12/05/2019

Business Continuity: Have a Plan

Earlier this year, while Americans across the country were still celebrating July 4th, Jaime Kosofsky and his staff woke the following day to learn that a fire had gutted Brady & Kosofsky’s main office in Matthews, N.C.

Kosofsky, a partner with the law firm, said that within minutes of arriving on scene, the executive management team activated the firm’s Disaster Recovery and Business Continuity Plan (BCP). The law firm relocated everyone to an alternate location as detailed in its BCP. The team contacted the proper parties, which made it possible for the firm to be open for business that day.

“This was a devastating blow to our team, however because of their commitment to compliance with our compliance management system, we were able to work through what could have been the end of Brady & Kosofsky,” Kosofsky said. “We are in great shape, our temporary office was up and running, and our new office was recently built.”

Having a business continuity plan is essential to keeping an operation going following a disaster. Being prepared to manage disaster recovery can greatly minimize business disruption. The third pillar of ALTA’s Title Insurance and Settlement Company Best Practices encourages title professionals to have a disaster management plan in place to help protect non-public personal information (NPI). To find a company to help with business continuity, go to alta.org/marketplace.

Despite the destruction, Kosofsky said that there was no data or document loss due to the firm’s move to a paperless office. The fire did extensive damage to the IT infrastructure and phone system, but the main number was forwarded to a cell phone.

Kosofsky said his firm’s first line of defense were the policies and procedures that were developed more than five years ago.

“While it was great to have this all on paper and in writing, it was the culture of compliance at our firm which really paid off and protected us,” he said. “Our employees took the adoption of our policies and procedures very seriously and take a great deal of pride from being an integral part of our security and compliance system.”

As the fire burned, the firm’s chief financial officer contacted Brady & Kosofsky’s managed service provider to get an assessment of data loss since the servers were in the building that burned. The good news was that data backups were stored in a data center some 1,000 miles from the fire.

“We knew the extent of the data loss before the fire was out. That took a lot of pressure off,” Kosofsky said.

The next concern was how quickly the firm could reopen and replace lost equipment. The CFO contacted the insurance company, filed a claim and got clearance from the adjuster to order equipment necessary to get the company operational.

Since the firm’s BCP required employees with laptops to take them home, only two of them were lost in the fire. The company then set up a war room in the building next door and relied on the BCP to formulate next steps such as contacting employees, and getting email, its title production system and other IT resources running again.

After figuring out who could work remotely, the leadership team secured alternate workspace, furniture and equipment necessary to continue business within two days. Clients were then contacted with alternate email and phone numbers.

In retrospect, Kosofksy says the law firm needed a stronger plan for restoring its phone system and will move its entire data infrastructure into the cloud, which will allow the company to rebound immediately following the next catastrophe.

“Our BCP/Compliance Policies have a strict clean-desk policy for anything containing NPI or other sensitive information,” Kosofsky said. “So, having that along with having employees take their computers home at night really paid off.”

A BCP doesn’t happen quickly. Reviewing these procedures ahead of a disaster can help your company find the weak points in the organization and let you proactively fix them.  This will give you best shot of success after an unexpected event.  We can always rebuild the network and we know the data is secure. The most important part was the communication between B&K and Premier One to make sure that they were up and running the next day. 

Kansas-based Premier One helped B&K develop its business continuity plan. Shawn Fox, director of sales and marketing for Premier One, said a BCP can't be developed quickly. Reviewing procedures ahead of a disaster will help a company find the weak points and to proactively fix them. "This will give you best shot of success after an unexpected event," Fox added. "We can always rebuild the network and we know the data is secure. The most important part was the communication between B&K and Premier One to make sure that the law firm was up and running the next day." 

Business Continuity Planning ProcessHow to Develop a Business Continuity Plan

According to ready.gov, the development of a business continuity plan includes a business impact analysis (BIA). This predicts the consequences of disruption of each business function and process and gathers information needed to develop recovery strategies. This involves identifying time-sensitive or critical business functions and processes and the resources that support them.

The BIA should identify the operational and financial impacts resulting from the disruption of business functions and processes. Impacts to consider include:

  • Lost sales and income
  • Delayed sales or income
  • Increased expenses (e.g., overtime labor, outsourcing, expediting costs, etc.)
  • Regulatory fines
  • Contractual penalties or loss of contractual bonuses
  • Customer dissatisfaction or defection
  • Delay of new business plans

BIA worksheetThe BIA should identify the critical business processes and resources needed for the business to continue to function at different levels. A BIA questionnaire can be used to survey office managers within the company.

Scenarios resulting in significant business interruption should be assessed in terms of financial impact, if possible. These costs should be compared with the costs for possible recovery strategies.

The BIA report also should prioritize the order of events for restoration of the business. Business processes with the greatest operational and financial impacts should be restored first.

Recovery Strategies

If an office is damaged and business is impacted, financial losses can quickly begin to grow. Recovery strategies are alternative means to restore business operations to a minimum acceptable level following a business disruption and are prioritized by the recovery time objectives (RTO) developed during the business impact analysis.

Recovery strategies require resources including people, facilities, equipment, materials and information technology. An analysis of the resources required to execute recovery strategies should be conducted to identify gaps. For example, if an office is destroyed by a natural disaster but other offices are readily available to make up lost production, then there is no resource gap.

Strategies may involve contracting with third parties, entering into partnership or reciprocal agreements or displacing other activities within the company. Staff with in-depth knowledge of business functions and processes are in the best position to determine what will work. Possible alternatives should be explored and presented to management for approval and to decide how much to spend.

Depending upon the size of the company and resources available, there may be many recovery strategies that can be explored.

Utilization of other owned or controlled facilities performing similar work is one option. Operations may be relocated to an alternate site. This strategy also assumes that the surviving site has the resources and capacity to assume the work of the impacted site. Prioritization of production or service levels, providing additional staff and resources and other action would be needed if capacity at the second site is inadequate.

Telecommuting is a strategy employed when staff can work remotely from home. It can be used in combination with other strategies to reduce alternate site requirements. This strategy requires ensuring telecommuters have a suitable home work environment and are equipped with or have access to a computer with required applications and data, peripherals and a secure broadband connection. It’s also a good idea to test this strategy from time to time by having employees work a day or to per month remotely.

Partnership or reciprocal agreements can be arranged with other businesses or organizations that can support each other in the event of a disaster. Assuming space is available, issues such as the capacity and connectivity of telecommunications and information technology, protection of privacy and intellectual property, the impacts to each other’s operation and allocating expenses must be addressed. Agreements should be negotiated in writing and documented in the business continuity plan. Periodic review of the agreement is needed to determine if there is a change in the ability of each party to support the other.

There are many vendors that support business continuity and information recovery strategies.

External suppliers can provide a full business environment, including office space and live data centers ready to be occupied. Other options include provision of technology-equipped office trailers, replacement machinery and other equipment. The availability and cost of these options can be affected when a regional disaster results in competition for these resources.

Plan Development

  • Develop plan framework
  • Organize recovery teams
  • Develop relocation plans
  • Write business continuity and information technology (IT) disaster recovery procedures: IT includes many components such as networks, servers, desktop and laptop computers and wireless devices. The ability to run both office productivity and enterprise software is critical. Therefore, IT recovery strategies should be developed so technology can be restored in time to meet the needs of the business. Manual workarounds should be part of the IT plan so business can continue while computer systems are being restored.
  • Document manual workarounds: If the staff is equipped with paper order forms, order processing can continue until the electronic system comes back up and no phone orders will be lost. Identify the steps in the automated process, creating a diagram of the process can help.
  • Assemble plan, validate and gain management approval
  • Testing and Exercises
  • Develop testing, exercise and maintenance requirements
  • Conduct training for business continuity team
  • Conduct orientation exercises
  • Conduct testing and document results
  • Update Business Continuity Plan to incorporate lessons learned from testing and exercises.

Climate disasters

Developing an IT Disaster Recovery Plan

Part of any business recovery strategy should include an IT disaster recovery plan. This begins by compiling an inventory of hardware (e.g. servers, desktops, laptops and wireless devices), software applications and data. The plan should include a strategy to ensure that all critical information is backed up.

Identify critical software applications and data and the client and server hardware required to run them. Using standardized hardware will help to replicate and reimage new computers. Ensure that copies of program software are available to enable reinstallation on replacement equipment. Prioritize hardware and software restoration. Document the IT disaster recovery plan as part of the business continuity plan. Test the plan periodically to make sure that it works.

Data Backup

Businesses generate large amounts of data and data files are changing throughout the workday. Data can be lost, corrupted, compromised or stolen through hardware failure, human error, hacking and malware. Loss or corruption of data could result in significant business disruption.

Data backup and recovery should be an integral part of the business continuity plan and information technology disaster recovery plan. Developing a data backup strategy begins with identifying what data to backup, selecting and implementing hardware and software backup procedures, scheduling and conducting backups and periodically validating that data has been accurately backed up.

Developing the Data Backup Plan

Identify data on network servers, desktop computers, laptop computers and wireless devices that need to be backed up along with other hard copy records and information. The plan should include regularly scheduled backups from wireless devices, laptop computers and desktop computers to a remote network server. Data on the server can then be backed up. Backing up hard copy vital records can be accomplished by scanning paper documents into digital formats and allowing them to be backed up along with other digital data.

Options for Data Backup

Many vendors offer online data backup services including storage in the “cloud.” When backup systems are installed and properly configured, software installed on the client server or computer is automatically backed up.

Large-capacity USB drives with integrated data backup software also are effective means for businesses to backup data. The frequency of backups, security of the backups and secure off-site storage should be addressed in the plan. Backups should be stored with the same level of security as the original data.

Data should be backed up as frequently as necessary to ensure that, if data is lost, it is not inaccessible to the business. The business impact analysis should evaluate the potential for lost data and define the “recovery point objective.” Data restoration times should be confirmed and compared with the IT and business function recovery time objectives.

11/27/2019

What Is Multifactor Authentication?

Nist multifactor

An update to ALTA’s Title Insurance and Settlement Company Best Practices that goes into effect in January requires the use of multifactor authentication (MFA) for all remotely hosted or remotely accessible systems storing, transmitting or transferring non-public personal information.

Multifactor authentication is different than the traditional method of logging into an account with a username and password. If you’re one of 54 percent of consumers who use five or fewer passwords for all their accounts, this is risky security that allows hackers to take down multiple accounts just by cracking one password. MFA is a more secure way to protect NPI and accounts.

You probably already use MFA in some form. You just don’t know it. You’ve used MFA if you’ve:

  • swiped a bank card at the ATM and then entered a PIN (personal ID number).
  • logged into a website that sent a numeric code to your phone, which you then entered to gain access to an account.

MFA, also known as two-factor authentication (2FA), credentials fall into three categories:

  1. Something you know: This includes passwords, PINs, combinations, code words, etc.
  2. Something you have: This includes all the physical objects such as your computer, phone, keys, USB drives and token devices.
  3. Something that you are: This includes any part of the human body that can be offered for verification, such as fingerprints, palm scanning, facial recognition, retina scans, iris scans and voice verification.

Let’s use logging into a bank account as an example. If MFA is turned on or the bank turned it on for you, the first thing you’ll do is type in your username and password. As a second factor, an authenticator app generates a one-time code that’s entered on the next screen. The code is often sent to your phone. In many cases, most MFA approaches will remember a device. So, if the same computer or phone is used, the site remembers the device as the second factor.

According to a survey by Google, experts say using MFA is one of the top three things that can be implemented to enhance online security. The other two practices are to install software updates and use unique passwords.

Click here to learn how to set up MFA for Office 365. Here’s a list of websites that offer MFA.

11/21/2019

Get Your Free ALTA Registry Listing

 

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. ALTA Registry Infographic 1 - 2017 (1) copy

That's why ALTA created the Title & Settlement Agent Registry, an online database that allows lenders to know they are working with the correct company. Agents and underwriters have communicated to confirm company name and contact information—providing lenders with a trusted industry utility to identify transaction partners. Currently, more than 8,000 company locations are already confirmed in the ALTA Registry.

“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 Diane Tomb, ALTA’s CEO.

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. 

“Establishing and confirming a business on the ALTA Registry helps ensure more efficient communication among all parties in the real estate transaction," said Eddie Oddo, co-chair of the ALTA Registry Committee and vice president of corporate business solutions for First American Title Insurance Co. "Lenders, underwriters, agents and vendors can easily and confidently identify the right settlement provider across each of their databases.”

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, co-chair of the ALTA Registry Committee and president of Texas-based 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.”

Lender customers use the ALTA Registry to fight wire fraud: They want to use reliable information to fight back against scammers and hackers. Lenders know that with ALTA's data, title companies and law firms can be accurately identified earlier in the real estate transaction, reducing errors when placing or closing title orders. It's time to get your ALTA Registry listing!

Independent escrow companies do 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).

Be aware: ALTA membership does not automatically create your listing in the ALTA Registry. If you are unsure about your status in the ALTA Registry, visit alta.org/registry and check your underwriter confirmation status.

Want to know more? Connect with us at altaregistry@alta.org.

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11/15/2019

GenEveryone: Connect With All Generations

Stratten horizontal

Marketing and branding innovator Scott Stratten took the stage sporting a man bun for the closing Omni Session at ALTA ONE in Austin. Why the interesting hair style? Stratten quickly explained.

“My wife loves it. That’s the only reason,” he joked.

From there, the best-selling author and president of UnMarketing took attendees on a roller-coaster of wit and nostalgia to drive home his point that everyone thinks the next generation is the hardest to understand and deal with. But is that true or are we reacting exactly as we always have to new ways of thinking and working?

“Every generation hates the next generation. It’s just law,” Stratten said. “We hate people based on age.  

That’s how this works. Generation X was called the slacker generation. Millennials are called the trophy generation. Who’s buying them the trophies? GenX.”

Stratten has transformed how corporations like PepsiCo, Century 21, Fidelity, and Microsoft do business with radical insights on how to engage customers better through social and viral marketing. Instead of worrying about generational differences, he puts the focus back on what matters the most to current and potential customers—values like trust, authenticity, relationships and service.

“The problem is we rip on younger people,” Stratten said. “The difference is disruption—change without time to resist it. The rate of change is exponentially higher now. Embrace the age of disruption.”

Stratten said potential and current customers want to be listened to, validated and have a platform to be heard—especially online. This is less about age and more about being present and trustworthy.

“Never judge a person based on their age,” Stratten said. “Being an idealist is refreshing. They have hope.”

11/14/2019

ALTA President: Be Authentic and Win

Odonnell ONE

In the movie “Bohemian Rhapsody,” Freddie Mercury’s father says, “good thoughts, good words and good deeds.” It’s a reference to one of the core Zoroaster religious maxims, which reinforces the idea of doing the right thing, and worldly rewards will follow.

Mary O’Donnell, ALTA’s 2019-20 president, mentioned this quote during her speech at ALTA ONE in Austin to remind attendees to be true to themselves when facing constant challenges and changes in the market.

“Would it be cool if life was that simple? But it can be,” said O’Donnell, who is president of Westcor Land Title Insurance Co. “If we live our lives and businesses by those words you will be authentic. If you’re authentic you win. People do business with people. If you say what you think and do what you say, you will be authentic.”

Staying genuine can often be challenging during change. But O’Donnell said the industry’s transformation is already here.

“We’re experiencing change every day and it’s not going anywhere anytime soon,” she said. “We are constantly thinking about the threats to our industry. What’s it going to look like? What should we do next? Our industry has been around for 125 years—and think about it, we’ve been selling the same product in the same way for 50 years. Most people would say that’s ‘That’s simply unsustainable.’”

Change isn’t solely about disruption or discomfort. It also opens the door to opportunities. O’Donnell encouraged attendees to think about improvements they can make to the process and transaction. Innovation doesn’t just have to be tech-based.

“We all need to be thinking about a shift in our industry,” she added. “Because others are. Investors, outside industries, tech giants—they all see this multi-billion-dollar industry as ripe for innovation. Whether you’re the size of Westcor or have two employees in rural Kansas, these disrupters are thinking about your business and you should as well.” 

But O’Donnell quickly reminded attendees to not get discouraged because “we know this business better than anyone and disruption works much better within.” O’Donnell encouraged investment in top-notch customer service training. She pointed to Publix, the largest employee-owned grocery chain in the United States. With an aim to be the premier quality food retailer in the world, the company doesn’t have the greatest technology, but what they have in spades is customer service.

“If you’re from the Southeast part of the country, you know that people who love Publix really LOVE Publix,” O’Donnell said. “People will go out of their way just to buy groceries at Publix. Why? Because their employees live and breathe helping their customers. If you went home today would your employees say the same thing or that they are focused on getting a commitment out? Or would they say, ‘I’m focused on creating a wow moment.’ Publix isn’t necessarily developing huge campaigns and wild schemes to better the customer service process. They are simply empowering their employees to do what it takes to “wow” the customer on each visit. Ask yourselves what you can do in your business.”

To help the industry better understand what’s next and prepare for it, ALTA creates a set of strategic priorities each year. ALTA’s 2020 strategic priorities:

  • Protect customers’ money
  • Prepare for privacy laws and regulations
  • Prepare for digital closings
  • Tell your story
  • Engage with relevant agencies focused on federal housing finance policy develop and retain talent

“Over the next year, we’re going to continue to find solutions to protect our customers’ money,” O’Donnell said. “We’re going to maintain and strengthen our relationships with all the agencies creating housing policy at the federal level to ensure ALTA always has a voice and a seat at the table. Digital closings and increased privacy laws will also be a focus as these changes will affect our business for years to come. The need to develop and retain talent is an issue facing each of us and we’ll work on workforce skills and specialized training to help your business navigate this changing terrain. And lastly, we’re going to keep telling our story as an industry to ensure all our customers really understand what we do to protect property rights.”

11/06/2019

Survey: Most Title Companies Interested in Offering Digital Closings

Digital closing readinessEighty percent of title companies are interested in conducting digital closings or have already closed some type of hybrid, electronic or remote online closing, according to a recent ALTA survey.

The survey of more than 800 title professionals showed that 44 percent are interested in digital closings, while 19 percent have researched vendors and applicable laws and 17 percent have already conducted some variation of a digital closing. Only 20 percent indicated they are not interested in digital closings.

While 14 percent of those surveyed currently offer digital closings, 42 percent indicated they have no planned timeline to offer these types of closings. Thirty-one percent plan to start offering digital closings in the next year, while 13 percent said they expected to begin offering digital closings within the next three years.

Lender requests and changes to state laws were the top two factors that would most likely alter a company’s timeline to implement technology to conduct digital closings. In October, Ginnie Mae announced it was moving forward with a pilot to accept e-notes. This will be a significant step toward a complete digital mortgage process. Fannie Mae and Freddie Mac have already launched initiatives for digital closings and to accept e-mortgages.

Digital closing factorsDriving a company’s interest may be whether they’ve been asked to perform a digital closing. According to the survey, two thirds indicated they have not had any digital closing requests. Lenders (22 percent) were the ones most often making a request for a digital closing, followed by consumers (16 percent) and real estate agents (10 percent).

A recent survey by Solidifi of 1,000 consumers who bought or refinanced their home in the past two years found that 70 percent of consumers would like a more digital process at the closing table.

Transactions involving cash buyers (55 percent) were the types of deals where digital closings were most often used.

Of those who took the survey, 66 percent operated one office over the past year, 24 percent had two to four offices, 8 percent had between five and 50 offices and 2 percent had more than 50 offices. Nearly three fourths of those who participated said they have less than 10 employees, while another 20 percent have less than 50.

To help title companies understand the digital closing process, ALTA and the MBA have partnered to offer three Digital Closing & eMortgage Boot Camps. Click here for more information.

 

 

11/05/2019

Alert: Spoofed Email Appears to Come from ALTA

Phishing emailALTA is alerting its members to delete a phishing email with the subject line “American Land Title Association.”

The email appears to come from Cande Fudge, ALTA’s membership and licensing manager. The email says ALTA is interested in doing an interview with the recipient and to review the attached document for more information.

ALTA encourages you delete the email. Do not open the PDF. In addition, you should block the domain of the email or the IP address that it is coming from. Once the scammers catch on, they will likely switch email domains.

You can be sure that your information is safe. This is a phishing email and our system was not breached.

Thank you,

The ALTA Staff

10/31/2019

Winners of ALTA Our Values Awards

ALTA announced the winners of the ALTA Our Values Awards, which serve as the industry’s cultural compass and highlight the core ideals ALTA members embrace.

The four Our Values Awards were presented during ALTA ONE, the largest annual event for the land title insurance industry, held Oct. 22-25 in Austin. Each of the three individual awards represent one of the three values:

  • We Lead: We are the authority in real estate transactions. We innovate for the benefit of our customers.
  • We Deliver: Our customers trust us to do the right thing, the right way--before, during and after the transaction. We sweat the small stuff to assure that land transfer is accurate, swift and secure.
  • We Protect: We protect the property rights of those we serve. We reduce risk so our customers have peace of mind.

ALTA expanded the program this year to recognize an entire ALTA member office or operational team that demonstrate these ideals.

Our values evansDiane Evans NTP, an ALTA past president and vice president of Land Title Guarantee Co. in Denver, won the We Lead Award for her leadership on the Land Title Association of Colorado’s Remote Online Notary Task Force. As the consummate title insurance industry advocate, Evans used her expertise to stand up not for her company, but what she thought was in the best interests of the industry and, more importantly, the consumer. Evans lives the concept of leadership through her tireless work to improve the industry for all.

“The title industry is and always has been about protecting consumers,” Evans said. “Great companies, title agents and underwriters alike know that we have access to non-public personal information necessary to complete a consumer’s real estate transaction. Protection and use of that information is a trust that we should never abuse nor neglect. Assuring regulators, legislators and consumers is critical to creating confidence about our industry and the values we embrace.”

Our values kinnardLauren Vanni Kinard, president of First Excel Title in Fairfax, Va., won the We Deliver Award for going the extra mile to ensure her customers’ transactions are smooth, safe and on time. She delivered for her customers repeatedly, from going out of her way to track down incoming wire transfers after hours to ensure homebuyers wouldn’t have to spend the weekend in a hotel room, to helping a customer’s friend find two unreleased mortgage payments so that person could close on a home equity line of credit.

“It is quite an honor to be the recipient of the We Deliver Award,” Kinard said. “By looking at each transaction as if I were in the customer’s position, adopting a service-oriented platform helps ensure a successful experience, which aligns to my company’s mission. Our customers know we will deliver for them with professionalism and trust us as we strive to exceed industry standards.”

Our values GregoryAmy Gregory, chief administrative officer and president of the Florida Agency Network, won the We Protect Award for pulling out all the stops to help a real estate wire fraud victim. When a customer was defrauded of $130,000, Gregory uncovered where the funds were sent. She even persuaded the U.S. Secret Service to investigate the crime and ultimately retrieve and return the money. She then went a step further and earned her Certified Anti-Money Laundering Specialist (CAMS) designation to help become a strong resource for other customers.

“With decades of experience, I have seen a vast amount of change and new threats that did not exist years ago,” Gregory said. “We have made it our mission to protect our clients and company, and to create an environment of continuous improvement and awareness. I am truly honored to receive this award.”  

Our values LibertyFinally, Liberty Title, which has multiple offices in Michigan and Florida, won the Team Award. Liberty Title’s internal motto is, “If we can’t close it, no one can … or should,” summing up the company’s commitment to their customers. Earlier this year, a customer approached Liberty Title with a title issue that needed resolved. Many companies turned the customer away because of an existing lien. Liberty Title’s in-house legal team listened to the customer, explained her options, then closely examined the lien. The legal team found that the lien should have been expunged years ago.

“Working at Liberty Title means being part of a team that works toward one shared goal: protecting the consumer and giving our clients peace of mind with every transaction,” said Michele Richardson, president of Liberty Title. “We encourage each other; we collaborate, not compete. We use our different skill sets to make sure that problems are solved and contracts honored. Collaboration across departments is essential in ensuring that every transaction is handled professionally, sharing our knowledge and expertise along the way, while fostering a collegial environment that makes our colleagues feel like family.”

During the awards ceremony at ALTA ONE, ALTA Immediate Past President Steven G. Day NTP, president of national agency operations at Fidelity National Title Group, as well as Robert J. Grubb, cofounder of Alliant National Title Insurance Co. and vice-chairman of Presidio ATC Holdco LLC, presented engraved awards to each honoree.

“I am pleased to see the Our Values initiative be embraced by our members,” Day said. “It highlights the professionalism of those in our industry.”

“We Lead, We Deliver and We Protect reflect the universal values of ALTA members,” Grubb said. “These values are at the core of who we are and how we operate every day. The Our Values Awards recognize the most extraordinary efforts in a profession full of extraordinary professionals who work hard to protect the long-term interests of their customers. The awards allow us to recognize those in our industry who raise the bar, inspiring the rest of us to do the same.”

Why Our Economy Is Generating More Investment Growth in IP than IT

By Odeta Kushi

Important, but easy to overlook shifts in investment trends may be contributing to our current era of low interest rates. An excess supply of global savings relative to the demand for that money for investments is driving down interest rates, which can be thought of as the price of money. The neutral rate of interest, which is monitored by the Federal Reserve as it considers changes to monetary policy, represents the equilibrium point for the price of money and is largely determined by the supply and demand for savings (i.e., income that is not used for immediate consumption and that can be invested back into the economy).

Today, the neutral rate of interest is at historically low levels because of the excess of savings relative to the demand for that money for investments. The lack of investment in recent periods has received much attention this year. Investment that businesses make is called capital expenditure. Capital expenditures, or investments in property, equipment, products and technology, by a company facilitates a company’s growth and productivity, and ultimately broader economic growth. The U.S. economy is booming, yet capital expenditures declined in 2019. In the midst of the longest economic expansion in recent history, why is capital expenditure declining?

A Short History

In November 2017, the Tax Cuts and Jobs Act was introduced, with the intent that it would boost business investment upon becoming law. After the law took effect in the first half of 2018, companies in the S&P 500 increased capital expenditures by nearly 20 percent. Business spending on fixed investment (machinery, buildings and equipment) increased 11.5 percent and 8.7 percent during the first and second quarters of 2018, respectively.

However, by the second quarter of 2019, U.S. corporate investment in buildings and equipment fell by 0.7 percent, the first quarterly decline since the beginning of 2016. The overall slowdown in capital expenditures was not just limited to the U.S. Global corporate capex expenditures grew at a marginal rate of 2 percent last year, compared with 6 percent in 2017. Could it be that there’s a long-term structural change in business investment that is leading to the slowdown in capital expenditures and contributing to the dynamics that are keeping interest rates low?

Capital Expenditure Efficiency

Services play a much greater role in today’s economy than manufacturing, which means there is more demand for “soft assets,” such as intellectual property, software, and R&D, than there is for “hard assets,” such as equipment and structures. In fact, in the second quarter of 2019, intellectual property investment totaled nearly $1 trillion, compared to only $421 billion in the second quarter of 2002 – this is growth of over 128 percent. During that same time period, investment in hard assets only increased approximately 66 percent, nearly half the growth of investment in soft assets. While hard asset capital expenditures remain the dominant form of investment overall, it’s clear that investment in soft assets is increasing more quickly. This reflects the transition in our economy to businesses that are less hard asset capital intensive.

Additionally, in today’s modern economy many firms are moving from a capital expenditure model to an operating expense model. Take cloud computing, for example. In a world where technology is evolving rapidly, it is difficult to predict and manage a company’s IT infrastructure needs. So, rather than spending a large amount of capital to host, manage and maintain large amounts of IT infrastructure, firms are opting to “pay as they go,” renting the capacity they need at the moment, and scaling as their needs change. This reduces the hard capital expenditures and improves the efficiency of the expenditure.

With something like a cloud IT infrastructure, a company does not have to build and maintain an infrastructure to accommodate peak demand. Since services can be purchased as needed, utilization is optimized effectively making each expense dollar more efficient or “productive.” The result? Less investment dollars are going further. Obviously, the providers of cloud computing services are investing heavily in IT infrastructure, but the collective utilization by all their customers is much higher than if each customer did it alone. Therefore, less IT infrastructure is needed overall to support the economy’s computational needs.

Investment trends

Increasing investment in soft assets and the transition to operating expense models are reflecting the continuing transition in our economy toward services and more efficient utilization of production assets. While more efficient investment in highly utilized hard assets will continue, as services play a more central role in the U.S. economy than manufacturing, growth in capital expenditures will be driven more by money spent on intellectual property. Intelligent business investment drives productivity growth, but the increased focus on soft expenditures, in combination with more efficient utilization of hard capital expenditures, means less can actually be more.

Odeta Kushi is deputy chief economist at First American Financial.

10/24/2019

ALTA Announces Winners of 2019 Title Webbies

ALTA announced the winners of the Title Webbies, an awards program recognizing member companies that have created or redesigned the best title industry consumer-facing website or page within the past year.

The two Title Webbies were presented during ALTA ONE, the largest annual event for the land title insurance industry, currently being held Oct. 22-25 in Austin. Nominees in the two categories—Best Website-Title Agents and Best Website-Underwriters—were judged on mobile friendliness, overall user experience, social-media integration, image/video use and content quality.

Commerce Title in Baton Rouge and Prairieville, La., was the winner in the Best Website-Title Agents category. Marketing Coordinator Katie Wilcox accepted the award on the company’s behalf.

Commerce title

“A website homepage has the ability to say so much about a business and a brand, and we wanted to take advantage of that and create something that gave the best first impression possible of our company to any potential customers,” Wilcox said. “Our intention was to immediately and attractively communicate through our website that even though homebuying can be an intimidating process, our ultimate goal at Commerce Title is to make the closing as easy and enjoyable as a piece of cake.”

Additionally, Commerce Title’s homepage gives consumers the impression that their closing is going to be a smooth celebration. The website’s language reassures consumers that Commerce Title has their closing under control. The website also provides consumers with easy access to title insurance data as well as contact information for every single person in the office.

Old Republic National Title Insurance Co., which has offices across the United States, was chosen as the Best Website-Underwriters winner. Right out of the gate, Old Republic’s homepage establishes a strong message: “We serve our policyholders with strength, stability and more than a century of experience.” The homeowner section is easy to find and packed with useful information broken up into palatable bites.

Old_republic

“It is an honor to receive this award,” said Carolyn Monroe, president of Old Republic National Title Holding Company. “The redesign and update of our website was a group effort between our marketing department and our operations. Our new website represents a small piece of the projects that we have in progress. The culture of collaboration is alive and well as we strive to better serve our agents and customers.” 

Mark Bilbrey, CEO of Old Republic Title, accepted the award during ALTA ONE.

“In the past, the title insurance industry has focused on selling our services to our professional partners, but now consumers are increasingly choosing who they work with throughout the entirety of the real estate transaction,” said ALTA CEO Diane Tomb. “A fresh, informative and engaging website can make all the difference as it often is the first impression a consumer has of any company. It is incredibly important to ensure consumers understand what happens during the closing process as well as the benefits of title insurance. Congratulations to Commerce Title and Old Republic on earning these well-deserved awards.”