Tag Archives: alta

Realtors and lenders confused about value of title insurance, says ALTA. Title industry group urges collaboration with real estate, lender partners before rule change

28 Apr

Realtors and lenders are just as ignorant as the general public about what title insurance is and the value it provides to the homebuying process, according to the American Land Title Association.

And with the sweeping changes that the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) rule will bring to the closing process later this year, more educational efforts and outreach are critically important, ALTA stressed at its 2015 Business Strategies conference last week.

Title insurance protects buyers from problems that could arise with a title they have purchased that were not uncovered in the title search process. Those problems could include errors with the deed or mistakes in the record — or even forgery or undisclosed heirs. When a homeowner purchases title insurance, then the title company will help pay any valid claims or defend the homeowners’ claim in a lawsuit.

The TRID rule, which takes effect Aug. 1, is widely considered to be the most significant change to the closing process in four decades. The 1,888-page rule and its accompanying 400-plus regulatory citation changes will impact how closings are conducted and the time frame in which they occur, as well as business processes, technology, policies and procedures — and, as highlighted at ALTA’s conference, the relationships among various vendors.

“Collaboration begins now,” said ALTA President Diane Evans as she kicked off the annual conference, attended by more than 500 title insurance and settlement professionals March 18-20 at the Sheraton Hotel in downtown Philadelphia. “We’ve been slow to engage, and now the time is critical that we start talking about the importance of the work we do. You will leave here with the tools to talk to Realtors and lenders to engage in critical conversations that need to occur sooner than later, and to collaborate with them as they prepare for Aug. 1.”

Evans, who is also vice president of Land Title Guaranty Co. in Denver, said during ALTA’s research for its consumer messaging campaign last year, Realtors and lenders who participated in focus groups showed “confusion” about the value of title insurance.

“Few recognized that we have two types of policies,” Evans said. “We learned they lacked a clear understanding of what we do, what we insure, how we price our products.”

We’ve been slow to engage, and now the time is critical that we start talking about the importance of the work we do.” Diane Evans, president of the American Land Title Association
The real estate professionals said title insurance professionals need to sell their own product — “It’s not up to them,” Evans said.

“It is up to us to take the reins and communicate directly to consumers earlier in the homebuying process to ensure they will have the peace of mind that their investment is protected after they get the keys to their home,” she said.

Part of the confusion stems from the CFPB’s decision to label an owner’s title policies as “optional,” she said.

“A consumer’s largest investment — their home, the very product that provides the most secure financial coverage for that home — and it’s optional,” she said. “Does that bother you? Are you concerned? I am. We now are tasked with making sure that consumers are educated early on in the process when they are buying their home. We have an obligation to make sure they understand the loan process, but we’ll have the opportunity to talk to them early on, and that part of the loan process includes protecting that investment. Why, for the one-time fee that we charge, it may be the single most important safeguard they purchase. We get to sell that to them and help them understand why it’s important.”

But because the CFPB will require lenders to assume responsibility for all of its closing table partners, it “will become critical to have leadership conversations” with Realtors, lenders and other vendors, Evans said. She urged title insurance and settlement professionals to educate their partners about the work they do to minimize claims and the risk homebuyers may have on their investment.

“We want to make sure they understand that the one-time premium gives them that peace of mind,” she said.

Evans urged attendees to take the lead and start “setting the expectations and having conversations with lenders” and other partners on how they will collaborate to exchange information on the new TRID disclosure forms.

“Every one of you in this room is going to become leaders in your community, in your market. You will help define and set the expectations in managing the next new paradigm shift in real estate closings,” she said.

Acknowledging the challenges that lay ahead in the next five months as everyone prepares for implementation, Evans said she expects everyone involved in the real estate, mortgage and settlement service industries to “morph, change and adapt to make practical applications and solutions for real-world problems.”

“I think we’ve got a lot of challenges ahead of us,” she conceded. “I think after Aug. 1, after we’ve experienced many of those pressure points, we will absolutely find a way to accommodate those changes.”

ALTA is co-hosting several TRID forums along with the Mortgage Bankers Association and National Association of Realtors to train members on the changes to come. Two forums remain, but are sold out: March 26 in Chicago and April 16 in Washington, D.C.

from INMAN.com March 24, 2015

Realtors and lenders confused about value of title insurance, says ALTA

30 Mar

from INMAN March 24, 2015
Realtors and lenders are just as ignorant as the general public about what title insurance is and the value it provides to the homebuying process, according to the American Land Title Association.
And with the sweeping changes that the Consumer Financial Protection Bureau’s TILA-RESPA Integrated Disclosures (TRID) rule will bring to the closing process later this year, more educational efforts and outreach are critically important, ALTA stressed at its 2015 Business Strategies conference last week.
Title insurance protects buyers from problems that could arise with a title they have purchased that were not uncovered in the title search process. Those problems could include errors with the deed or mistakes in the record — or even forgery or undisclosed heirs. When a homeowner purchases title insurance, then the title company will help pay any valid claims or defend the homeowners’ claim in a lawsuit.
The TRID rule, which takes effect Aug. 1, is widely considered to be the most significant change to the closing process in four decades. The 1,888-page rule and its accompanying 400-plus regulatory citation changes will impact how closings are conducted and the time frame in which they occur, as well as business processes, technology, policies and procedures — and, as highlighted at ALTA’s conference, the relationships among various vendors.
“Collaboration begins now,” said ALTA President Diane Evans as she kicked off the annual conference, attended by more than 500 title insurance and settlement professionals March 18-20 at the Sheraton Hotel in downtown Philadelphia. “We’ve been slow to engage, and now the time is critical that we start talking about the importance of the work we do. You will leave here with the tools to talk to Realtors and lenders to engage in critical conversations that need to occur sooner than later, and to collaborate with them as they prepare for Aug. 1.”
Evans, who is also vice president of Land Title Guaranty Co. in Denver, said during ALTA’s research for its consumer messaging campaign last year, Realtors and lenders who participated in focus groups showed “confusion” about the value of title insurance.
“Few recognized that we have two types of policies,” Evans said. “We learned they lacked a clear understanding of what we do, what we insure, how we price our products.”
We’ve been slow to engage, and now the time is critical that we start talking about the importance of the work we do.” Diane Evans, president of the American Land Title Association
The real estate professionals said title insurance professionals need to sell their own product — “It’s not up to them,” Evans said.
“It is up to us to take the reins and communicate directly to consumers earlier in the homebuying process to ensure they will have the peace of mind that their investment is protected after they get the keys to their home,” she said.
Part of the confusion stems from the CFPB’s decision to label an owner’s title policies as “optional,” she said.
“A consumer’s largest investment — their home, the very product that provides the most secure financial coverage for that home — and it’s optional,” she said. “Does that bother you? Are you concerned? I am. We now are tasked with making sure that consumers are educated early on in the process when they are buying their home. We have an obligation to make sure they understand the loan process, but we’ll have the opportunity to talk to them early on, and that part of the loan process includes protecting that investment. Why, for the one-time fee that we charge, it may be the single most important safeguard they purchase. We get to sell that to them and help them understand why it’s important.”
But because the CFPB will require lenders to assume responsibility for all of its closing table partners, it “will become critical to have leadership conversations” with Realtors, lenders and other vendors, Evans said. She urged title insurance and settlement professionals to educate their partners about the work they do to minimize claims and the risk homebuyers may have on their investment.
“We want to make sure they understand that the one-time premium gives them that peace of mind,” she said.
Evans urged attendees to take the lead and start “setting the expectations and having conversations with lenders” and other partners on how they will collaborate to exchange information on the new TRID disclosure forms.
“Every one of you in this room is going to become leaders in your community, in your market. You will help define and set the expectations in managing the next new paradigm shift in real estate closings,” she said.
Acknowledging the challenges that lay ahead in the next five months as everyone prepares for implementation, Evans said she expects everyone involved in the real estate, mortgage and settlement service industries to “morph, change and adapt to make practical applications and solutions for real-world problems.”
“I think we’ve got a lot of challenges ahead of us,” she conceded. “I think after Aug. 1, after we’ve experienced many of those pressure points, we will absolutely find a way to accommodate those changes.”
ALTA is co-hosting several TRID forums along with the Mortgage Bankers Association and National Association of Realtors to train members on the changes to come. Two forums remain, but are sold out: March 26 in Chicago and April 16 in Washington, D.C.

ALTA Concerned With New CFPB Disclosure

21 Jan

by MPA | Jan 19, 2015

As everyone in the mortgage industry knows by now, the implementation of the Consumer Financial Protection Bureau’s (CFPB) TILA-RESPA Integrated Disclosure rule is only a few months away. And while, the bureau states the new rule will simplify and enhance disclosure forms for mortgage transactions, not everyone agrees.

The American Land Title Association (ALTA) said it is concerned with the CFPB’s new Closing Disclosure, which goes into effect Aug. 1, 2015, and replaces the current HUD-1 Settlement Statement.

During a recent speech at the Brookings Institution, CFPB Director Richard Cordray said the new integrated mortgage disclosures will help consumers become better and more informed shoppers. (Click here to read Cordray’s prepared remarks.)

However, ALTA said it believes the Closing Disclosure misleads consumers about the actual price consumers will pay for title insurance. ALTA said it is urging the CFPB to take swift action to ensure consumers receive accurate information about their mortgage costs, including title insurance premiums and settlement services.

“Unfortunately, the current Know Before You Owe forms will create confusion at the closing table for many consumers,” Michelle Korsmo, ALTA’s chief executive officer, said. “In nearly half of the country, title companies are required by state law to charge title insurance premiums and discounts in a manner different than the bureau would have them disclose those fees to the consumer.”

Through regulation or rate filing, title companies in about half the states offer discounts on the loan policy when an owner’s policy is simultaneously purchased. Despite the common practice, the rule prohibits settlement agents or lenders from disclosing the discounted simultaneous issue price for the lender’s title insurance policy on theLoan Estimate and Closing Disclosure forms, according to ALTA.

ALTA said it believes that the rule’s requirement that the Closing Disclosure provide inaccurate charges for title insurance premiums is inconsistent with state law or regulation in 21 states: Alabama, Alaska, Arizona, California, Colorado, Florida, Idaho, Kansas, Michigan, Missouri, Montana, Nebraska, Nevada, New Mexico, New York, Ohio, Oregon, Texas, Utah, Washington, Wisconsin and Wyoming.

Additionally, the bureau’s method for disclosure of title fees will also cause confusion in the 31 states where the seller pays or is likely to pay for owner’s title insurance on behalf of the consumer.

This disclosure requirement will also cause consumers to think they need more cash to close, which will result in money being refunded, ALTA stated. Title and settlement agents will have to provide additional disclosure forms to consumers at closing to show the actual title insurance costs and to prove compliance with state law governing industry-filed rates.

“ALTA supports a cleaner real estate transaction but not at the expense of consumers understanding of their actual mortgage costs,” the association said in a statement.
“We agree with Director Cordray that an educated consumer is a more confident and empowered consumer,” Korsmo said. “Our economy can speed up its recovery if we provide more stability, growth and affordability in the mortgage market. We will continue to work with the CFPB and our industry partners toward commonsense solutions that decrease consumer uncertainty and bring demand back into housing market.”

The TILA-RESPA Integrated Disclosure rule includes two new forms for mortgage applications received on or after Aug. 1, 2015. The Loan Estimate must be provided to the consumer three business days after the application, and the Closing Disclosure must be provided to the consumer three days before closing.

Insurance News – American Land Title Association Introduces Set of ‘Title Insurance and Settlement Company Best Practices’ [Professional Services Close – Up]

19 Jan

Click on the link below:

 

Insurance News – American Land Title Association Introduces Set of ‘Title Insurance and Settlement Company Best Practices’ [Professional Services Close – Up].

What Is ALTA, and What Do They Do?

6 Dec

The American Land Title Association, founded in 1907, is a national trade association representing more than 4,000 title insurance companies, title agents, independent abstracters, title searchers, and attorneys. ALTA members conduct title searches, examinations, closings, and issue title insurance that protects real property owners and mortgage lenders against losses from defects in titles.

ALTA publishes an analysis every quarter, covering market share and volume of premiums generated.  Third quarter 2012 they reported a 22 percent ($581 million) increase in operating income from the third quarter of 2011, while loss expense was down 27 percent ($81 million) and operating expenses increased 23 percent ($532 million).

“Title insurance premium volume is highly dependent on real estate sales and mortgage-refinancing activity,” said Michelle Korsmo, ALTA’s chief executive officer. “The third quarter of 2012 continued to show improvement in our industry as it was the third consecutive quarter with an increase over the equivalent 2011 quarter.”

New York was one of the stated demonstrating a significant increase in volume($213.8 million, up 15.8 percent) as was Pennsylvania ($130 million, up 44.6       percent).