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The Legal Description Edition
June 9, 2014
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Addressing jurisdictional differences in implementing disclosure rule’s new rate calculations
Posted Date: Friday, June 6, 2014
Despite the significant changes that will befall the entire mortgage lending industry in Aug. 1, 2015, the title insurance industry received many wins when the Consumer Financial Protection Bureau (CFPB) released its final disclosure rule last year. One of the biggest is the fact that these regulations will not have to be implemented for more than a year.
There are some issues that still need to be worked out, however. One that agents and underwriters should be aware of, and one that industry groups are working with the CFPB to amend, is the calculation of the simultaneous issue rate.
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GSE reform passes Senate committee
Posted Date: Thursday, May 22, 2014
The Senate Banking Committee approved S. 1217, the Housing Finance Reform and Taxpayer Protection Act of 2013, by a bipartisan vote of 13-9. The legislation included a bipartisan agreement drafted by Chairman Johnson and Ranking Member Crapo and is designed to stabilize the housing finance market and strengthen the American economy. It will create greater competition in the housing finance system and reduce risk to the taxpayer while ensuring affordable, fair access to all creditworthy borrowers.
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ALTA president shares CFPB’s impact on small business
Posted Date: Wednesday, May 28, 2014
American Land Title Association (ALTA) President Rob Chapman spoke at a House Financial Services Committee Subcommittee on Financial Institutions and Consumer Credit hearing about the impact the Consumer Financial Protection Bureau (CFPB) has had on small businesses. He also discussed how to improve transparency and accountability at the CFPB.
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Bank sues under CPL after discovering fraud
Posted Date: Monday, April 21, 2014
After discovering it lost $7 million on loans secured under a fraudulent property flipping scheme, a bank went after several parties, including the title agents who closed the transactions and the title insurer. The bank sued, asserting claims against the agents for breach of closing instructions and claims against the title insurer for breach of the closing protection letter. The bank eventually appealed the case to the Court of Appeals of Michigan on a trial court’s dismissal of one of the agents and the title insurer.
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Insured, insurer and third-parties seek summary judgment in breach of contract suit
Posted Date: Monday, April 21, 2014
RP Family Inc., brought action against its title insurer, claiming breach of contract and other state law claims arising out of the insurer’s alleged failure to satisfy its obligations under RP Family’s title insurance company. The insurer brought a third-party complaint against the title agent and others, seeking indemnification. Each party now seeks summary judgment in the U.S. District Court for the Eastern District of New York.
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CFPB to make consumer meetings more transparent
Posted Date: Thursday, May 22, 2014
The Consumer Financial Protection Bureau (CFPB) announced that it will open its Consumer Advisory Board and Councils meetings to the public in an effort to provide more transparency to stakeholders and others.
Since establishing its Consumer Advisory Board and Councils in 2012, these groups have provided the CFPB with information about emerging trends and practices, allowed it to hear directly from small financial institutions, and the Academic Research Council has provided technical and scientific advice to its Office of Research. From their establishment, the CFPB has been committed to providing transparency into these interactions by providing membership information, meeting summaries, and notices of meetings, among other things.
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Florida bill amends several aspects of title insurance law
Posted Date: Wednesday, May 28, 2014
The Florida Legislature has enrolled a bill that would amend several aspects of title insurance law in the state, including revising criteria with respect to liabilities charged against assets in determinations of financial condition, specifying the reserves title insurers must set aside and specifying that only a licensed and appointed agent or agency is authorized to sell title insurance. The bill awaits the governor’s signature.
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Governor signs refinance lien priority calculation bill in Maryland
Posted Date: Monday, May 19, 2014
Maryland Gov. Martin O’Malley signed a bill to include certain escrow costs in the calculation to determine whether a refinance mortgage shall have, on recordation, the same line priority as the first mortgage or deed of trust that the refinance mortgage replaces.
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CFPB fines real estate firm for steering consumers to title affiliate
Posted Date: Wednesday, May 28, 2014
The Consumer Financial Protection Bureau (CFPB) ordered RealtySouth, the largest real estate firm in Alabama, to pay $500,000 for inadequate disclosures that could leave consumers unaware of their rights to choose service providers during the home-buying process. The practices identified by the CFPB’s investigation illegally benefited TitleSouth LLC, an affiliated company owned by the same holding company that owns RealtySouth.
“Disclosures give consumers the power to make informed financial decisions, and buying a house is among the biggest financial decisions most people ever make,” said CFPB Director Richard Cordray. “The bureau will continue to take action against companies that attempt to modify disclosures and keep consumers in the dark.”
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FTC approves final order in CoreLogic acquisition of DataQuick
Posted Date: Thursday, May 22, 2014
Following a public comment period, the Federal Trade Commission (FTC) has approved a final order settling charges that CoreLogic, Inc.’s $661 million acquisition of DataQuick Information Systems, Inc. from TPG VI Ontario 1 AIV L.P. was likely to harm competition in the market for national assessor and recorder bulk data.
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Title agency ordered to refund recordation tax overpayments
Posted Date: Monday, May 19, 2014
Thousands of affected consumers are receiving refund checks in their mailboxes from LSI Title Agency Inc., a Pennsylvania title company. In December 2013, the Maryland Insurance Administration ordered LSI to pay consumers who were overcharged during real estate settlements. Those checks now are in the mail.
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Obama announces nominations of HUD, OMB heads
Posted Date: Tuesday, May 27, 2014
President Barack Obama on May 23 announced his nominations to lead the Department of Housing and Urban Development (HUD) and the Office of Management and Budget (OMB).
President Obama nominated Julian Castro, the current mayor of San Antonio, to be the next secretary of HUD. He would replace Shaun Donovan, who was nominated to be the next OMB director.
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WFG Compliance Management System goes live
Posted Date: Thursday, May 22, 2014
WFG National Title Insurance Co. (WFG National Title) agents are now using the company’s Compliance Management System (CMS), an electronic platform allowing those agents to educate themselves about key compliance requirements as well as assisting them in the design of new compliance policies and procedures. WFG National Title is the fastest growing national title insurance underwriting company and a full service provider of title insurance and real estate settlement services for commercial and residential transactions nationwide.
According to WFG National Title’s Executive Vice President, Joseph Drum, the company has made the rollout of the system a priority over the past several months. The project has been spearheaded by WFG’s Chief Compliance Officer Donald O’Neill, Rick Diamond, senior vice president of IT and agency operations and Kelley Shellhaas, assistant Midwest underwriting counsel for WFG.
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FDIC encourages consumer shopping in latest newsletter
Posted Date: Friday, June 6, 2014
Consumer shopping continues to be a buzzword surrounding the title insurance industry. The Consumer Financial Protection Bureau is doing its best to encourage it, the National Association of Insurance Commissioners (NAIC) is working to find ways to help consumers do it. Now the Federal Deposit Insurance Corp. (FDIC) is encouraging it too.
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FDIC encourages consumer shopping in latest newsletter
Posted Date: Wednesday, May 28, 2014
In its latest edition of Consumer News, the Federal Deposit Insurance Corp. (FDIC) discussed ways consumers can save money on a mortgage. The advice ranged from comparison shopping for your mortgage to whether or not it is a good decision to refinance an existing mortgage. In addition, it encouraged prospective homeowners to understand which third-party settlement services they can shop for.
In the article, ’Saving money on a mortgage, from start to finish,’ the FDIC said that while lenders require borrowers to purchase certain services, such as appraisals, form specific companies, borrowers are allowed to shop for other third-party settlement services.
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Calif. woman sentenced for role in multi-state mortgage fraud scheme
Posted Date: Wednesday, May 28, 2014
U.S. Attorney Pamela Marsh announced the sentencing of Andrea Lorraine Avery, 47, of Los Angeles, Calif., following acceptance of her guilty plea in December of last year. Avery pleaded guilty to seven counts that included: conspiracy to commit fraud, five counts of mail fraud affecting a financial institution, and conspiracy to commit money laundering. Avery was sentenced to 84 months in prison and ordered to pay restitution in the amount of $10.3 million to the FDIC as receiver for Washington Mutual, GMAC Mortgage, SunTrust Mortgage, Wells Fargo Bank, USBank and others.
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Remembering the consumer in mortgage disclosure preparations
Posted Date: Tuesday, May 27, 2014
In preparing for the new mortgage disclosures, it’s important to remember that these changes are being done to empower the consumer to make the best financial decisions. At recent industry events, industry experts not only walked through the new forms, but shared insight into how to focus on the consumer.
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Condo developer, attorneys, others indicted for $22M mortgage fraud scheme
Posted Date: Tuesday, May 27, 2014
A south loop condominium developer and two attorneys are among six defendants facing federal charges for allegedly engaging in a $22.8 million mortgage loan fraud scheme, federal law enforcement officials announced. The defendants allegedly caused buyers to fraudulently obtain approximately 60 mortgages from various lenders to purchase condominiums at Vision on State, a 250-unit building.
Real estate developer Warren Barr III was a member of 13th & State, LLC, which obtained a $55.7 million loan in 2005 to finance the development and construction of Vision on State between 2004 and 2008. Barr, 62, of Riverside, Ill., was charged with nine counts of bank fraud and four counts of making false statements on loan applications in a 13-count indictment that was returned by a federal grand jury.
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Agent appeals revocation of insurance producer license
Posted Date: Tuesday, May 27, 2014
After having their insurance producer license and agency license revoked by the Minnesota Department of Commerce, a title insurance agency and its owner appealed to the Court of Appeals of Minnesota. Read on to find out what the court had to say.
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Four indicted for wire fraud in Miami
Posted Date: Thursday, May 22, 2014
Wifredo Ferrer, U.S. attorney for the Southern District of Florida, George Piro, special agent in charge, Federal Bureau of Investigation (FBI), Miami Field Office, and Drew Breakspear, Commissioner, Florida Office of Financial Regulation, announce that Karl Oreste, 56, of Miramar, Marie Lucie Tondreau, a/k/a Lucie Tondreau, 54, of North Miami, Okechukwu Josiah Odunna, a/k/a O.J. Odunna, 49, of Lauderdale Lakes, and Kelly Augustin, 57, of North Miami, have been charged with conspiracy to commit wire fraud and six counts of wire fraud.
According to the allegations in the indictment, between December 2005 and May 2008, Oreste, president of KMC Mortgage Corp. of Florida, a mortgage lending business in North Miami Beach, identified residential properties in South Florida that were for sale. Oreste and Tondreau hosted several radio show programs in the South Florida area in which they advertised the services offered by KMC Mortgage. Oreste and Tondreau recruited and paid some of the listeners who responded to those advertisements, as well as other individuals, to pose as borrowers to purchase properties identified by Oreste. Augustin, an employee of KMC Mortgage, also recruited straw borrowers.
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Miller to reveal the three most powerful growth strategies
Posted Date: Monday, May 19, 2014
Dan Miller, chief executive officer at RightNow Consulting, will be giving title agents insights on how to meet the needs of their best customers at the 2014 National Settlement Services Summit (NS3) in New Orleans, June 9-11.
“I have had the good fortune of gaining experience running and advising large scale real estate agencies and mortgage banks over the last seven years,” Miller said. “I am looking forward to sharing these experiences and insights with title agents who want to use the current business and regulatory climate to dramatically expand their profits. Some of the biggest challenges the industry faces present the largest opportunities.”
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Evaluating procedures before the new disclosures hit
Posted Date: Monday, May 19, 2014
Aug. 1, 2015, may seem a long way off, but there are numerous things title industry members can — and should — begin doing to prepare for the changes. At recent industry events, industry experts not only walked through the new forms, but discussed some of those steps agents can take now to be ready for them.
One of those issues to tackle is the three-day rule. The final rule states that consumers must receive a copy of their final Closing Disclosure three business days prior to closing. SoftPro Director of Industry Relations Leslie Wyatt emphasized that that means the consumer needs to physically have the Closing Disclosure form three days prior to closing.
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Real estate agents sentenced for role in $11M fraud
Posted Date: Monday, May 19, 2014
Tammy Dickinson, U.S. attorney for the Western District of Missouri, announced that two Blue Springs, Mo., real estate agents and several co-defendants have been sentenced in federal court for their roles in an $11 million mortgage fraud scheme.
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