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Call to Action! - NAILTA Opposes HR 4323 the Consumer Mortgage Choice Act

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There are serious efforts underway in Washington DC to give controlled business arrangements a "leg up" on your business.

The House Financial Services Committee (HFSC) in Washington DC is considering a bill known as HR 4323, the Consumer Mortgage Choice Act (click here) which would exempt affiliated businesses from the definition of "points and fees" under Dodd-Frank's qualified mortgage definition. In this way, the bill aims to incentivize the use of affiliated businesses to the detriment of independent title agents.

RESPRO, NAR, NAMB and the rest of the referral source lobby want to pass this bill in order to feed their mega one stop shops. As you know, RESPRO and the rest of the referral source lobby is run by the biggest CBAs in the country (i.e. Howard Hanna, Prudential Fox Roach, Weichert, Long and Foster, etc.). They are using 2008 studies paid for by the NAR to support a false narrative – that homeowners benefit more from using CBAs. They also claim that including CBAs in the points and fees definition of QM is anti-competitive. Imagine that? CBAs are complaining that being subject to federal law and being forced to compete on price is actually anti-competitive. We have enclosed here the OAITA Settlement Preference Survey from 2009-2010 that showed the NAR studies were wrong. You may want to share these with members of Congress to show them that the RESPRO narrative is a false narrative.

What can you do? We need all of you to pick up the phone. Make some calls. Write some emails and get involved. Contact every member of the HFSC and their staff and tell them that you are a member of NAILTA and that you do not support HR 4323.  Click here for email list.

Tell them what it is like to compete with businesses that lock out competition and who steer business away from small business owners. Explain to them that CBAs were included in the definition of "points and fees" under Dodd-Frank because Congress recognized that CBAs have inexorable conflicts of interest in the conduct of their business. Tell them that CBAs do not compete on price in the marketplace. Explain to them that this definition will force CBAs to lower their prices (which we know would be the end of their lifecycle). HR 4323 is bad for consumers, bad for small business and bad for you.

It's up to you.

ALTA and the title insurance industry have agreed to sit this one out. Members of NAILTA contacted Justin Ailes, Chief Lobbyist for ALTA, in December, 2011 when the bill was first mentioned as a possibility and he told us that since ALTA represents so many varied interests, both for and against CBAs, they would not weigh in on this debate. You are the only thing standing between CBAs winning another competitive advantage over your business and the prospects of success. ALTA and the national UWs will not help you.

Again, it's up to you. I urge you to take 30 minutes today and do something to protect your jobs, your family's livelihood and your business. Use the list and make your voice heard.
 
NAILTA Comments on CFPB Qualified Mortgage Definition

The Consumer Financial Protection Bureau is readying its definition of qualified mortgages under the Dodd-Frank Act. NAILTA authored the enclosed letter to Director Richard Cordray to remind him that the title insurance industry, and particularly small businesses and independent title insurance agents, are concerned that a narrow definition of qualified mortgages might restrict or otherwise stunt the growth of small businesses in our industry.

In addition, NAILTA asked Director Cordray to consider the fact that qualified mortgages only attain "quality" by the removal of harmful conflicts of interest such as dubious controlled business arrangements and other joint ventures promoted by groups like RESPRO and their referral source brethren. Studies clearly show that consumers do not know, benefit or understand enough about controlled business arrangements and that simply defining qualified mortgages under Dodd-Frank, without addressing harmful conflicts of interest, will not curtail the problems associated with higher rates of default, increased claims and more real estate-related litigation.

A copy of NAILTA's correspondence is found by clicking here.
 
Indiana Rating Bureau?
Indiana State Senator Karen Tallian (D-Portage) sponsored SB 410 on January 9, 2012 which is a bill to create a filed rating system for title insurance in Indiana.  The text of the bill is enclosed here for your review.  If approved and signed by Governor Daniels, it would become effective on July 1, 2012 and establish a rating bureau similar to Ohio and Pennsylvania.  That bureau would then be responsible for setting title insurance rates and form usage in Indiana.  Title insurers would not be able to charge rates that are excessive, inadequate or unfairly discriminatory.  When making rate filings, past and prospective loss experience in Indiana would have to be considered, as well as, a reasonable margin for underwriting profit and contingencies.
Read more...
 
Indiana Court Clarifies BFPs and Judgment Perfection

"A week ago, the Indiana Court of Appeals issued a decision in the case styled Hair v. Schellenberger, Case No. 49A02-1107-PL-685 (click here) that will have definitive impacts on the perfection of judgment liens in Indiana and clarifies when a party becomes a bona fide purchaser for value.

In Hair, when the new purchaser purchased a property at a foreclosure sale, the title search did not show a money judgment that Calvin Hair had obtained against former owners. The judgment had never been indexed in the county records, and the new purchaser (Schellenberger) was unaware of it until a year later, when Hair sent him a letter claiming that he had a judgment lien on the property. The new purchaser filed a quiet title action to remove the Hair judgment lien. The trial court granted the new purchaser's motion for summary judgment determining that the new purchaser was a bona fide purchaser. That decision was appealed to the Indiana Court of Appeals in the above-captioned case.
Read more...
 
CFPB releases third draft of a new Settlement Statement

Consumer Financial Protection Bureau (CFPB) has released the third draft of a new Settlement Statement form that combines TIL disclosures and the HUD-1 to explain final loan terms and closing costs to consumers.

There are two drafts of the new, combined form, Butternut and Hemlock. CFPB is again asking for your input on how these final-stage closing forms work with the draft application form which will replace the GFE. The forms are intended to help consumers better understand the differences between their estimated and final loan terms and settlement costs.

They need to hear from consumers, lenders, and settlement agents. In other words: they need to hear from the people who have to use these disclosures.

The Dodd-Frank Act requires them to integrate the two disclosures you currently receive when you close on a mortgage loan: the HUD-1 Settlement Statement and final Truth-In-Lending disclosure. Their goal is to make this one combined form that is easier for both consumers and industry to understand and use. Keep in mind that this is the final disclosure consumers receive either shortly before or at closing. It provides borrowers with the important information like the loan terms, closing costs, and requirements for the loan.

 
 
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