Welcome to the NAILTA Blog

Don’t let RESPRO and others determine your fate?

This is another important update on the pending legislation known as the Mortgage Choice Act and efforts by the affiliated business lobby to decrease your efforts to compete for settlement business and to raise the cost of closings for American consumers. Members of NAILTA were in Washington DC on February 24th to meet with members of the House Financial Services Committee and the Senate Banking Committee to discuss potential bill alternatives to H.R. 3211, H.R. 1077 and S. 949. Our Policy and Legislative Affairs team will be back in Washington DC on March 11, 2014 to meet with more members of Congress to continue the fight against RESPRO and the banking lobby’s efforts to modify Dodd-Frank to favor their affiliated business arrangements. Our all-volunteer contingent of independent settlement professionals have over 40 meetings scheduled in one day with members of the House and Senate concerning the issues important to you and your livelihood. No other trade organization is working this hard for your interests. The Mortgage Choice Act is the pro-affiliated business arrangement bill that is designed to modify the Dodd-Frank Act’s qualified mortgage provision and exempt all points and fees charged by lender affiliates from the 3% cap on points and fees for qualified mortgages. It was introduced in the House as H.R. 3211 and in the Senate as S. 949. NAILTA opposes both pieces of legislation. Who is Fighting For the Affiliates? RESPRO, the National Association of Realtors, the Mortgage Bankers Association, the National Association of Credit Unions, Quicken Loans, and others linked to the lending industry. Each of these trade organizations has an army of lobbyists... read more

House Committee Hears From NAILTA on HR 3211

Last week, the House Financial Services Committee (HFSC) held a hearing entitled, “How Prospective and Current Homeowners Will Be Harmed by the Qualified Mortgage Rule.” Testifying for banks and credit unions were representatives of the lending industry who gave information concerning the impacts the new rule would allegedly have on their affiliated title insurance operations, among other issues. The most notable of those testifying was Quicken Loans CEO, Bill Emerson, who defended his company’s position that affiliate title operations are necessary to permit Quicken Loans to continue lending to low and moderate income Americans. There were no title insurance industry experts in attendance at the hearing and none were invited by the committee to talk on the issues relative to affiliate title providers. Despite the fact that no one from the title insurance industry was invited to attend or testify, the remaining witnesses gave numerous anecdotal examples of how affiliated title providers are “cheaper” than independent title providers, more “efficient” than independent title providers and “competing on the same playing field” as independent title providers. The members generally accepted the testimony of the witnesses as professional guidance on the values of title insurance. NAILTA did manage to submit written testimony in the form of the enclosed and was also mentioned by Representative Keith Ellison (D-MN) during this exchange with Quicken Loans CEO Bill Emerson (click here): NAILTA continues to work with Congress to increase the role of independent land title agents in Washington DC.  Those efforts are assisted by our members, like you, who support us through membership and through our political action committee.  As you can see, we are making... read more

Merger between FNF and LPS is not unexpected

As reported here earlier in September this year, the  proposed merger of the world’s largest title insurance underwriter, Fidelity National Financial (parent of Fidelity Title, Chicago Title, Lawyers Title and Commonwealth Title), and the country’s largest mortgage servicer, Lender Processing Services, is not unexpected. The original deal would merge the two giants into a “cradle-to-grave” mortgage services platform enabling the largest lenders in the United States to send a high volume of refinance business exclusively through the Fidelity/LPS system. The Federal Trade Commission (FTC) which reviews possible mergers for anti-trust and anti-competitive conduct has proposed a recent settlement. Again, the resulting merger between FNF and LPS is not unexpected.  Nevertheless, on behalf of independent land title agents who will now be prevented from having meaningful market access to the customers of the “cradle-to-grave” closed system created by the merger, we do not believe that the merged entity will help lower settlement costs for consumers or provide a healthier title insurance marketplace.  Knowing the troubled compliance histories of both of the merger participants, NAILTA and others were right to be skeptical.  We are confident that history will view our opposition to the transaction as prophetic.... read more

NAILTA Supports: The 21st Century Glass-Steagall Act: H.R. 3711 and S. 1282:

Congress has introduced two pieces of bipartisan legislation known as the 21st Century Glass-Steagall Act – H.R. 3711 (co-sponsored by Rep. John Tierney (D-MA) and Walter Jones (R-NC)) and S. 1282 (co-sponsored by Sen. Elizabeth Warren (D-MA) and John McCain (R-AZ)) in an effort to reduce risks to the financial system by limiting banks’ ability to engage in certain risky activities and limiting conflicts of interest as well as reinstating certain Glass-Steagall Act protections that were previously repealed in 1999 by the Gramm-Leach-Bliley Act (GLB). Both bills would act to prohibit banks from becoming an affiliate of an insurance company, including a title insurance company. In this way, banks that currently own or have holding company structures that own or control financial interests in title insurance companies, whether closely-held or jointly-held, would have to terminate those relationships to comply with the bill mandate. Both bills are currently in committee in their respective chambers and their future is uncertain. NAILTA has researched the bills and the predecessor legislation from which they originate from and has drafted the enclosed position paper in favor of the bipartisan legislation. For more information on NAILTA’s position regarding H.R. 3711 and S. 1282, please click here.... read more

NAILTA Supports Another Extension of the MDRA Until 2015

NAILTA supports another extension of the Mortgage Forgiveness Debt Relief Act (MFDRA) through 2015.  Why is this important? Several reasons: The debt relief law spares homeowners who receive principal reductions on their mortgages from being hit with hefty federal income taxes on the amounts forgiven. Without it, millions of homeowners who go through foreclosure or leave their homes following short sales would experience even more financial stress. The law, which is set to expire December 31, 2013, has also provided relief to thousands of people who have debt balances written off as part of loan-modification agreements and is crucial to the $25-billion federal-state robo-signing settlement with large banks. NAILTA recently 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. Independent title agents are still the consumers’ best friend and most trusted professional at a real estate closing. An extension of the MDRA would help millions of distressed homeowners find an alternative to bankruptcy and foreclosure. Extending MDRA will also help small business owners in the title insurance market remain competitive within the title community. If you are in contact with your local Congressional representative, tell them you support NAILTA and would like them to vote in favor of extending the MDRA. For more information on how you can become involved with NAILTA’s policy efforts, please contact us.... read more

NAILTA President Speaks To NAIC: Time to Prohibit AfBAs is Now!

Yesterday, NAILTA President, Anthony L. Affatati, was invited to address the National Association of Insurance Commissioners (NAIC) in Washington DC during their Fall Meeting. NAIC is the consortium of each state’s department of insurance regulator which helps to draft rules regarding the industry. Currently, NAIC is working on draft rules regarding escrow account theft and increasing the role of regulators in the title insurance industry. Our President gave an impassioned speech to NAIC on the issue of affiliated business arrangements and the harms those entities cause to competition and prices in the title insurance industry. NAILTA is seeking to help improve the role of the independent settlement service provider in regulating the industry. Historically, the information provided to NAIC has consisted of information most favorable to the conditions of the underwriter without a greater understanding of the roles played by agents. NAILTA seeks to change that.   To read Mr. Affatati’s remarks from yesterday, please click... read more

The Sprint to January 10th: HFSC Won’t Vote on H.R. 3211 This Year

Last week, we updated you on our progress with H.R. 3211, the so-called Mortgage Choice Act, that is being pushed through Congress by RESPRO, the banking lobby and others with affiliated business interests in the title insurance industry. We are happy to report that according to our contacts from within the House Financial Services Committee (HFSC), H.R. 3211 will not be voted on in the committee prior to the end of the year. That means that with the exception of four Congressional business days in January prior to January 10th, the qualified mortgage rule will most likely go into effect without H.R. 3211 and affiliate fees will thereby count against the 3% cap for qualified mortgages. The fact that no vote is scheduled is good news. However, as with any successful endeavor in Washington DC, there are far too many well-entrenched and well-financed foes to celebrate the failure of RESPRO and their allies to get H.R. 3211 passed before January 10th. Instead, with H.R. 3211 sitting on the books for the 113th Congress, we fully expect that the affiliated business arrangement lobby, which includes title insurance underwriters and large AfBA title agencies from within the title insurance industry, to continue their efforts to get their law passed. In short, it isn’t over yet. The bill still has 26 co-sponsors, the vast majority of which are Republicans, and RESPRO has succeeded in getting the Ranking Minority Member, Rep. Maxine Waters (D-CA) to take a neutral position on the measure, thereby guaranteeing that if the matter ever comes up for a vote in the House Financial Services Committee that she will... read more

The Sprint to January 10th: Update on HR 3211

RESPRO and the banking lobby continue their efforts to push the Mortgage Choice Act in Congress. The bill now has 26 co-sponsors, the vast majority of which are Republicans, and RESPRO has succeeded in getting the Ranking Minority Member, Rep. Maxine Waters (D-CA) to take a neutral position on the measure, thereby guaranteeing that if the matter comes up for a vote in the House Financial Services Committee that she will not organize support to block it. The Mortgage Choice Act is the pro-affiliated business arrangement bill that is designed to modify the Dodd-Frank Act’s qualified mortgage provision and exempt all points and fees charged by those affiliates from the 3% cap on points and fees for qualified mortgages. If the bill does not pass, the qualified mortgage provision will go into effect on January 10, 2014 thereby requiring all affiliate fees to count against the 3% cap. Who is Fighting For H.R. 3211? RESPRO, the National Association of Realtors, the Mortgage Bankers Association, the National Association of Credit Unions, Quicken Loans, and others linked to the lending industry. Each of these trade organizations has an army of lobbyists who are pushing members of Congress to sponsor and endorse H.R. 3211. The argument in favor of H.R. 3211 is potently naive. Lenders and affiliates are telling Congress that without the bill they will not be able to lend to lower income Americans. Not to be outdone by the ridiculousness of the first argument, they are also telling them that consumers prefer affiliates because they are cheaper and faster than independent providers. The rebuttal to that argument is elementary. First,... read more

HUD Ten Part Test Held Unconstitutional in Court of Appeals

U.S. Court of Appeals Issues Ruling in Carter: Shortly before everyone left for their Thanksgiving holiday, the United States Sixth Circuit Court of Appeals in Cincinnati, Ohio issued a decision in the closely-watched Carter v. Welles Bowen Title, et al., case. The Carter case centered on the issue of whether the 1996-2 HUD Policy Statement, otherwise known as the Ten Part Test, was unconstitutional because it was too vague to be enforced. The Ten Part Test was created as a policy statement by HUD to help its enforcement of RESPA’s prohibition against sham affiliated business arrangements. In other words, under RESPA, any controlled business arrangement must satisfy the basic requiremetns of disclosure, non-restricted consumer choice and investment tied to ownership interests in order to qualify as a valid entity. Anything else would not be considered a bona fide provider of settlement services. Carter sued an Ohio controlled business arrangement consisting of a real estate firm and title company which was co-owned through a holding company also co-owned by Chicago Title Insurance Company, a well-known title insurance underwriter. The main allegation for the Plaintiff in the case was that the title agency and its ownership structure was nothing more than a sham conduit for illegal referral payments in violation of RESPA Section 8 and the 1996-2 HUD Policy Statement. The case has had a long procedural history winding its way through to the Court of Appeals on two separate occasions. The most recent of which focused on a lower court ruling that the Ten Part Test was unconstitutional as it was void for vagueness and thereby unenforceable. This prior ruling... read more