Never in the history of independent land title insurance agents has the choice between action and inaction become so clear and the need for urgent advocacy been so important. If you are an independent land title agent, you need to pay close attention to the following:
H.R. 1077, the So-Called “Consumer Mortgage Choice Act”:
On March 12, 2013, Representative Bill Huizenga (R-MI) introduced the ironically titled “Consumer Mortgage Choice Act of 2013” as H.R. 1077. The bill, which can be found by clicking here, is the second attempt in as many years to modify the Dodd-Frank Act’s definition of permissible “points and fees” under the recently promulgated qualified mortgage rule (QM) which would exempt the fees charged by affiliated service providers from the rule.
Last year, Representative Huizenga introduced the same bill which was then known as H.R. 4323. That bill died in the House Financial Services Committee in July of 2012 with the help of NAILTA’s advocacy efforts. The ironic re-titling of the newly proposed bill is meant to shield the measure from public understanding of what the bill actually does. The proposed bill has little to do with consumer choice and everything to do with helping referral sources, such as banks, find alternative ways to raise revenue for making mortgage loans.
Who is Behind the Bill and Why?:
The new bill is being proposed by the banking and referral source lobbies in an effort to provide those groups with a vital source of revenue — the title insurance premiums and fees generated by those entities. The proponents of H.R. 1077 incorrectly argue that, without the amendment, low to middle income Americans will be unable to obtain access to affordable residential mortgage loans. However, there is an incredible lack of statistical data that supports their veiled premise.
An overwhelming majority of American homeowners do not prefer affiliate settlement providers or even know what an affiliate settlement provider does at the closing table. Yet, bill supporters are touting affiliate relationships as the “choice” in the Consumer Mortgage Choice Act.
Lost in the misleading title of the bill is the fact that the title insurance industry continues to be an uneven playing field made up of affiliates who dominate local, state and regional markets and drive out competition and independent providers who face intense competition from their own underwriters and now their own referral sources for business. Worse yet, consumers are largely unaware that these same competitors are degrading the title insurance product without seeking to reduce its corresponding cost and not adequately disclosing the dangerous conflicts of interest that are the hallmark of these affiliate relationships.
H.R. 1077 is meant to help those affiliates maintain monopolistic control over their customers, provide unregulated revenue streams for their lender parents and increase the cost of title insurance services for American consumers. It was introduced by banks and silently supported by their friends from within the title insurance industry who profit from these questionable business relationships.
What Does ALTA Say About H.R. 1077?:
Like they did with H.R. 4323, the American Land Title Association (ALTA) released a statement yesterday that indicated it would take no formal position on H.R. 1077 because ALTA realizes that positions on the issue from within the organization are “mixed”. Instead, ALTA will “serve as a resource” for those members who wish to advocate either way on the bill.
What is NAILTA Doing?:
NAILTA has already launched an aggressive advocacy campaign to set the record straight on H.R. 1077 and to defeat this measure again. Earlier this month, NAILTA’s Policy and Legal Affairs Committee met with a majority of the members of the U.S. Senate Banking Committee and CFPB Director Richard Cordray in Washington DC to express our opposition to H.R. 4323 and H.R. 1077. The members and staffs were made clear where you stand and why this bill and others like it are so harmful to consumers and competition in the title insurance industry.
In addition, please click here to read our position paper on H.R. 1077. In the coming days, we will provide all NAILTA members with the fax number of every member of the House Financial Services Committee in Washington DC and provide you with a draft form letter that you can send to voice your opinion on this troubling development. If you want to participate directly in NAILTA’s policy plans, please send us an email at firstname.lastname@example.org. The best way to be a part of the action is to join NAILTA today.
NAILTA will also be visiting with each member of the House Financial Services Committee in Washington DC to express our opposition to H.R. 1077 and to ask that the bill be tabled — again.
NAILTA is not just a resource but also an advocate for your interests. Compare our actions with those of other organizations in the field and march with the feet of your membership dollars. To show your support for ours, please make sure to join NAILTA today. Our organization is made up entirely of volunteers like you who understand that our issues take no backseats.
Join NAILTA. Make a difference. Be heard.