03/26/2024

ALTA SPRINGBOARD: Identifying Fraud Trends

Wire fraud
ALTA Board Governor Craig Haskins, CEO and President of Knight Barry Title Inc.; ALTA Member Tyler Newlon, Executive Vice President of Pioneer Title Agency Inc.; and ALTA Member Jeff Richardson, CIO of Shaddock National Holdings

Real estate wire fraud and seller impersonation fraud were on the top of the hit list during an Idea Festival at the 2024 ALTA SPRINGBOARD in Oklahoma City, Okla. ALTA Board Governor Craig Haskins, CEO and president of Knight Barry Title Inc.; Tyler Newlon, executive vice president of Pioneer Title Agency Inc.; and Jeff Richardson, CIO of Shaddock National Holdings, helped attendees understand what their businesses are up against during a panel on industry fraud trends.

“Fraudsters have gotten pretty impressive and brave,” Newlon said. “(My title insurance company) has seen every party in a real estate transaction participate in a seller impersonation fraud case from the notary on down.”

The best way to prevent real estate-related fraud is to get involved at the beginning of every transaction and communicate with all parties in the transaction, he noted. “Make sure you start early and communicate,” Newlon said.

03/21/2024

ALTA Good Deeds Foundation Awards $132K in Grants

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The ALTA Good Deeds Foundation awarded a $6,000 grant to Neighborhood Housing Services Oklahoma Inc., a nonprofit that helps would-be homebuyers access affordable housing, in Oklahoma City, Okla.

The ALTA Good Deeds Foundation announced the recipients of the latest round of grants totaling $132,000.

“Having raised more than $1.3 million and awarded a total of $976,000 in grants to small, local organizations in 43 states and the District of Columbia, the Foundation has done incredibly meaningful work for communities across the United States since 2020,” said Foundation Board Chair Mary O’Donnell, president and CEO of Westcor Land Title Insurance Co. and past president of ALTA. “By providing grants to community nonprofits, title insurance professionals and the ALTA Good Deeds Foundation are able to make a huge impact.”

Twenty-one $6,000 grants were awarded to charities supported by ALTA members. The grants were awarded to:

  • Ace the Stigma, Charlotte, N.C.
  • Convergence Ohio, Columbus, Ohio
  • ANT’s Army, Charlestown, Md.
  • Bloomin’ Boutique, Oregon City, Ore.
  • City Mission of Findlay, Findlay, Ohio
  • Cooper Cares Inc., Philadelphia
  • Donnelly Food Pantry, Donnelly, Idaho
  • Emerge Food for Autism, Baton Rouge, La.
  • For Pete’s Sake Cancer Respite Foundation, Plymouth Meeting, Pa.
  • Forget Me Not Families, Newark, Del.
  • Hand2Hand, Jenison, Mich.
  • Maria’s Closet, San Pedro, Calif.
  • NeighborWorks Southern New Hampshire, Manchester, N.H.
  • Realtor Community Housing Foundation, Lexington, Ky.
  • Ronald McDonald House Charities of Oregon & SW Washington, Bend, Ore.
  • The Harford County 4-H Camp and Deer Creek Overlock, Street, Md.
  • The Landing, Houston
  • The People Center, Spring Lake, Mich.
  • Two Sparrows Village Inc., Fayetteville, Ga.
  • Uvalde CISD Moving Forward Foundation, Uvalde, Texas
  • Westbury Open for Rett Research, Elkhorn, Neb.

The Foundation also awarded a $6,000 grant to Neighborhood Housing Services Oklahoma Inc., a nonprofit that helps would-be homebuyers access affordable housing, in Oklahoma City, Okla., the host city of this year’s ALTA SPRINGBOARD. To see an example of the types of charitable organizations that receive grants from the ALTA Good Deeds Foundation, click here.

“It is incredibly gratifying to be able to enhance the great work of our members by supporting the nonprofits they are currently working with, especially organizations that support affordable housing—including Convergence Ohio, NeighborWorks Southern New Hampshire and many more--and help more people achieve the American Dream of owning a home,” said ALTA CEO Diane Tomb. “I am so proud to be a member of the title insurance industry, which encourages and champions this meaningful work our members do in their communities.”

The ALTA Good Deeds Foundation was launched in 2020 to bolster the charitable efforts of ALTA members. Title insurance professionals can apply for grants on behalf of recognized 501(c)(3) organizations that they support financially or through volunteer efforts; preference is given to housing-related charities. To give to the Foundation, visit altagooddeeds.org/donate or text GOODDEEDS to 44321.

ALTA SPRINGBOARD: Bulletproof Strategies for Leading Fearlessly

Poumpouras
Evy Poumpouras, a former Secret Service Special Agent, speaks at the 2024 ALTA SPRINGBOARD. Photo credit: Shawn Sullivan

By Megan Hernandez

Leadership doesn’t automatically belong to the person with the most seniority or the one with the best networking skills—leadership is something that comes from within.

Evy Poumpouras, a former Secret Service Special Agent and interrogator, shared her insights on leadership during the FNF Family of Companies-sponsored Idea Festival at the 2024 ALTA SPRINGBOARD in Oklahoma City, Okla. She noted that leadership is about building genuine connections with others.

From her 12 years protecting the world’s most high-value assets, including U.S. Presidents and First Ladies, as well as interviewing terrorists, Poumpouras took away hard-won lessons on how to shape a resilient mindset, communicate with maximum impact and create authentic relationships—yes, even with the bad guys.

Good leaders know how to be strong listeners, Poumpouras said. She described watching former President Bill Clinton interact with everyone from heads of state to the public and called on an ALTA SPRINGBOARD attendee to help her demonstrate. As she bent down to look her volunteer in the eyes, she used Clinton’s Arkansas draw: “Hello there, and what is your name,” she asked. “Justin,” the volunteer said. “Justin, it’s so good to see you. And where are you from, Justin?,” Poumpouras asked. She continued the conversation, using the attendee’s name approximately five times in less than a minute. Additionally, Poumpouras didn’t talk about herself during the conversation, she simply asked questions and listened.

“Take people in,” she said. “Open your eyes, and listen. Be there” without distractions.

The one thing she never saw a U.S. President do? Hold their cell phone—on or off—while they spoke to someone. “Put your phone AWAY,” she emphasized. “Phones kill trust. Just the fact that your phone is out—even if it’s face down—decreases your attention by 30 percent.”

The two characteristics people appreciate in a leader are warmth—being open, welcoming, approachable and non-judgmental—and competence. 

Good leaders understand the “rules of engagement,” Poumpouras said. Don’t cut people off or finish their sentences. Be mindful of when and how you correct others.

“The whole point is to make people feel connected,” she said. “You have to build rapport.”

Finally, good leaders also know how to accept and adapt both to other people and situations. “People have difficulty accepting the reality of a situation,” she said. But until you can accept the obstacle or the person you’re speaking with, you won’t be able to adapt to it.

“Accept the truth of what truly is,” Poumpouras said. “Accept both the person and the problem—that does not mean agreement.”

You can accept a person or situation without agreeing with them, she noted. She gave an example about questioning a terrorist. Of course, she didn’t agree or condone with what the terrorist was accused of doing, but she had to accept who he was and how he thought to build trust so he would answer her questions honestly.

Her point was that no matter the situation, whether in your personal or professional life, you must be able to accept what’s happening in the now before you can have any influence over it.

“Being adaptable is power,” Poumpouras said. Attempting to make others adapt to you is not leadership, “but when you can adapt to a situation, that gives you the power.”

03/14/2024

Breaking Down the FinCEN Anti-Money Laundering Rule: Who is in Charge of Reporting?

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking that would require certain people involved in real estate closings and settlements to report information to the agency about all-cash residential transactions nationwide involving legal entities and trusts. You can read a summary of the proposed rule's requirements here.

ALTA analyzes various parts of the proposal to help title and settlement professionals understand the impact it will have on their operation.

Here’s a look at who must report the information to FinCEN:

In general, the settlement agent—whether an attorney, escrow agent or title agent—will have responsibility for reporting a transaction under the rule. However, what happens if there is no traditional settlement agent? In that case, FinCEN’s rule provides a waterfall (FinCEN refers to this as a waterfall and a cascade) of who can and should report information from a transaction.

The Reporting Waterfall

According to the rule, a real estate professional would be a reporting person required to file a report and keep records for a given transfer if the person performs a function described in the waterfall and no other person performs a function described higher in the waterfall.

For example, if no person is involved in the transfer as described in the first tier of potential reporting

persons, the reporting obligation would fall to the person involved in the transfer as described in

the second tier of potential reporting persons, if any, and so on. For any reportable transfer, a potential reporting person would need to determine whether there is another potential reporting person involved in the transfer who sits higher in the cascade.

  • First choice: The person who is listed as the settlement agent on a settlement statement
  • Second choice: The person that prepares the settlement statement
  • Third choice: The person that files the deed for recordation
  • Fourth choice: The person that issues the owner's title insurance policy
  • Fifth choice: The person that dispenses the greatest amount of funds
  • Sixth choice: The person that did a title examination
  • Final choice: The person that prepares the deed

FinCEN also notes that companies or individuals within the waterfall can collectively agree to designate others in the waterfall to be the reporting person. How these agreements will work and whether other parties will be willing to take on this role is a major unknown.

Relevant part of the rule: (section c (1)) and (section c (3))

03/13/2024

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02/29/2024

Have You Heard of Lender Fraud? Email Solution Helps Title Company Prevent Theft

Example of rpost

Paul Hofmann WTP attends ALTA’s Large Agents Conference because he gets to hear from similar-size companies about the issues they are facing. During the January event, Hofmann learned about a service that tracks outbound email and monitors for anomalies after it’s delivered.

Intrigued by the technology, Hofmann, owner of Washington-based Aegis Land Title Group, signed up with RPost. A day after implementing the solution, Aegis Land Title Group detected two of their emails were opened in Russia.

“Seeing the emails were opened in Russia was an immediate red flag,” Hofmann said. “Then we had to start investigating and making phone calls.”

That’s when things really started to get interesting.

The title company’s emails were delivered to a U.S. server and then auto-forwarded and opened on mobile devices in Russia. This activity triggered high-risk alerts back to Aegis’ security team. A quick investigation revealed the title company was involved in a transaction with a fraudulent lender.
Aegis was working with a borrower refinancing two commercial properties. The consumer found the lender online. It turns out the lender was a fake. Despite having the appearance of a legitimate website and allegedly operating in 49 states, Aegis uncovered inconsistencies. When checking the lender’s address in South Florida, a Google Street View displayed an image of a duplex apartment. Additionally, when they called the lender’s main phone number, it was disconnected.

“I’ve been in the title for 30 years and haven’t experienced this type of fraud,” Hofmann said. “The technology is pretty simple and puts a beacon in the email. The geofencing (a virtual perimeter for a real-world geographic area) and categorizing of emails based on the country where the emails are opened and then ranked by risk made the whole package worthwhile.”

Mike Rooney, vice president of enterprise sales at RPost, said the technology pings their servers every time there’s activity with an email after it’s been delivered. The solution identifies the location, network, and several other proprietary risk indicators. RPost then uses analytical AI to make risk-based decisions for customers.

“In real time, the technology can detect these anomalies and trigger high-risk alerts to customer security teams. These alerts serve as an early warning signal and prompt proactive fraud investigations, before it’s too late,” Rooney said.

RPost’s solution also checks a nefarious network list, an evolving list of networks which has been associated with fraud in the real estate industry. Title companies that work with RPost participate in this list by providing information about suspicious networks.

“The solution was built for email eavesdropping and is now detecting different types of fraud impersonations, such as this case of lender fraud which had nothing to do with eavesdropping,” Rooney said.

Hofman said his company has already caught two other fraudulent transactions, which resulted in 30 phone calls.

“The phone calls we’ve made after getting the ‘red’ alerts have been great on the sales and marketing side because our customers really feel like we are actively looking out for them,” he said.

Hofmann added he’s seeing this type of fraud spread.

“We’re also seeing construction disbursement fraud, with criminals sending fake invoices to title companies,” he said. “Having this technology in place is key because these things are evolving fast. Title agents should also look at their passwords and auto-forward settings, and implement multi-factor authentication.”

All Cash Buyers Highest Since 2014

All cash buyers

While mortgage interest rates have risen from their all-time lows in recent years, the share of all cash buyers reached the highest level in a decade.

As of January, the share of all cash homebuyers now stands at 32% of home sales, according to a report from the National Association of Realtors (NAR). Since October 2022, all cash home buyers who did not finance their recent home purchase have been more than one-quarter of the real estate market.

The increase in all-cash transactions comes as U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking that would require certain people involved in real estate closings and settlements to report information to the agency about all-cash residential transactions nationwide involving legal entities and trusts. Read more about the proposed rule here.

Data from the last six months of the NAR’s Confidence Index shows these purchasers are more likely to be vacation buyers and investors. However, primary residence buyers are actively purchasing using all cash.

All cash type of buyer

“Looking at primary residence buyers, all cash purchases have increased in the last two years,” said Jessica Lautz, NAR’s deputy chief economist and vice president of research. “These housing consumers owned a home, sold it, and then they could purchase their next property without a mortgage. The freedom to make this purchase was likely due to the large amount of housing equity they have earned as home prices have increased in recent years.”

02/27/2024

ALTA Welcomes New Members

Membership map

ALTA is pleased to announce new and associate members, as well as real estate attorneys, who have recently joined ALTA. Over the past month, ALTA gained 167 new members, including 107 title agencies and 41 real estate attorneys. ALTA has 5,084 member companies so far in 2024. 

Click here for a list of the latest members.

Not a member? Click here to join today. You can check out member benefits here.

02/22/2024

Breaking Down the FinCEN Anti-Money Laundering Rule: When Do you Have to Report a Transaction

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued a notice of proposed rulemaking that would require certain people involved in real estate closings and settlements to report information to the agency about all-cash residential transactions nationwide involving legal entities and trusts. You can read a summary of the proposed rule's requirements here.

ALTA will break down various parts of the proposal to help title and settlement professionals understand the impact it will have on their operation.

Here’s a look at when a transaction must be reported to FinCEN:

All-cash Transactions Must Be Reported
  • Exceptions: The proposed rule does not require residential real estate transfers to be reported if the transfer involves
    1. an extension of credit to the transferee that is secured by the transferred residential real property and is extended by a financial institution (this includes most banks, credit unions and mortgage bankers) that has both an obligation to maintain an AML program and an obligation to report suspicious transactions under this chapter
    2. a grant, transfer, or revocation of an easement
    3. a transfer resulting from the death of an owner of residential real property
    4. a transfer incident to divorce or dissolution of a marriage
    5. a transfer to a bankruptcy estate
    6. a transfer that does not involve a reporting person.
Sale of Residential Property or Unit in a Cooperative
  • Real property designed for 1-4 family occupancy
  • Vacant or unimproved land zoned (or permitted) for construction for 1-4 family occupancy
  • Shares in a cooperative housing corporation
Transaction Must Be Reported If the Buyer Is:
  • A legal entity
  • A trust
Transaction Must Be Reported If the Buyer Is Not a:
  • Issuer of a class of securities under SEC Act
  • State, local, federal, tribal government authority, agency or instrumentality
  • Bank, credit union or depository holding company
  • Money services business that is registered with FinCEN
  • Securities broker dealers registered with the SEC
  • Securities exchange or clearing agency
  • Any other entity registered under the SEC act
  • Investment company as defined under Investment Company and Advisors Acts
  • Insurance company (insurer) supervised by a state insurance department
  • State licensed insurance producer (agent)
  • A public utility that provides telecommunication, electrical power, natural gas or water or sewer service
  • A futures commission merchant, introducing broker, swap dealer, major swap participant, commodity pool operator, or commodity trading advisor registered under the commodities exchange act or entity registered with the CFTC
  • Financial market utility overseen by the financial stability oversight council
  • A legal entity that is a wholly owned subsidiary of the above or directly controlled by above.

FinCEN said these entities would be exempt because they already have sufficient anti-money laundering and countering the financing of terrorism compliance obligations, and are already subject to more government supervision or have disclosure requirements.

Transactions That Don’t Need Reported
  • Grant, revocation, transfer or movement of an easement
  • Transfer resulting from probate or death of the owner
  • Transfer incident to divorce
  • Transfer to a bankruptcy estate
  • Transfer where there is no reporting person

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