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...

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...

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...

Who is RESPRO and Why Do They Support H.R. 3211?

        This is an important update on H.R. 3211. At the end of September, a bipartisan group of representatives from the House Financial Services Committee introduced a RESPRO-sponsored piece of legislation known as H.R. 3211, the Mortgage Choice Act. Instead of proceeding on H.R. 1077, known as the Consumer Mortgage Choice Act, the new bill strips out the provisions regarding lender-paid compensation to mortgage brokers and loan level price adjustments charged by Fannie Mae and Freddie Mac and focuses solely on the naked attempt by the affiliated business arrangement lobby to except affiliated service charges from the 3% qualified mortgage (QM) cap.  H.R. 1077 is effectively dead and in its place is a bill that its sponsors, such as RESPRO, originally intended — one that is designed to compensate banks and referral sources for their referral of settlement business. Who is RESPRO? RESPRO is the Real Estate Service Provider’s Council.  A non-profit trade organization that represents banks, real estate firms, mortgage companies, title insurers, title agents and homebuilders from across the United States for the sole purpose of expanding the use and prevalence of affiliated business arrangements.  If you are an independent title insurance agent doing business without buying your business, RESPRO is the organization that pushes the opposing view to yours.  They are pro-controlled business (CBA) and they lobby Congress and state legislatures to increase CBA business opportunities and, in turn, minimize truly independent title insurance agents.  Why?  Because they want to be paid for referring settlement business.  While it would appear that RESPRO would be against the mainstream title insurance industry in its efforts to protect independent land title agents, RESPRO has the membership support and sponsorship of ten title insurance...

H.R. 1077 is Dead; Replaced with H.R. 3211

Never underestimate a determined opponent. On September 28, 2013, shortly before Congress shut down, a bipartisan group of representatives from the House Financial Services Committee introduced a RESPRO-sponsored piece of legislation known as H.R. 3211, the Mortgage Choice Act. Instead of proceeding on H.R. 1077, known as the Consumer Mortgage Choice Act, the new bill strips out the provisions regarding lender-paid compensation to mortgage brokers and loan level price adjustments charged by Fannie Mae and Freddie Mac and focuses solely on the naked attempt by the affiliated business arrangement lobby to except affiliated service charges from the 3% qualified mortgage cap.  H.R. 1077 is effectively dead, but in its place is proof that the affiliate provider’s efforts were never about the American consumer — but rather only for the benefit of banks and affiliated service providers supported by RESPRO. RESPRO and the banking lobby are now “all-in” on trying to find a way to raise the cost of residential real estate closings because on the affiliate provider side of a residential real estate mortgage transaction they can hide referral payments and kickbacks from consumers without running afoul of the 3% QM cap.  It is a desperate effort to profiteer at the consumer’s unsuspecting expense. H.R. 3211 is no longer teasing lawmakers with the idea that it helps American consumers, either.  It is an “all-out” assault against lower-priced and more qualified independent service providers.  Fortunately, there is still time to act. Independent land title agents defeated H.R. 4323 and H.R. 1077.  We can do the same to H.R. 3211.  We need your help. Enclosed here is a list of all of the current members of the...

ALTA Sides with CBAs

ALTA and each of the national title underwriters joined RESPRO, NAR and MBA in filing amicus briefs in the Edwards case opposing independent title agents and supporting a narrow view of RESPA Section 8. January 19, 2011- Prior to the filing of an amicus brief in the United States Supreme Court concerning the Edwards v. First American Title action, ALTA and the national title insurance underwriters were largely mute on the subject of whether they supported or opposed the growth of controlled business arrangements.  Back in the early 1980’s, ALTA was on record as steadfastly opposing any controlled business arrangement.  However, over the last thirty years, the industry has seen the steady growth of these anti-competitive business ventures. On December 30, 2010, ALTA and the national title insurance underwriters, including Stewart Title, Fidelity National and Old Republic Title, joined with RESPRO, the National Association of Realtors (NAR) and the Mortgage Bankers Association (MBA) to file two separate amicus curiae (friend of the court) briefs before the United States Supreme Court attempting to seek reversal of the U.S. Ninth Circuit Court of Appeals decision in Edwards. ALTA and its cadre of referral sources, direct operators and other non-title insurance proponents believe that RESPA precludes suits against alleged violators unless the claimed damages stemmed from an overcharge for a particular settlement service.  By making this argument, ALTA and the national underwriters believe that the only damage caused by a controlled business arrangement is that which results in an overcharge, not the fundamental conflict of interest inherent in the controlled business arrangement or the fact that many, if not all, CBAs are nothing more than conduits for referral payments and kickbacks.  In...