preparing for a Best Practices Assessment and also in the day-to-day running of your company,” said Michelle Korsmo, ALTA’s chief executive officer. “You can think of the Workbook as the Cliffs Notes to help title professionals prepare for the Assessment.”

To help simplify the process, ALTA will provide a Workbook for each pillar of the Best Practices. The first Workbook released today (Aug. 22) is for pillar No. 1, which addresses licensing. Workbooks for each pillar—which are provided exclusively to ALTA members— will be released over the coming weeks.
- See more at: http://www.alta.org/news/news.cfm?newsID=22261#sthash.0IE1qT4f.dpuf

Title Action Network Adds New State Partners, Launches New Membership Contest

The Title Action Network (TAN) welcomed the state land title associations of Washington, Arizona, Michigan, and Pennsylvania as official partners last week.

The new states bring TAN’s total number of state land title association partners to 29. If your state would like information on becoming an official state land title association partner, please e-mail Madeleine Nagy at mnagy@alta.org or call 202-261-2949.

TAN’s membership is now at 4,500! To capture some of the TAN excitement heading into ALTA’s Annual Convention, the Title Action Network has launched a new contest today. Any individual that recruits a new TAN member between today and September 30 will be entered to win a FREE Apple iPad! Click here for more information.

It’s simple—just ask anyone you know in the land title industry to join the Title Action Network at www.titleactionnetwork.com and make sure they list your name in the “referred by” line. 

If you have any questions about starting a TAN membership drive in your state or company, please e-mail Wayne Stanley at wstanley@alta.org or call 202-261-2932.

If you'r wondering how TAN can help, check out this video:

Congress Urges Cordray to Drop ‘Optional’ From Owners’ Title Insurance on Forthcoming Mortgage Disclosures

“I would just suggest get rid of the word optional.”

That was the message from Congressman Ed Perlmutter (D-CO, and this year’s recipient of the Protecting the American Dream Award) to Consumer Financial Protection Bureau Director Richard Cordray at a hearing on Thursday on the Bureau’s semiannual report to Congress.

Congressman Perlmutter’s statement came after Congressman Gary Miller (R-CA) and Director Cordray had an exchange on the topic of calling owners’ title insurance “optional” in the final rule. Here is the exchange:

REP. MILLER: I enjoyed your opening statement. You talked about empowering consumers, fair and transparent competitive marketplaces, dealing with bad actors, which we saw plenty of those before 2007 and you supervise a program to create larger credit reporting companies. The one thing that’s kind of glaring to me is you took title insurance and you tagged it as optional for the buyer. And that’s a real concern for me? Now, anytime a buyer would look at something and they’d say optional and it cost money, generally they don’t do it because most people really don’t understand what optional means or they don’t know what title insurance really means. But your bank regulators and GSEs all require a title insurance before they’ll make a loan?And if we’re concerned about empowering consumers, we really should be concerned about their safety. And why would you take something that I believe is very, very important that could arise in the future and put optional on it?

MR. CORDRAY:  First of all, I take your point. Your point is, you know, obviously meritorious that, you know, title is often in question with properties, and different parts of the country more so than others. Title insurance obviously is meant to address the risks of that. I will be happy to go back and take a look at the point you’re raising about how we’re characterizing it on that proposed form.

In addition to the owners’ title insurance questions, Congressman Randy Hultgren (R-WI) pushed Director Cordray on the implementation timeline for the rule and the topic of machine-readable forms. Hultgren asked:

REP. HULTGREN: I know you’re working on one more major mortgage rule- making, the merging of RESPA and TILA mortgage disclosures into one document. And the proposed rule was over 1,000 pages and will affect everyone involved in a home purchase: home-buyers, lenders, realtors. As I understand it, given how much technical work must go into getting everyone’s system updated and ready, I’d like to think it would be impossible to have this rule implemented before January 15th. Is that true? Why or why not?

CORDRAY: So the (inaudible) rule was one of the—it was a special mortgage rule in the sense that Congress required us to do it, but didn’t give us a deadline, which told us that Congress wanted it done, but not quite on the same priority maybe as some of the other rules. We will now finalize that rule later this year. We will give an implementation period for that that I think will be sufficient for industry. And we’re talking and—and listening closely to what they have to say about that. We recognize that’s going to require a fair amount of systems and process changes. And that will lag behind the changes that they’re making for January...

REP. HULTGREN: So there will be a delay in implementation requirements...

CORDRAY: It’s not even finalized yet, that one, unlike all the others. And when it is finalized, there will be a period of time to recognize they need to finish implementing this rule and then have ample time to bring that into effect.

REP. HULTGREN: Getting very specific on this, I know one of the requirements of the Bureau’s RESPA-TILA proposal is to require all disclosure forms to be machine-readable record format. I wonder if you could tell me what that means, what the purpose of machine-readable forms are. While I understand and appreciate that this will help the Bureau in examination, convergence to these systems, as you can imagine, will be incredibly costly for small lenders, ESCO agents and title companies. I wonder what efforts you’re doing—taking to help minimize the cost burdens on this rule on small businesses.

CORDRAY: Yeah, thank you for the question. Just as you’re hearing about that, we’re also hearing about it. We’re trying to think about exactly what purpose that serves and—and to what extent those benefits are worth the burdens. Obviously, the point I—I know is to create some uniformity so that there can be more comparison, more analysis and more understanding of the market. Whether—whether that’s all appropriate or needs to be done now is something that we’re looking at.

REP. HULTGREN: My time is just about done. Just, you know, I hope you’ll look at cost benefit analysis. That doesn’t happen enough in this. And it absolutely is having an impact on small businesses.

You can view an archived webcast of the hearing here.

We are grateful to Congressmen Hulgren, Miller and Perlmutter for posing these important questions to Director Cordray. As we move closer to the release of the final rule, we will eagerly watch for how the Bureau resolves these and other issues brought up in ALTA’s comment letter. We're still hearing sometime in October and will provide a webinar shortly after the release to go over what the CFPB unveils.

If you have any questions about the hearing please contact please contact ALTA’s vice president for government and regulatory affairs, Justin Ailes, at justin@alta.org or 202-261-2937.

You can also view ALTA's advocacy efforts regarding the integrated mortgage disclosures here.

iPhone fingerprint sensor raises security concerns

Apple's Touch ID fingerprint scanner allows users to scan their fingerprint to access the iPhone and download media or apps from iTunes without the need to type in a PIN code. - See more at: http://www.alta.org/news/news.cfm?newsID=22535#sthash.1b3IuKCw.dpuf
Apple's Touch ID fingerprint scanner allows users to scan their fingerprint to access the iPhone and download media or apps from iTunes without the need to type in a PIN code. - See more at: http://www.alta.org/news/news.cfm?newsID=22535#sthash.1b3IuKCw.dpuf
pple's Touch ID fingerprint scanner allows users to scan their fingerprint to access the iPhone and download media or apps from iTunes without the need to type in a PIN code. - See more at: http://www.alta.org/news/news.cfm?newsID=22535#sthash.1b3IuKCw.dpuf

Apple's new iPhone 5S features a new fingerprint sensor to enhance security. The Touch ID fingerprint scanner allows users to scan their fingerprint to access the iPhone and download media or apps from iTunes without the need to type in a PIN code.

While the feature is supposed to improve security, questions have been raised about hackers' ability to "steal" a fingerprint. For ALTA members that may eventually use this feature, any non-public personal information could be at risk. ALTA’s “Title Insurance and Settlement Company Best Practices” provides guidance on protecting NPI.

Gregory McDonald of Cloudstar Consulting Corp. is concerned the fingerprint scanner will give iPhone users a false sense of security. - See more at: http://www.alta.org/news/news.cfm?newsID=22535#sthash.1b3IuKCw.dpuf

Gregory McDonald of Cloudstar Consulting Corp. shared some concerns with us and you can read about those here. The article also includes tips on smartphone security from ISON.

But can fingerprints really be "stolen?" Check out this cool video from MythBusters who prove you can.

pple's Touch ID fingerprint scanner allows users to scan their fingerprint to access the iPhone and download media or apps from iTunes without the need to type in a PIN code. - See more at: http://www.alta.org/news/news.cfm?newsID=22535#sthash.1b3IuKCw.dpuf


Educating Next Wave of Employees Vital to Industry’s Future

We're guessing that like most title companies across the country, your staff is more likely to have listened to music on albums rather than downloading songs to computers or streaming them through smartphoneas.

How you listen to music isn’t the point. The issue is that the majority of our talented and knowledgeable workforce is moving closer toward to retirement. To replace the people in these positions, we need to turn our sights to educating the next generation of employees, and making them aware of our fabulous and essential industry.

Traditionally, we’ve thought of ourselves as secondary to the rest of the players involved in real estate transactions. But why shouldn’t we proudly promote a career as a title professional? There’s nothing too glamorous about being in our industry, but it’s definitely nothing to sniff your nose at. It’s been a rewarding career for many of us and for many of our family members as well. There probably aren’t many of us who said to their parents as a teenager that we wanted a career in the title business, but there’s a large group of untapped potential employees in the younger generations.

According to a recent survey of more than 500,000 workers born between 1982 and 1993, the best opportunities for America’s young workers were in technology (telecommunications and Internet services), medical, aerospace, and gas and oil. These industries provide annual income for these Gen Y workers ranging from $55,000 to more than $90,000. Compare this to the pay of a cashier ($17,000), which is the lowest-paying job commonly held by Gen Y workers.

Meanwhile, the title industry offers a great career and should be considered a viable option for those entering the workforce. As reported in the June edition of TitleNews, the average hourly earnings for abstracters and settlement agents is $23.67, which translates to more than $45,000 per year. The average annual pay for a similar position for a direct operation is $10,000 more.

In August, our Title Topics webinar series addressed recruiting and rethinking how the industry grows. Cynthia McGovern of Orange Leaf Consulting outlined key steps for recruiting from within and outside the industry in order to hire talented employees and meet the needs of today's marketplace. Here's a recording of the webinar:


McGovern also wrote this great article for TitleNews Online titled "Recruiting to Sustain the Title Industry." She'll be presenting at ALTA's Annual Convention at The Breakers in Palm Beach, Fla., in October. Her session "Recruiting Reboot: Attracting Top Talent to your Organization" will address what the industry should start doing now to attract talent fpr the next generations. Click here for more info on the Annual Convention!

attract talent from the next generations.
Recruiting to Sustain the Title Industry

As the industry implements ALTA’s Best Practices, it will be essential to have trained employees to replace positions of those who retire. According to the U.S. Census Bureau, there are more than 130,000 people working as abstracters, settlement officers or with direct operations. That’s a lot of potential employment opportunity. We just have to reach out, connect and educate prospects.

This is an important discussion at ALTA because we deeply care about the future of this great industry. To help with this, start thinking about what education and information would help produce better qualified employees. Is there anything your company does now to educate younger generations? Does your company reach out to local universities or career centers? If so, how and what do you say? Please share your ideas and thoughts with us at education@alta.org.

Let’s start preparing our future workforce now!

Changes to QRM Proposal a Victory for Consumers and Industry

The Qualified Residential Mortgage (QRM) rule will create additional underwriting standards—most notably a downpayment requirement—in order to avoid risk-retention requirements for mortgage securitizations. In a letter to six regulators, ALTA joined members of the Coalition for Sensible Housing Policy urging for a broad definition of the QRM and to keep it consistent with the Qualified Mortgage (QM) mortgage rule, was was develoed by the Consumer Financial Protection Bureau and goes into effect in January.

ALTA urges regulators to oppose a stringent 20 percent down payment requirement, saying this would limit the ability of lower-income households and first-time buyers to enter the market.

In a victory for the industry, the FDIC along with five other agencies on August 28 re-proposed the QRM rule and now aligns better with the QM Rule, which puts limits on debt-to-income ratios, prohibits low- and no-documentation lending, negative amoritizations, balloons and interest-only loans. CoreLogic had predicted the QM rule coupled with the QRM rule with a 10 percent downpayment requirement would result in only 25 percent of purchase originations meeting eligibility requirements.

ALTA was pleased to learn that regulators listened to industry and consumer coalitions to modify the QRM rule and eliminate the proposed 20-percent down payment requirement. Understanding that sensible credit standards can exist without a significant down payment requirement will help ensure the possibility of homeownership for credit-worthy borrowers for generations in this country.

As the independent third party at the real estate closing table, we understand the importance of having access to safe and affordable loans. For more than a century, title insurance has provided this backstop, helping ensure residential mortgages are of very high credit quality while reducing risk for all parties involved in real estate transactions.

ALTA will continue to promote a commonsense underwriting requirement to the QRM rule, which, through a title search backed by a title insurance policy, is as an essential aspect of safe and secure mortgage lending that ultimately allows lenders to lend, spurs investors to invest and leads to consumers getting the keys to their home.

Annual Convention Registration Brochure Arriving in Your Mailbox

The Registration Brochure for ALTA's 106th Annual Convention, being held Oct. 9-12 at The Breakers in Palm Beach, Fla., will be arriving in your mailbox and contains all the information you need to know about the schedule of events, conference hotel, travel accommodations and registration rates. Registration_Brochure

You can also download the Registration Brochure. Register online and save $50!

Don't miss this opportunity to hear some energetic and knowledgeable speakers, and learn the latest news on business and regulatory trends affecting our industry. From new lender demands to the CFPB’s new mortgage disclosures, there’s plenty to learn. There are also several exciting tours and events planned to enhance your experience and help you kick back and relax.

Here’s a glance at what’s in the Registration Brochure:

  • Special Invite from ALTA President Frank Pellegrini
  • General Session and Professional Development Session Overviews
    • A panel of invited speakers including Sally Freudenberg of Wells Fargo, Rich Horn of the CFPB, Ben Olsen of Buckley Sandler and Leslie Wyatt of SoftPro will discuss the new era for closings as we await the CFPB’s finalization of new mortgage disclosures.
    • Dr. Stan Humphries, Zillow’s chief economist, will offer analysis on home values and what level of appreciation we can expect over the next few years.
    • Jeff Noel of the Disney Institute will share how Disney’s comprehensive training process keeps it positioned to maintain a competitive advantage.
    • Two full tracks dedicated to education on Best Practices.
  • Continuing Education Credits
    • ALTA is proud to offer Continuing Education credit in 19 states and Continuing Legal Education credit in 25 states.

    • Special Events and Tours
      • Ice Breaker Reception & Opening of the Exhibit Showcase
      • Deep Sea Fishing
      • Palm Beach Tour
      • Paddle Boarding Tour
      • Snorkel Boat Tour
      • Kennedy Bunker Tour
      • Eighth Annual Michael F. Wille Memorial TIPAC Golf Tournament
      • “Good Vibrations” Closing Reception & Banquet
  • Meeting Information
    • Hotel and travel info

    • Registration Rates

Sponsorship Opportunity

Attendees at ALTA’s Annual Convention constantly discuss the various meetings and events on social media. Sponsors of our new social media wall will have their logo placed on a scrolling bar at the bottom of the live-streaming wall. Click here to view a sample social media wall. Email Claire Mitchell at claire@alta.org for more information.

Additionally, we have added a few extra booths in the exhibit hall. They are going fast so email claire@alta.org to reserve your space before they are gone.

Room Block Sold Out

Please note that ALTA’s room block at The Breakers is sold out. You can call The Breakers Reservations Department at 888-727-1649 and ask to be put on the waiting list. ALTA is adding an overflow room block at another hotel. Check ALTA’s website for updates.