ALTA Compensation Index Helps Title Agents Evaluate Salary, Benefits Packages

Benchmarking is an important tool and worthwhile investment for human resource departments to help support the organization by attracting and retaining the talents needed while managing salaries and costs of the organization in the right manner.

From a staff perspective, it is important to ensure fair salaries in terms of internal and external benchmarking. To help the title industry with this, ALTA created the Title & Settlement Services Industry Compensation Index. The Compensation Index is designed to help professionals easily examine the full value of their compensation packages and compare their business to competitors. It can compare salary rates for existing positions and assist in analyzing the current market for new roles.

Compensation index sampleJennifer Luedtke, human resources manager for Town n’ Country Title in Wisconsin, said her company took the time to complete the survey because she believes it will better the industry.

“This information will help set a standard across our markets for compensation and open up ideas to see what others are offering for benefits,” she said. “We have nine branches and completing all of the data took quite some time, but it was well worth it. The ALTA team put a lot of time and effort into developing this tool for us, so it was a no-brainer to participate.”

Frank Pellegrini, president and CEO of Prairie Title in Illinois, also sees the importance of the project because it allows him to benchmark his company’s salary and benefit offerings with other similar companies in the region.

“This will help us be competitive in attracting the best and brightest candidates for positions in our company,” he said. “In addition, this information will help groom future leaders in our businesses and in our industry.”

Having concrete salary data consequently eases communication to employees and managers. From an economic point of view, employee costs are typically one of the major cost items within the organization. This means human resources is a key cost driver. Benchmarking helps to make the right decisions in terms of salary management and influences the cost management of the organization. These two aspects have a significant impact on risk management when considering losing key talent as well as incurring escalating costs.

ALTA’s Compensation Index provides results showing the 25th percentile, median and 75th percentile of responses—as well as where a company falls—in easy-to-read graphs.

Companies that have completed all the required questions in the Compensation Index can examine the national aggregate results. All company data is collected through a secure third party. Individual data is kept confidential.

Pellegrini plans to use the survey results to help compare their compensation structures to prevailing trends.

“We will be better equipped to evaluate our programs and adjust where we think necessary,” he said.

While results weren’t surprising, Pellegrini said the information extracted confirmed some of his company’s approaches, while simultaneously suggesting areas that need review, adjustment or enhancement.

“I have learned over the years that every hire is unique,” Pellegrini said. “What is essential to one candidate may be nearly meaningless to the next. I don’t see the survey results changing my approach in this respect, but there is no substitute for reliable information. With access to a greater pool of ideas, we can approach the recruitment process with more confidence.”

Luedtke also plans to use the data to better project their future compensation structure and build a richer benefits package.

“I want to make sure that our company is staying competitive and we are offering the best we can to our employees,” she said.

Luedtke agreed that the results aren’t too surprising. As a small, family owned business, the company must remain competitive with others in their market.

“It was nice to gather some ideas for benefits we may be able to offer in the future,” Luedtke said.

The Compensation Index provided this needed data and will help provide the baseline for when Town n’ Country Title updated its compensation structure in 2020.

“Our roles are hybrids of two or more positions as one, such as title examiner and searcher, so making sure that we are in an average range of those positions is necessary In addition, pricing out benefits every year is something we already do, but being creative on what we can offer to make the overall compensation more desirable to the employee will be added.”

Compensation Index FAQs

  • Take the survey and view results: alta.org/compensation
  • Who can enter data? The primary contact or a designated individual can complete the Compensation Index on behalf of each company location.
  • Who can review the results? Because of the highly sensitive nature of the data contained in the survey, full access to the Compensation Index is restricted to a location’s primary contact and/or the designated individual.
  • When the results be available? Data is available now. Participants can filter results to compare themselves with other companies as well as download Excel reports and PowerPoint slides. However, a minimum of five data points must meet the filter requirements for the results to display.
  • What data will I need to enter?
    • Company demographics by location (state, revenue, staffing numbers, expenses, etc.)
    • Compensation data by position (rates, bonuses, hours worked, etc.)
    • Information on the benefits packages your company offers


Report: Business Ransomware Skyrockets

Researchers noted that ransomware took a hiatus after its 2016 and 2017 heyday, but according to the latest report from Malwarebytes, it’s back in a big way—targeting businesses with fierce determination, custom code and brute force.

Ransomeware chartMalwarebytes reports that over the last year, business detections of ransomware rose 365 percent from Q2 2018 to Q2 2019. Meanwhile, consumer ransomware incidents declined both year-over-year (12 percent) and quarter-over-quarter (25 percent), according to the report.

The reason behind this shift: Cybercriminals are searching for higher returns on their investment, and they can reap serious benefits from ransoming organizations over individuals, who might yield, at best, a few personal files that could be used for extortion or identity theft.

"Cybercriminals have decided to pull back on targeting home computers to instead focus on endpoints plugged into larger networks of sensitive and proprietary data," Malwarebytes said. “Encrypting sensitive proprietary data on any number of endpoints allows cybercriminals to put forth much larger ransom demands while gaining an exponentially higher chance of getting paid.”

The ransomware families causing the most trouble for businesses this quarter were Ryuk and Phobos, which increased by an astonishing 88 percent and 940 percent over Q1 2019, respectively. The Rapid ransomware infections increased 319 percent year over year.

The United States accounted for 53 percent of incidents observed between June 2018 and June 2019, with the three most populous states—California, Texas and New York—experiencing the most infections.

Ransomware map“We’ve seen an increase of over 300 percent in ransomware detections on businesses, and many new, dangerous families are gaining market share as the top dogs of the ransom game,” Malwarebytes concludes in its report. “Yet, despite the success of these new threats, which are using advanced technology and sophisticated attack vectors, we still see remnants of long-dead families, such as Cerber and Locky, which could continue causing damage—or at least mark users as future targets—if not removed.”

When focusing on a new target, the same old tools won’t cut it anymore. Cybercriminals know they must evolve their tactics in order to stay ahead of security researchers and penetrate more sophisticated defenses paid for with bigger budgets.

Malwarebytes reported that the latest ransomware variants observed in second quarter of 2019, including Ryuk and RobinHood, have adopted specific, customized focuses for their targets. Some are deployed only when the time is right, rather than waiting for a user to take the bait. Others are launched as a second or third payload of another Trojan attack. In some cases, ransomware is executed manually, making its identification and removal difficult for those protecting the network. Here’s a look at three ransomware tactics work.


WannaCry and NotPetya were two of the first ransomware families to have exploit code as part of their primary functions. These exploits target Server Message Block (SMB) vulnerabilities. SMB is a file sharing protocol that allows Windows systems connected to the same network or domain to share files. SMB also enables computers to share printers and serial ports from other computers within the same network.

The SMB-targeting exploits, including EternalBlue and EternalRomance, allow their viruses to spread laterally through connected systems in a wormlike infection, bringing cybercriminals multiplying returns for little effort. Since the introduction of these exploits in 2017, Malwarebytes has seen EternalBlue and EternalRomance used in other ransomware families and, more commonly, in various forms of Trojan, empowering them to breach entire networks in one swoop.

Blended Attacks

Business-oriented ransomware attacks that began in late 2018 have relied upon extra help from some popular and dangerous Trojan families.

Ryuk ransomware, for example, is after endpoints that are already infected with Emotet and TrickBot. Emotet starts the infection chain, attempts to spread itself via spamming module, and then drops additional malware. One of the common drops Maywarebytes has observed over the last eight months is TrickBot, which is capable of brute-forcing credentials, using the EternalBlue exploit to move laterally through the network, as well as other modular components that gain persistence, propagate, harvest emails and steal Bitcoin wallets.

Likely once all meaningful data has been stolen, these families achieve full network infection. At this point, TrickBot then downloads and executes Ryuk on all affected systems, causing a mass and instant ransoming of hundreds of thousands of files, adding insult to injury.

Manual infection

In 2018 and 2019, Malawarebytes noticed a trend opposite of what it regularly sees with ransomware: the manual execution of ransomware on a network endpoint.

This method requires an already-breached network, which is achieved in any number of ways. Once on the network, the attackers can prepare the environment for a ransomware attack by disabling security software. Families such as SamSam and Robinhood primarily use this attack method.

Manual infection is a step above a “regular” Trojan or ransomware attack, in that the cybercriminal’s ability to ransom, steal, and disrupt organizational operations are far more effective, which in turn yields greater returns. Of course, by manually attacking a network, threat actors put themselves at risk of discovery if they don’t do enough to hide their source location and activity.

The encryption algorithms of the new generation of ransomware, as well as their techniques for avoiding detection, will only become even more difficult for traditional security measures to defeat.

Maywarebytes predicts manual infections will increase, allowing for attackers to disable security tools and launch ransomware on their own. Additionally, the report concludes there will be more blended attacks on the horizon. Rather than relying on downloaded threats from a command and control server, ransomware will include worm-like functionality that allows it to spread, as well as Trojan elements that allow it to go unnoticed on organizational networks and encrypt files offline.

“Today’s ransomware doubles down on previous ransomware techniques by circumventing earlier protections that were developed in 2017 to stop them in their tracks,” according to the report. “Modern ransomware finds new ways onto the network, spreads instantly, sneaks past the programs of many cybersecurity vendors, and achieves persistence.”


iTitle Agent: Automation and Artificial Intelligence Can Reduce Costs, Improve Efficiency

By Jeremy Yohe

Discussions around artificial intelligence (AI) and automation often range from apocalypse to utopia. The truth lies somewhere in between.
According to the Metropolitan Policy Program at Brookings, the power and prospect of these technologies initially alarmed experts, fearing that machine advancements would destroy jobs. The conversation now seems to be more balanced, accepting that robots are coming while also acknowledging there’s no need for scary dystopian alarms. The Brookings report found that about a quarter of U.S. jobs (36 million in 2016) face high exposure to automation in the coming decade. The most vulnerable include office administration, production, transportation and food preparation.

For title professionals, the emergence of artificial intelligence, automation and other technologies may seem daunting and alarming, but the solutions offer opportunities to help title and settlement companies meet evolving customer needs.

To understand how these technologies could help your operation, you need to know what each can accomplish. First, automation completes a specific task using technology—generally taking over repetitive and monotonous duties. There are plenty of these tasks in our world. Once called macros, they’re now known as robots. Meanwhile, artificial intelligence is the effort to mimic human thinking and reasoning using programs that write themselves via machine learning. To explain further, machine learning uses programs that update algorithms without additional human intervention based upon the analysis of large data sets to identify patterns of behavior, actions and results.

“The title industry is constantly automating more tasks. This isn’t new,” said David Floyd, chief data officer at NextAce. “What’s new is the application of AI to automation, which allows a huge leap forward in the things you can automate and how quickly you can automate.”

Marvin Stone, senior vice president of business integration for Stewart Title Guaranty, said this “Fourth Industry Revolution” is being driven by the combination of advances in computer technology and big data. He said cloud-based platforms opens the opportunity for more to utilize this technology.

“It would require a huge investment if we all had to develop these on our own, but they are available through various cloud providers,” Stone said. “As the title insurance industry more effectively collects, standardizes, digitizes and compiles data, it will allow for the enhanced application of AI and dramatic opportunities for automation.”

The application of artificial intelligence with machine learning is the next stage. Other lines of insurance are looking at AI in three big ways, according to Stone. These include setting pricing at individual levels based on risk, underwriting and analyzing data, and claims handling.

Stone said the claims process looks different in the title industry compared to other lines, but “we deal with this every day in title insurance, so we can expect to see application of this in a few years.”

Automation chart

In one example, video card manufacturer Nvidia is applying its facial recognition technology to collect data on homes following storms to find out the level of damage based off drone photography. Stone said this could be extended into the real estate and title space. Meanwhile, real estate agents are using autonomous cars to ferry people to home showings. Amazon’s suggestion engines have been around for years. Additionally, the suggestion engines employed by Amazon when shopping online are now being applied in the home shopping space.

“Automation is not about Terminator or HAL 9000—it’s really about bringing efficiency and addressing what you can do today and utilize technologies that are out there,” Floyd said.

Why Automate?

The chief reasons to automate tasks is to reduce costs and improve efficiency. Citing a Forbes article from 2018, Floyd said it costs 10 times more to run a title agency than it did 15 years ago.

“There’s huge pressure to reduce operating costs and figure out how to do things more efficiently,” he added.

Improving speed and accuracy of the transaction are other drivers for automation. “Every time a new technology makes turn times more effective, there’s greater pressure, and it becomes an expectation,” Floyd said.

An aging workforce and knowledge loss also fuel the need to automate certain tasks. Floyd said automation and AI can help memorialize the knowledge held by those retiring and spur the development of new ways to complete processes.

“As we look at automation and AI, we always must look at it through the lens of improving the customer experience through efficiency, quality and ease of use,” Floyd said. “Whether it’s the consumer, lender or real estate agent, we always want to make it a more efficient process. The use of technology is now an expectation and a driver for why someone will want to do business with you.”

Automation map

Where Is Industry Applying Automation?

The title industry has used automation in various parts of the process for many years. Here’s a look at a few:'

  1. Task and Process Tracking via Production Software (order through closing): Over the years, title production software companies have made great strides in automation that eliminates rekeying and the transferring of data from one application to another. This streamlines the order process and eliminates duplicative tasks.
  2. Automated Reconciliation: This allows title companies to reconcile accounts in a more timely manner and address issues more effectively.
  3. Workflow Management: As the industry improves automating tasks, it can start automating workflow a little more.
  4. Communications (automated emails, reminders, confirmations, notifications): Automating communications such as email are things that can be simple to implement in a title production system and are often overlooked.
  5. Title Production Automation: Floyd said we are starting to see quite a few players offering title production automation, including underwriters, third-party vendors and business process outsourcers.
  6. Commitment Preparation: The application of Optical Character Recognition (OCR), which is technology that enables different types of documents—such as scanned paper documents, PDF files or images—to be converted into other documents, continues to improve as the digitization of records has increased.
  7. Search and Examination: Searching is a pretty automated task that typically involves going into a database or title plant and pulling search results onto a screen or printout. The examination process follows.

Floyd said this is based on decision trees and a “very definable process with lots of ifs and buts. But through technology, you can automate more of the search and title exam process.”

“Some items such as communications are much easier to implement, but this goes to the fact that this is a continuous process in innovation and development to ensure we are all getting a little better,” Stone said.

Implementing Automation

Two terms people should become familiar with are bots (short for robots) and Robotic Process Automation (RPA). Nearly every repeatable computer task is open to using this RPA technology, according to Floyd. As an example, say a title company has a searcher who on a daily basis logs into a county website and enters a search that could include a name or legal description. After hitting Enter, results can be extracted.

“That whole process can be automated,” Floyd said. “Using RPA or other automation tools can deliver results back to another application.”

Many business process outsourcing (BPO) vendors already have applied these robotic processes to make searches more efficient and deliver faster turn times. Now, these companies are applying AI on top of the automation and making a leap forward on how quickly tasks can be updated.
Challenges with some automation tools include the ongoing management costs. Floyd said companies need to look at the cost of monitoring and programming for changes in procedures or source data versus labor to perform the task.

“It might be difficult to automate points that change constantly,” he said. Assessor data is one example. While there are automation tools that can capture this data, Floyd said assessors are notorious for updating information, and changing screen layouts and how data is formatted.

“This needs to be accounted for because now you’re switching some of your labor costs to management and programming,” Floyd said.

An item to think about is that frequent changes to source data and procedures will result in higher management cost and might drive implementation of technologies. The benefits include quicker turnaround, reduced labor management and more consistent procedures and quality.

“When implementing this in the title space, one of the things to think about in general is that most of the work we do is a pretty straightforward lot and block, subdivision type search on a resale or a refi where you aren’t going back that far,” Floyd said. “When looking at how to apply automation, start with the easy stuff. You can use RPA and pull in search results, and based on underwriting standards, you can deduct how many deeds back you need to go. Is the chain present? Are there additional names that need to be run?”

Stone said many title companies get hung up on the 100-percent rule versus the 80-20 rule. To help make automation more palatable, he suggested focusing on a particular segment of the business or a particular process that could be improved through automation.

“People are often unwilling to get started because they can’t do the big stuff,” Stone said. “Pick something and get a feel for it.”

Where Does AI Fit?

AI is already being used in many areas in the transaction, including:

  • Valuation models
  • Risk assessments
  • Workflow management
  • Fraud detection
  • Customer experience

Floyd said AI can identify the type of transaction based on search results. Running against algorithms, the complexity of an order can be determined and assigned to a specific person who’s best prepared to handle the transaction.

“One of the key areas helping to limit risk and workflow management is being able to direct a transaction to the best resource within your organization. In terms of automation, it allows a company to reassign an entire workforce from the mundane task-based processes and get them focused on revenue and risk. One of those is fraud. AI will play a major role moving forward in fraud prevention.”

Stone added that, through available technology and various vendors, title companies can bucket orders.

“The integration of more software with title production systems allows companies to analyze risk on a particular property or search and help them figure out how to manage the workflow and put it into the appropriate bucket, so the right things are being done by the right people.”

Despite all the benefits of automation and AI on the front end of the transaction with the search, Floyd says the industry must stay mindful not to forget about the curative process.

“That’s a large part of our lives and a reason why our datasets are so strong,” Floyd said. “We cure as we go along. As we look at title automation, that side of it can’t be missed and will be part of that risk profile. What curative actions need to happen and how do you automate the curative actions.”
Ultimately, the technology should lead to better customer service by analyzing the transaction on the front end. Interaction with customers can be tailored similar to the experience users have grown accustomed to Amazon—when you log in, it knows your trends and makes suggestions.
“That will cross into our realm in the next few years,” Floyd added.

The basis of artificial intelligence is really data—the accumulation of smaller data sets and bringing them together to paint a bigger picture. Floyd said that most documents are digitized at least back to the 1980s—and is constantly being pushed back further. Streamlining starter files could be one area to improve the process and be used to automate the search. Newer areas of application deal with consumer data, such as the types of deals they typically handle. Data sources include:

  • Digital documents
  • Public records
  • Assessor
  • E-recording
  • Starter files
  • Customer demographic data
  • Consumer profiles
  • Credit histories
  • Economic data
  • Transaction histories
  • Customer interaction histories

What’s a Title Agent to Do?

From a title agent perspective, Stone said this can become a big, daunting list. He said agents should reach out to vendors who can help and untangle different data sources. Floyd recommends examining each computer task to understand what you’re doing and how to prioritize. He said to start with easier transactions such as refinances and expand to other products.

Title agents also don’t have to develop these technologies on their own. Floyd suggested finding partners. The best advice is to complete a full review of workflow and processes, and then decide where improvements can be made.

“Everyone needs to pick up the phone and find out what their vendors can do. And tell them what you want to do,” Stone said. “Vendors are looking at this technology and thinking of ways to make title agents’ lives better. They are listening and want to provide automation where they can.”

Roadmap to Automation

  • Inventory Tasks: ­Review tasks you do every day
  • Prioritize: Don’t do everything at once
  • Educate: Develop internal subject matter expertise
  • Partner: Put their expertise to work for you
  • Experiment: Proof of concept/Pilot with customers
  • Execute: Plan then execute

Jeremy Yohe is ALTA’s vice president of communications. He can be reached at jyohe@alta.org.


Wisconsin Title Industry Veteran Going Strong at the Age of 90

NichoyerNo matter what the industry, a full-time job can be stressful, exhausting, frustrating, and can cause even the most optimistic of employees to dream of retirement. Many count down the days until they are finally free of the seemingly endless cycle of work weeks that eventually start to blend together making it challenging to remember what day of the week it is. Striving for the minimum amount of working years before retirement has become a normal occurrence in our society today, however there are always exceptions. These are the people that break away from this norm and let their passion and dedication for their careers drive their success long past age 65. Nic Hoyer, full-time examiner and owner of Wisconsin Title Services, is one of these exceptions. Despite having celebrated his 90th birthday on Sept. 16, 2018, Hoyer continues to come into the office each day ready to work.

On a typical day, Hoyer strolls through the front doors of Wisconsin Title Services and greets his employees with a smile on his face before grabbing the daily paper and a stack of files to get straight to work in his office. It has been over 70 years since starting in the title industry, and still Nic continues to be an integral part of the family business. His dedication and involvement in his company are apparent to all of his employees who on a daily basis can find Hoyer in various departments within the office either working on files or helping others by sharing knowledge he has gained from his years of experience in the industry. As an owner of a company to be accessible can be challenging, but Hoyer puts forth the effort to be in his office Monday through Friday during normal work hours with his door open to create a collaborative and welcoming environment for all employees. This demonstrates his commitment and passion for Wisconsin Title Services. Hoyer could have easily retired a long time ago; however, he remains right in the middle of the action working alongside instead of above his employees in order to provide an example of the level of dedication it takes to be successful.

Hoyer’s long and prestigious history in the industry began in 1946. He followed in the footsteps of his father, William, working part time with him to operate the Kenosha County Abstract Company while also attending college. While stationed at Great Lakes Naval Training Center as a statistician after college, Hoyer continued to work with his father now helping out at the new business, Wisconsin Title Services, despite his commute between Kenosha and Great Lakes. Even straight out of college it was clear that Nic demonstrated a very rare level of work ethic and dedication to his family business. This continued to develop through his years at the company and eventually he took over for William and continues to serve as both examiner and an owner to this day, along with his daughter and son-in-law.

Along with Hoyer’s many accomplishments as owner of Wisconsin Title Services, he has served the title industry and demonstrated his leadership skills in many different roles. He is a past president of the Wisconsin Land Title Association (WLTA). His efforts and dedication to this organization were recognized in 1997 when he was awarded Member of the Year. Hoyer also served ALTA’s Board of Governors, served as Director of the Milwaukee Board of Realtors for 12 years and was a board member at the Blue Mound Country Club for six years. Hoyer played a vital role in all of these prestigious organizations while still upholding his dedication to his own business.

Hoyer continues to provide valuable leadership by example through his strong work ethic and commitment to his company and employees. Long after he began working part time with his father, Wisconsin Title Services remains a family company. His daughter, Carrie Hoyer, currently serves as treasurer/secretary, but has seen every aspect of the family business and therefore utilizes her knowledge and leadership skills to meet the needs of all customers. Mark Ciborowski, daughter Chris’ husband, has also become a key piece to the success of the company. He has been a part of Wisconsin Title since 1975, and he continues to provide valuable expertise on the commercial side of business by serving as the current vice president. Not only has Nic Hoyer inspired his own family to continue his legacy with Wisconsin Title Services, but he inspires his employees and the title Insurance community each and every day by proving that age has no impact on a person’s dedication to their passion.

How Has the Housing Market Changed Since the End of the Great Recession?

By Odeta Kushi

June marked the 10-year anniversary of the end of the Great Recession. Amid Independence Day celebrations, assessing how the American dream of homeownership has fared since the recession can provide helpful context for the health of today’s housing market. We have assembled a set of housing metrics and compared their values today with what those metrics looked like at the end of the Great Recession.

In the chart below, housing demand metrics (blue), supply metrics (green), and homeownership metrics (red) are scaled relative to their level at the end of the Great Recession (100). That means that the metrics can be interpreted as percentage gains or losses relative to that point. For example, a metric with a value of 150 today has improved by 50 percent relative to its value at the end of the Great Recession. Today’s housing market enjoys much stronger demand than a decade ago, but housing supply has slumped.

070919 Housing Health Spider Chart

Increased Affordability and Greater Access to Credit Boost Demand

Since the end of the Great Recession, affordability has improved, largely driven by lower mortgage rates and rising household income. Mortgage rates are even lower than a decade ago--the 30-year, fixed mortgage rate in April was 4.1 percent, 1.3 percent lower than in June 2009. The lower mortgage rate, combined with higher household income, has increased consumer house-buying power by 54 percent since the end of the recession. At the same time, credit availability has improved by 30 percent according to the Urban Institute Credit Availability Index, increasing the number of potential home buyers.

While nominal house prices are now 51 percent higher than at the end of the Great Recession, nominal house prices do not tell the full story on affordability. The Real House Price Index (RHPI), which adjusts nominal house prices for the influence of changes in household income and the mortgage rate on consumer house-buying power, is at the same level as 10 years ago. Greater consumer house-buying power has offset the increase in nominal prices.

More house-buying power and expanded access to credit, along with a demographic tailwind from millennials aging into prime home-buying age, all bode well for housing market demand. The question is whether there are enough homes for sale to meet this surging demand.

Supply Deficit Grows

The short answer is no. Inventory turnover, the total supply of new and existing homes for sale as a percent of the stock of residential houses, has declined by 16 percent since 2009. A major reason for the lack of homes for sale is increasing tenure--the length of time a homeowner lives in their home. In the years following the recession, tenure has rapidly increased and it is currently more than 11 years, compared to just under seven years at the end of the Great Recession. Increasing tenure means existing homeowners, who supply the majority of homes for sale, are not selling and is the byproduct of two trends--older homeowners aging in place and many existing homeowners being locked-in with historically low mortgage rates.

A natural solution to a housing supply shortage is to build more homes. Yet, for more than a decade, home building has not kept up with the demand for shelter. While housing starts, a leading indicator of new home completions, have doubled since the lows reached at the end of the recession, they remain 33 percent below their 2000 level.

The home-building deficit (not pictured), which is the difference between the addition of new homes to the housing stock and new demand for homes from household formation, has been cut in half since 2009. However, the gap between supply and demand today remains high. In 2018, 1.2 million new households were formed, while net new supply of housing units was below 900,000 units. New household formation is expected to continue to grow as millennials are still forming households, so the need for more housing is likely to also grow.

Housing Largely Recovered, But Lack of Supply Lingers

Despite a lack of supply, the homeownership rate has increased from a low of 63.4 percent in 2016 to 64.4 percent in 2018, which is very close to the homeownership rate at the end of the Great Recession. First American's Homeownership Progress Index (HPRI), which estimates the homeownership rate given the underlying demographic and economic conditions, trended upward since 2010 and is currently 73 percent. The increase reflects the impact of millennials pursuing higher education and making other key life decisions that increase the likelihood of homeownership.

After 10 years, the housing market has recovered from the Great Recession by many metrics. Demand is stronger, but a decade of building deficits has helped create a significant supply shortage. After all--you can’t buy what’s not for sale.

Odeta Kushi is deputy economist for First American.


Zealous Gen Z: Many in This Group Saving Early to be Homebuyers by Age 25

Gen z graphicGeneration Z is ambitious about homeownership, and it shows through their savings habits. According to realtor.com, Gen Z-ers (ages 18 to 24) interested in homeownership are two times more likely than previous generations to be saving or plan to be saving for a home by age 25—and two of five Gen Z-ers are aiming to become homeowners by that age.

These insights are the result of a survey realtor.com conducted in conjunction with Harris Interactive, which included responses from 3,372 Americans across Generation X (ages 35-50), millennials/Generation Y (ages 25-34) and Generation Z, to better understand the generational differences in relation to homeownership and aspirations.

“Gen Z-ers don’t just want to become homeowners; they want to do it at a younger age and we found that they’re saving or planning to save for it accordingly,” said Danielle Hale, chief economist at realtor.com. “Their desire for homeownership may be similar to that of millennials and Gen X-ers, but graduating into one of the best labor markets in generations might give them the boost they need. Only time will tell if Gen Z-ers are able to achieve their ambitious goals.”

Generation Z’s homeownership fervor closely resembles that of millennials and Generation X, as 79 percent are certain they want to (or already do) own a home, compared to 82 percent for both Gen Y and Gen X. A larger share of Gen Z-ers are open-minded and may be interested in pursuing homeownership sometime in the future (17 percent), compared to millennials (13 percent) and

Gen X-ers (11 percent). Accordingly, Gen Z-ers who answered “yes” or “maybe” to desiring homeownership are more than twice as likely to have started or plan to start saving for a home before age 25 (74 percent), compared to what Gen Y (33 percent) and Gen X (33 percent) actually reported accomplishing.

Overall, only 4 percent of Gen Z-ers are sure that they don’t want to own a home, on par with the results for Gen Y (5 percent) and Gen X (6 percent). The expenses associated with homeownership are the biggest deterrent across all generations, especially for Gen Z-ers (48 percent vs. millennials at 31 percent and Gen X-ers at 42 percent). The second most-cited reason Generation Z didn’t want to be a homeowner was that they were not yet ready to settle down in one place (25 percent).

Customization is King, Especially for Generation Z

Generation Z are least likely to become or plan to become a homeowner for investment purposes (29 percent) or tax benefits (16 percent). Instead, they cite wanting to customize their space (61 percent) as the top reason for homeownership, and tied with millennials for wanting to raise their family in a home they owned (55 percent).

A Little Help From the Parents Isn’t Off the Table

Gen Z-ers are the most optimistic about getting financial assistance from their parents to reach their homeownership goals, with 56 percent saying “maybe” or “yes” to expecting or receiving financial help from family. Interestingly, Parents of Generation Z are the least likely to have received family assistance from relatives. Gen X-ers were least likely to expect or have received help from their family (59 percent no), and millennials are split down the middle (50 percent no, 50 percent yes/maybe). With a head start on savings and potentially greater access to family support, this up-and-coming generation could be better prepared to invest in real estate.

Need Help Educating Consumers?

ALTA’s Homeowner Outreach Program (HOP) has many resources to help you explain the benefits of title insurance to consumers, real estate agents and others. Items such as flyers, social media ads and blog content can be used to market your business. Check out the material at alta.org/hop.

In addition, you can register for the upcoming HOP Leader Training (Aug. 14 in Chicago) to learn how to

effectively use the resources. To view the schedule and register, go to meetings.alta.org/hop.

The Benefits of E-Recording

In 2018, the U.S. Treasury offered several recommendations to improve the electronic closing and recording process. Among them, the Treasury said that recording jurisdictions that don’t recognize and accept electronic records should implement the necessary technology updates to process and record these documents and pursue digitization of existing property records

In drafting the report, Treasury consulted many stakeholders—including ALTA leadership—focused on consumer financial data aggregation, lending, payments, credit servicing, financial technology and innovation. The Treasury said its recommendations should enable U.S. firms to more rapidly adopt competitive technologies, safeguard consumer data and operate with greater regulatory efficiency.

There are many reasons why title and settlement companies should consider e-recording, including:

  • Speed, same-day recording:
  • Lowers costs
  • Lower chance of document loss
  • Security, document integrity, encryption, secure network and less fraud
  • Faster problem resolution
  • No fee rejections
  • Streamlined payment
  • Improved customer service
  • Regulatory and lender compliance
  • ALTA Best Practices Pillar No. 4
  • Eco-friendly

Here’s a look at the operational processes and the time that can be saved by e-recording versus paper when recording:

Erecording benefits

There are also benefits on the county side as well, including:

  • Faster processing and turnaround time
  • No need to scan documents
  • Documents remain pristine
  • Less mail, fewer paper cuts
  • Incorrect fee rejections eliminated
  •  Quicker rejection resolution
  • Document control/tracking
  • Lowers document loss
  • Reduced cost on postage
  • Better customer service

“It can reduce steps by county recorders from 14 to about seven or eight,” said Bob Grohol of E-recording Partners Network.


Blockchain 101: How It Works


The Basics of E-recording

In 2018, the U.S. Treasury offered several recommendations to improve the electronic closing and recording process. Among them, the Treasury said that recording jurisdictions that don’t recognize and accept electronic records should implement the necessary technology updates to process and record these documents and pursue digitization of existing property records

Erecording_jurisdictionsEarlier this year, Kentucky passed Senate Bill 114, which reforms the state’s recording and notary laws. Beginning Jan. 1, 2020, county clerks can record real estate deeds, mortgages and other documents electronically, while notaries public will be able to notarize real estate documents electronically and remotely.

Here’s a FAQ provided by eRecording Partners Network that breaks down e-recording, how the process happens, what companies need to e-record and the benefits.

Is E-recording legal?

As of 2015, all the states in the nation have approved one or both of the following acts:

  1. The Uniform Electronic Transaction Act, or UETA, establishing the legal equivalence of electronic records and signatures to the traditional paper documents and wet ink signatures
  2. The Uniform Real Property Electronic Recording Act, or URPERA, authorizing local land records officials to accept records in the new electronic format. The only state not offering eRecording is Vermont. Rhode Island came on line 1.1.19. Kentucky will start 1.1.20.

The first e-recording was processed in 1999, 20 years ago. The number of jurisdictions across the nation that accept e-recording continues to increase. According to the Property Records Industry Association (PRIA), over 85 percent of the U.S. population resides in jurisdictions that e-record. That’s almost 2,000 jurisdictions nationwide.

The Physical Process

The best way to describe the e-recording process is to think of the internet as an electronic version of your current courthouse runner or FedEx package. E-recording is another document delivery option. The documents are scanned, become images and are submitted securely via a secure internet website to the courthouse. The image is recorded at the courthouse and returned to you through the same secure internet connection.

  • Documents are scanned and submitted via the internet.
  • The actual recording is still done by the recorder’s office in
    the recorder’s software system (LRMS).
  • Submitter receives an image with the recording stamp and information displayed. This is now the original document.
  • E-recording takes minutes or hours, versus days or weeks.
  • Rejection are reduced and turned around more quickly.

Erecording_populationWhat Do I Need?

To use e-recording, you need a computer running a current internet browser, access to a scanner and access to high-speed internet. Many of the popular title and closing software packages also integrate with e-recording vendors to help you save time and steps. In addition, you need a contract in place with an e-recording vendor. The contract will set you up as a qualified submitter and outline the payment process for the recording and submitting fees.

How Does It Work?

With most vendors there’s no software buy, install or set up. Once a closing has been completed, you scan the documents and store them on your computer. You then access the vendor’s web portal and upload your scanned images. The county may also require you to enter some identifying information about the documents for tracking purposes.

The system will encrypt and securely transmit the documents to the courthouse. Once received, the jurisdiction records the documents and returns them securely to you with the recording stamp and other appropriate information. This process is typically completed in minutes to hours versus days or weeks.

Most people then print out the first and last page of the recorded document and attach them to the original documents which never left your office. This package can then be sent to the final destination, whether that is the title insurance company, lender or new owner.

Why Submit Documents This Way?

There are several reasons to consider e-recording. The biggest reason is to reduce the turnaround time. The shorter turnaround time is also an advantage if a document is rejected. You can address issues more quickly and resubmit documents the same day. Shorter turnaround time also reduces the gap period. Submitters who deal with multiple counties can eliminate the need to have escrow accounts at each county or to issue and process individual checks for each transaction. Some submitters have also reduced their delivery and return fees by e-recording, but it depends on how your office business processes are set up. E-recording also creates an electronic record of when documents were submitted to the county and returned to help you comply with Pillar four of ALTA’s Best Practices.

  • Speed! Same Day Recording
  • Lowers Costs
  • Lower Chance of Document Loss
  • Security: Doc integrity. Encryption. Secure Network. Less Fraud.
  • Faster Problem Resolution. No Fee Rejections.
  • Streamlined Payment
  • Improved Customer Service
  • Regulatory and Lender Compliance
  • ALTA Best Practices Pillar #4
  • Eco-friendly

What If the County Rejects Documents?

If a document is rejected, you are not charged for recording fees or the transaction fee. The document is returned to you a rejection reason from the county. You can then make the needed correction and resubmit the document. If one document of a multi-document package is rejected, the whole package is returned to you so that you can keep the integrity of the document recording order.

The most common reasons rejections are image quality and not meeting the county document margin requirements. Each county has their own margin requirements based on where they place their stamps. Many vendor systems store the requirements for each county by document type, and displays an on-screen guide or template that shows those specific requirements. If potential issues are identified, the software provides you tools for error correction within the software so most of the time you do not need to rescan the document.


ClosingCorp Reports 2018 Average Closing Costs

Closing costs for a single-family property in 2018 averaged $5,779 including taxes—and $3,344 excluding taxes—according to the latest data from ClosingCorp.

ClosingCorp cost calculations include lender’s title, owner’s title, appraisals, settlement fees, recording fees, land surveys and transfer tax. To determine the average single-family home sale ranges, ClosingCorp uses home price data from CoreLogic to create a $100,000 price range.

“The average home price is a number, but not necessarily a real property with a real closing,” said Dori Daganhardt, senior vice president of data strategy at ClosingCorp. “To get a sense of what is really going on in the market, we compared real cost data on more than 1.5 million purchase transactions that went through our SmartFees platform in 2018. We also used ‘market-specific’ rates and fees charged by the most active settlement services providers in each geographic area, not just network averages.”

The 2018 report shows the jurisdictions with the highest average closing costs, including taxes, were:

  1. District of Columbia ($24,613)
  2. New York ($13,581)
  3. Delaware ($13,309)
  4. Washington ($12,667)
  5. Maryland ($11,395).

The states with the lowest closing costs, including taxes, were

  1. Missouri ($1,887)
  2. Indiana ($2,002)
  3. South Dakota ($2,149)
  4. Iowa ($2,248)
  5. Nebraska ($2,267)

The jurisdictions with the highest average closing costs, excluding taxes, were:

  1. District of Columbia ($5,694)
  2. New York ($5,586)
  3. Hawaii ($5,318)
  4. California ($5,284)
  5. Washington ($4,701)

The states with the lowest closing costs, excluding taxes, were:

  1. Missouri ($1,887)
  2. Nebraska ($1,919)
  3. South Dakota ($1,995)
  4. Indiana ($2,002)
  5. Iowa ($2,011)

“Because closing costs are based on sale price and taxing jurisdictions, the rankings of high and low-cost states tend to be relatively static,” said Bob Jennings, chief executive officer of ClosingCorp. “However, that doesn’t mean that various jurisdictions aren’t continually contemplating increases and adjustments. Our research showed more than one-third of all counties considered an adjustment to their taxes in 2018 and adjustments in more than 200 counties actually went into effect. These include some interesting twists. For example, four New York counties let their local mortgage tax expire and then reinstated the same tax; and the city of Baltimore introduced a ‘yield tax,’ which is essentially a ‘tax on tax.’ We expect to see even more adjustments in 2019, including a new law which increases the mansion tax on a sliding scale for transfers where the consideration is in excess of $2 million in New York City—already one of the cities with the highest closing costs.”

Closing fees

Source: ClosingCorp