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Important Title Insurance Industry-Related Bill Introduced in Congress

Between Best Practices coordination and the TRID implementation deadline, there has not been much room for positive news for independent land title agents.  Fortunately, that is not because there has not been good news!  Lost in the daily news cycle for title insurance was an important piece of federal legislation known as HR 1799 that was introduced by Congressman Keith Ellison (D-MN) on April 15, 2015 and entitled the Ensure Fair Prices in Title Insurance Act.  Congressman Ellison is a fervent supporter of independent land title agents throughout the United States.  NAILTA members have been working with members of Congress like Representative Ellison to help them understand the difference between independent service providers and those who are affiliated with their referral sources.  This effort has led to the introduction of this landmark bill.  HR 1799 is an important first step in the process of improving competition within the title industry and lowering consumer costs for title insurance. HR 1799 is designed to modify the Real Estate Settlement Procedures Act (RESPA) in three areas:  By extending the current statute of limitations for a real estate consumer to sue under RESPA for any violation thereunder from one year to three years from the date of the transaction.  By permitting a competitor in the title insurance industry to sue for damages under RESPA for violations of Section 8’s prohibitions on illegal kickbacks.  By limiting the compensation received by participants in affiliated business arrangements to non-referral compensation only. We are proud to support the bill.  We ask that our members review the enclosed bill. If you want to help us, please contact your... read more

SUPPORT NEEDED FOR DEBT FORGIVENESS ACT – NOW ON THE HILL

Congress is scheduled to vote on the Mortgage Forgiveness Debt Relief Act (MFDRA) today.  The bill is an attempt to reclassify and thereby forgive foreclosure-related debts as taxable income.  The MFDRA has been reinstituted several times since it was originally passed in 2007.  Congress must pass this bill in the remaining days of the 113th Congress in order for the IRS to apply favorable tax treatment to struggling homeowners who use it. Proponents of the MFDRA say it will help to provide housing market flexibility by allowing homeowners to short sell underwater mortgages thereby foregoing the specter of foreclosure and keeping banks out of the business of owning real estate.  Opponents of the measure believe the MFDRA is akin to a government subsidy for the housing market because tax dollars that otherwise would have gone to the U.S. Treasury will now be forgiven as debt and not collected. NAILTA previously issued a revised white paper in support of extensions to the MDRA. Many of our members and represented industry colleagues have handled the ever-growing number of short sale transactions that have helped homeowners avoid foreclosure and maintain the continuity of land transfers. Without the MDRA, the short sale market will collapse and foreclosures will increase putting an already strained real estate market on the way backward. Support for the MFDRA from the housing industry is unanimous and the measure is likely to pass both the Senate and the House and be signed into law.  To voice your view on the measure, please contact your member of Congress today.  To determine who your representative is, please click here:  http://www.opencongress.org/people/zipcodelookup. For more information, please... read more

New York State – Title Agents Seek Clarification on Affiliated Business

The New York Department of Financial Services (NYDFS) and the Superintendent of Financial Services Benjamin M. Lawsky should be commended for addressing a long neglected consumer issue that deals with the licensing of title agents and agencies. The DFS’s concern with the lack of regulation and control over a profession that is responsible for the transference of property, the payment of funds and the proper recording of the transaction is well placed. Even though the majority of the independent settlement service providers conducted their transaction in a professional manner the bad “actors” detracted from these individuals and continued to engage freely in the excessive abuses that led to the enacting of Chapter 57 of the New York Laws of 2014. Regulation 206 seeks to address the paramount issue of referral business to an entity that has been founded with the sole purposes of becoming an additional profit center for the participants and/ or stockholders and no apparent benefit for the consumer.  As most states have a specific formula to address this issue not all states have a consistent approach regarding enforcement. In either case stipulating a specific percentage of outside business must be reasonable and enforceable. The regulation must be clear and not ambiguous with parameters that make sense for both the independent title professional and the real estate industry. The regulation must be written so as to eliminate loopholes and prevent jurisdictional disputes in enforcement. RESPRO, a national nonprofit trade organization for “one stop shopping” advocates have voiced opposition to the inclusion of the specific percentage of multiple source of business. One stop shopping has become an acronym for... read more

Ellison Speaks Out against HR 5461 and on behalf of Independent Settlement Agents and Consumer’s

As the congress continues to lash out at the Dodd-Frank Bill and attempt to diminish its effectiveness, certain members of congress continue to wage the fight for preservation of the law, maintaining the integrity of the settlement process and protecting  the consumer. NAILTA is proud to be a supporter of Congressman Ellison and members of the Democratic Caucus who continue to speak out in defense of our industry. Keith Ellison General Leave on H. R. 5461 September 16, 2014 Mr. Ellison. Mr. Speaker, I oppose The Insurance Capital Standards Clarification Act of 2014 (H.R. 5461). While I support efforts to provide flexibility under the Dodd-Frank Act’s Collins amendment by explicitly stating that regulators are not required to apply minimum leverage capital and risk-based capital requirements to firms with state-regulated insurance operations, this bill does more than that. It contains The Mortgage Choice Act of 2013, (H.R. 3211). Mr. Ellison. Mr. Speaker, as I stated during the hearing and the mark up on The Mortgage Choice Act of 2013 (H. R. 3211), there are serious concerns about steering consumers into buying title insurance with hidden commissions and inflated costs. I bought two homes in my life. Like most homebuyers, I was asked to sign a bunch of papers with lots of fees such as origination charges, appraisal fees, scoring fees, recording charges, tax service fee and title insurance. Like most consumers, I chose my title insurance provider based on referral: I did not comparison shop. For most of us, title insurance is the most expensive of the closing cost fees – sometimes running in the thousands of dollars. These fees... read more

The Insurance Capital Standards Clarification Act of 2014 (H.R. 5461).

According to our sources on Capitol Hill in Washington, D.C., proponents of the so-called Mortgage Choice Act (H.R. 3211) have attached their bill to a new piece of federal legislation heading to a roll-call vote today.  The new bill is “The Insurance Capital Standards Clarification Act of 2014” (H.R. 5461).  H.R. 5461 is designed as a means for allowing a depository institution (read: a bank) holding company to avoid the requirement of being regulated by federal banking authorities if they also file holding company registration statements as an insurer and maintain adequate levels of capital in accordance with state regulation for such insurers.  In other words, banks that want to acquire interests in insurance companies can do so in an attempt to avoid minimum capital requirements under the Federal Reserve rules created as a consequence of Dodd-Frank.   If anyone is afraid of banks in the business of title insurance, this is your day for action!   In a procedural move, the GOP proponents of H.R. 3211 have attached their bill to H.R. 5461 to push both through Congress in an attempt to present them as election theater for the upcoming November mid-terms.  A vote on the whole package of legislation will happen today.  We need you to help us stop this from happening!  We need all of you to take ten minutes of your time this morning to place a call to your Representative and to each Representative in your state delegation to tell them to vote “no” on H.R. 5461.   To find your representative in the House, please click here.   To find your representative in the Senate, please click here.       Most members of... read more

NAILTA Weighs In on Stonebridge Title, CFPB Enforcement and the Henson Case

The question of regulation and enforcement of RESPA Sections 8 (a) and (b)have been hot-button issues for the Consumer Financial Protection Bureau (CFPB) and the federal courts.  Recently, two matters have arrived on the regulatory scene that helps to define and, perhaps, alter what was previously known about compliance and we want to make NAILTA members aware of them. The first is a decision reached in a class action case currently pending in California known as Henson v. Fidelity National Financial.  That case involves the question of whether delivery services — such as from UPS or FedEx are covered under RESPA. [Editor’s note: The answer is “yes”.] To help you understand the importance of the Henson case, we have authored the enclosed memo which is available by clicking here. The second is a CFPB enforcement action against a New Jersey title insurance agency known as Stonebridge Title Agency.  The question in that case is whether “independent salespeople” can receive compensation solely from title insurance premiums based upon the referral of title insurance business if they are not also acting as an “employee” of the title agency. [Editor’s note: The answer is “no”.] Again, to help you understand the importance of the CFPB’s actions against Stonebridge Title, we have authored the enclosed memo which is available by clicking here. If you have any questions about the memos or the cases, please contact NAILTA by reaching out to our volunteers and experts at... read more

What is H.R. 4383? What Does it Do For You?

The title insurance industry is finally mobilizing itself to take positions on bills currently pending in Washington, DC.  With all the chatter recently making its way through the wires, we thought it was important to let you know how independent real estate settlement service providers and those who follow policy with NAILTA viewed the recent movements. What is Going On? The House Financial Services Committee (HFSC) recently convened a hearing concerning eleven (11) separate legislative bills that are each directed at the Dodd-Frank Act, and specifically the Consumer Financial Protection Bureau (CFPB).  This is not the first effort for the HFSC on Dodd-Frank.  Since 2011, there have been over fifty (50) such bills designed to alter, restrict or outright repeal Dodd-Frank and the CFPB. None of any consequence have been signed into law. Of the 11 current bills being pushed by the leadership of the HFSC, one has appeared on the radar screen for the title insurance industry.  That bill is known as H.R. 4383, the Bureau of Consumer Financial Protection Small Business Advisory Board Act. What Does H.R. 4383 Do? The stated goal of the bill is to modify those portions of Dodd-Frank to mandate that the CFPB Director establish a Small Business Advisory Board (SBAB) to: (1) advise and consult with the Bureau; and, (2) provide information on emerging practices of small business that provide eligible financial products or services — i.e., information on what you do every day. The bill would mandate that 12 representatives of small business meet with the CFPB at least two times per year to discuss these trends and issues, regardless of rulemaking efforts.   To see the bill’s language, click here. What is Missing From H.R. 4383? H.R. 4383... read more

HR 3211 – The bull-rush is on

Last week, the House Financial Services Committee (HFSC), in a surprise move, convened a full committee hearing on 15 pending bills including HR 3211 and “voice-voted” HR 3211 onto the House floor for further consideration. The Chairman of the HFSC, Rep. Jeb Hensarling (R-TX), ordered the voice vote on HR 3211 instead of a roll call vote, or the typical voting pattern for committee legislation because he suspected that several Republican members on the committee would vote “no” and thereby jeopardize the chances HR 3211 can move successfully in the House and the Senate.  The voice-vote was called with barely twenty members present.  It was a procedural passage of the bill. Despite our pronouncements to the contrary, we are now firmly back at work on HR 3211.  We need you and your staff to help us engage members of Congress to understand why HR 3211 and the Senate version, known as S 949, are bad for consumers and worse for small business owners in the title insurance industry. Who Stood Up for Independent Title Insurance Agents? Representative Keith Ellison (D-MN) was the lone voice of dissent in the poorly attended hearing and entered two amendments to HR 3211 that would have extended the time frame for a consumer to make a RESPA-related claim from 1 year to 3 years under the statute and would limit the amount of return a referral source would derive from their ownership in an affiliated business arrangement. Both amendments were referred to the House Judiciary Committee and additional movement on them in the Republican-controlled House is unlikely. What Now? With HR 3211 moving to the House floor, we need... read more