April 7, 2017

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Dear ,

The Legislative Session is well underway and it has been as intense as we expected it to be. In addition to our relatively large agenda designed to solve some key problems for our industry, we are finding ourselves defending our entire system of regulation. We’re making good progress on our affirmative legislation, including a bill that would allow for a "deposit plan" where a title agent makes a deposit with either TDI or a bank on a per policy basis until the required amount of money is safely set aside to fulfill the new minimum capitalization requirements. We’re also making progress on a bill that would streamline our rate setting process and provide for better due process with enforcement actions. I’m also pleased to report that both our lis pendens and HOA/POA bills were voted favorably out of House committees last week and will be reviewed by the Calendars Committee before they go to the House floor for a vote. The Senate version of the lis pendens legislation will be placed on the Senate Intent Calendar. You may read more about the progress of our affirmative agenda in the story below.

Additionally, four bills have been filed this session by Chairman John Smithee of the House Insurance Committee and each takes a different approach to some form of deregulation or price flexibility. We are educating the Chairman and committee members about why our current system works best for the consumer. Fortunately, the facts are on our side as we can demonstrate we have not had a rate increase in 20 years, while other states under other systems have had rates that continue to rise. In fact, rates in Texas have actually decreased almost 20% and that might be one of the reasons some regulators across the country are so intrigued by our system. There are many other arguments to preserve our current system and we are sharing all of them with our legislators. 

We wouldn’t be making the progress we have on any of our legislation without the generous help of our volunteers and the vital feedback they provide. Our volunteers have been an invaluable resource as we sift through thousands of bills and participate in complicated policy discussions that could have a long-term impact on our industry. I’d especially like to thank TLTA Past-President Bert Massey, The Brown County Abstract Company, Inc., for his recent testimony on the agent solvency legislation and TLTA Legislative Committee Chair Roland Love, Winstead PC, for his testimony on the lis pendens bill. I'd also like to thank Legislative Committee Vice Chair Tim Redding, First American Title Insurance Company; in addition to TLTA members Larry Molinare, Gracy Title;Guy Robert Jackson, Chambers County Abstract Company; and Kim Hesley, Kendall County Abstract Company for their recent testimony on bills on behalf of the title industry. Lastly, I'd like to thank our entire Legislative Committee, which has spent countless hours working on our legislative agenda.

In closing, you received a new communication from us last week called the Legislative Update. You'll receive these throughout the remainder of the legislative session as a means for us to keep you up to date on the status of TLTA's affirmative agenda, bills we support, bills we're working to defeat and other bills we're tracking that you should be aware of. We urge you to take the time to read these reports as we'll be asking for your feedback and occasionally seeking your help in contacting your legislators on key legislation. We encourage you to view up-to-date information on the TLTA website regarding the bills we are working on and watching.

Sincerely,

Aaron Day

TEXAS LEGISLATIVE NEWS 

TLTA Affirmative Legislative Agenda Moves Through Process

TLTA succeeded in filing bills addressing every item in our affirmative legislation agenda by the March 11 filing deadline. We are pleased to report three of our bills were voted out of committee last week. 

H.B. 1821 relating to the delivery of subdivision information by a property owners' association to purchasers and H.B. 964 relating to the effect of indexing lis pendens were voted favorably by the Business and Industry Committee. The bills are now in the Calendars Committee, which determines the placement of bills on the daily House floor calendar.

The indexing lis pendens Senate companion bill, S.B. 1187, was also voted out favorably last week by the Senate Jurisprudence Committee. On Friday, the bill was placed on the Senate Intent calendar for today, but based on how the process usually works, we do not anticipate the Senate will take up this bill until a later time.

Our S.B. 1496 relating to scope and validity of correction instruments in the conveyance of real property is scheduled for public hearing today in the Senate Intergovernmental Relations Committee. We want to thank Legislative Committee Chair Roland Love, Winstead PC, who has agreed to testify this afternoon on behalf of the industry.

We are also tracking more than 400 other bills that could affect our industry if passed. Stay current on the progress of these bills at our online bill tracker.

Legislators File Fewer Bills This Session

State lawmakers are focused on a budget shortfall of $27 billion so many have scaled back their legislative priorities because they know the state doesn’t have much money to spare. In 2009, more than 7,400 bills were on the books, as compared to just 5,873 filed this year.

Legislative Session Dates of Interest

Monday, May 9, 2011 (119th day) 
Last day for House committees to report House bills and House joint resolutions 

Saturday, May 21, 2011 (131st day) 
Last day for House committees to report Senate bills and Senate joint resolutions 

Monday, May 30, 2011
82nd Session Sine Dies (Memorial Day)

Sunday, June 19, 2011 (20th day following final adjournment) 
Last day governor can sign or veto bills passed during the Regular Session

Darby No Longer Seeks OPIC Shutdown

Austin American-Statesman
Rep. Drew Darby’s office said this month that the representative will not try, after all, to eliminate the state’s consumer insurance advocate. Darby previously had discussed closing down the Office of Public Insurance Counsel. But he since has changed his mind and has decided not to gut the office. 

Darby still has concerns about redundancy, his office said, but after meeting with Deeia Beck, the head of the advocacy office, the two have agreed that the office still plays an important role. Darby and Beck also set some goals for the Office of Public Insurance Counsel, including trying to reach out more to consumers. Read the full article.

FEDERAL NEWS 

GSE Update: Reforming Fannie and Freddie

James E. Hyland | The Pennsylvania Group
TLTA Federal Legislative Counsel

The U.S. Congress is beginning to turn its attention to reform of the housing finance system, targeted at the two Government Sponsored Enterprises (GSEs). The House Financial Services Committee last week unveiled eight separate bills that would change the structure and nature of Fannie Mae and Freddie Mac. You may read more about these bills at the bottom of this story. Overall, the intended purpose of these bills is to shrink the size and scope of the two GSEs and bring more private funding into the housing market. 

The bills would: shrink the GSEs portfolio from over $1.4 trillion to $500 million; limit compensation to other government scales (Fannie Mae had paid its top six executives over $15 million); eliminate the affordable housing goals of the GSEs; limit new business ventures of the GSEs; appoint an Inspector General to review their activities; insure that rules that apply to the private market, like market priced guarantee fees and risk retention also apply to Fannie Mae and Freddie Mac.  

Capital Markets and GSE Subcommittee Chairman Scott Garrett (R-NJ) said, “The bailout of Fannie Mae and Freddie Mac stands at $150 billion and counting, and 95% of the U.S. mortgage market is now being financed by the federalgovernment. The status quo is not only unacceptable, it’s unsustainable.” The Committee intends to hold a hearing this week, and begin considering the bills next week. 

This week, as a direct result of a successful joint legislative effort by the TLTA and American Land Title Association lobby teams, the Capital Markets and GSE Subcommittee made an amendment to H.R. 1223 that would require title insurance coverage on all mortgages packaged into mortgage backed securities that wish to be deemed “qualified residential mortgages”.  Read more about the amendment here.

While these bills may move quickly in the House, their fate is less clear in the Senate. Senator Tim Johnson (D-SD), Chairman of the Banking, Housing and Urban Affairs Committee, is holding hearings on the issue.  

When TLTA visited our Texas Members in Washington, D.C. earlier this month, we heard that action on GSE reform will take a while. However, we did inform our Texas Members that title insurance should be a necessary component of collateral underwriting, and that Congress needed to insure that the private market would follow the GSE requirement that all mortgage loans have the proper title insurance. ALTA and TLTA are working on legislation on this issue and we will keep you posted on any developments. 

More information about the eight GSE bills filed by Republicans:

1. The Equity in Government Compensation Act would require that employees of Fannie and Freddie be paid at levels consistent with senior executives in the federal government.

2. The Fannie Mae and Freddie Mac Accountability and Transparency for Taxpayers Act would require the GSE Inspector General to regularly report to Congress on a range of Fannie and Freddie issues.

3. The GSE Mission Improvement Act would end all affordable housing goals set for Fannie and Freddie.

4. The GSE Subsidy Elimination Act would increase the guarantee fees charged to lenders by the GSEs for the purpose of "bringing pricing parity between the private market and GSEs."

5. The GSE Portfolio Risk Reduction Act would cap the current portfolios of Fannie and Freddie and wind them down more quickly.

6. The GSE Risk and Activities Limitation Act would prohibit Fannie and Freddie from engaging in any new activities or businesses.

7. The GSE Debt Issuance Approval Act would require formal approval by the Treasury for any new debt issuances by the GSEs.

8. The GSE Credit Risk Equitable Treatment Act of 2011 would prohibit the exemption of GSE securities from the risk-retention requirements of Dodd-Frank.

TLTA Meets With U.S. Legislators at ALTA Conference

TLTA President Brian Pitman; Executive Vice President & CEO Leslie Midgley; Federal Issues Chair Celia Flowers, East Texas Title Companies; and Government Affairs Director for Stewart Title Randy Lee, recently participated in the American Land Title Association (ALTA) Federal Conference in Washington, D.C. in early March. 

The first two days of the conference included the Government Affairs Committee meeting where attendees were briefed by ALTA on the many federal issues in which they are involved in representing the industry. We also participated in an advocacy meeting of state land title association leaders from across the country where common issues were discussed, and then we watched presentations by U.S. Representatives Ed Royce and Ed Perlmutter as well as Senator Ben Nelson, in addition to panel discussions on mortgage fraud, RESPA reform and the new Consumer Financial Protection Bureau.

Over the final day and a half, the TLTA group participated in scheduled appointments on Capitol Hill with members of our Texas Congressional Delegation and their staff, including Senators Kay Bailey Hutchison and John Cornyn and Representatives Kenny Marchant, Randy Neugebauer, Quico Conseco, Kevin Brady, Jeb Hensarling, Pete Olson, Ruben Hinojosa, John Carter, Mac Thornberry and Lamar Smith. These meetings provided an opportunity to discuss issues of concern to our industry, namely the proposed elimination or dramatically changed role of GSEs, including Fannie Mae and Freddie Mac. The message the TLTA group carried to our elected officials in Washington, D.C. was that whatever changes are made to the current system, it is critical that appropriate standards for mortgages be maintained, including the requirement for a title search and exam and issuance of a title insurance policy, both of which provide important protection for all parties to the transaction. 

TLTA’s federal advocacy team is working hand in hand with ALTA to ensure this and other appropriate standards are preserved in the wake of eight bills that were recently filed in the U.S. House dealing with GSE reform, which you can read more about in the story above. We will keep you updated of any new developments.

TLTA Member Joins ALTA RESPA Task Force

Group Suggests Combining GFE and TIL Forms
TLTA Federal Issues Committee Chair and Past-President Celia Flowers, East Texas Title Companies, recently joined ALTA’s RESPA Implementation Task Force, which met this month with staff from the new Consumer Finance and Protection Bureau (CFPB) to discuss a draft of the combined mortgage disclosure forms they requested the Task Force create. 

As a result of the inclusion of both RESPA Good Faith Estimate (GFE) and Settlement Statement (HUD-1) into the combined form concept required by Dodd-Frank, ALTA’s Task Force suggested one form be used early in the process that generally combines the GFE with initial TIL disclosures and a second form to be used later in the process that combines disclosure made under the current HUD-1 and a final TIL disclosure. The early and late disclosure forms both provide itemization of APR computation items. If you have questions or suggestions for the Task Force, you can send them an email here at [email protected]. 

ALTA’s RESPA Implementation Task Force is composed of 11 members, including TLTA members Jim Gosdin, Stewart Title Guaranty Company; Mary Schuster, RamQuest Software, Inc.; and Celia Flowers. The group will continue working with the CFPB as the new department develops and we will keep you posted of any updates.

Housing Experts: QRMs Shouldn't be too Restrictive

iMarket News
Housing finance experts said last week that agencies and regulators who are responsible for defining the requirements of a Qualified Residential Mortgage (QRM) under Dodd-Frank should be careful to make sure it includes enough of the market.

A QRM as prescribed by Dodd-Frank would allow certain qualifying mortgages to be exempt from firms needing to retain 5% of the credit risk of the mortgages they securitize. Read the full story.

ALTA's Position
ALTA argued in a recent statement that the federal government’s attempt to promote high quality mortgage loans through QRMs will erode collateral underwriting standards and drastically affect access to affordable loans for creditworthy Americans.

In January, ALTA joined 11 other industry associations to issue a joint letter to federal economic officials explaining their concern over the QRM’s. ALTA also submitted a letter in January explaining that a title search backed by a title insurance policy is an underwriting feature that results in a lower risk of default and should be included in the definition of a QRM. ALTA has continued to hold meetings on the rule with staff from the FDIC, FHFA, Federal Reserve Board and HUD. 

ALTA’s Letter | ALTA’s Joint Letter

HUD Issues Guidance for Loan Originator Compensation Rule

The U.S. Department of Housing and Urban Development (HUD) issued guidance to clarify RESPA requirements related to proper disclosure of loan originator compensation on the GFE and HUD-1.

In its latest RESPA Roundup, HUD said the guidance was issued to help with RESPA compliance in anticipation of the Federal Reserve Board’s (FRB) Loan Originator Compensation rule that goes into effect April 1, 2011. HUD indicated the guidance does not address substantive issues related to restrictions on mortgage loan originator compensation that are within the jurisdiction of the FRB.

Under the FRB’s loan originator compensation rule, loan originators may not receive compensation in an amount that is based on any of the transaction’s terms or conditions. Read more

JUDICIARY 

TLTA Responds to AG’s Amicus Request

In January, TLTA received an Amicus request from the Texas Attorney General’s office regarding Texas Dep’t of Transportation and City of Edinburg v. A.P.I Pipe & Supply, L.L.C. One of the key issues in this case is whether Property Code §13.001(a)—the statutory provision that protects property purchasers from unrecorded title conveyances they don’t know about—also prevents purchasers from being bound by certain recorded title conveyances as well.

In 2003, the City of Edinburg petitioned to condemn 9.869 acres in Hidalgo County from Herschell White to construct drainage ditches along U.S. Highway 281. The special commissioners awarded $224,249 in compensation, which the City paid and White accepted. Accordingly, in June 2003, the Hidalgo County Court of Law Number Four awarded fee title to the City. That judgment, including the City’s condemnation petition, was filed in the official property records of Hidalgo County in April 2004. 

In May 2004, the same court entered a “Judgment Nunc Pro Tunc” regarding the same ten-acre parcel. This judgment purports to award the City a drainage easement, instead of the fee simple title the City actually petitioned and paid to acquire. In September 2004, A.P.I. Pipe & Supply L.L.C. purchased 34 acres from White. The deed recited that the property was subject to easement in favor of the City as described in the 2004 “nunc pro tunc” judgment. The deed also specifically expected 9.827 acres lying “in a Drainage Easement granted to the City of Edinburg” under the 2004 judgment. In 2005 the City granted TxDOT an easement over the ten-acre parcel which expressly allows TxDOT to remove any excavated “stone, earth, gravel, or caliche.” 

In 2006 A.P.I. Pipe & Supply sued TxDOT and the City alleging they – not the City – owned the ten-acre tract and TxDOT’s removal of soil constituted a taking for which A.P.I. was entitled to compensation. 

Following the request, the TLTA Judiciary Committee reviewed the case and recommended the Board direct members and staff to draft an Amicus letter. In February, the Board approved the motion and last week TLTA submitted its Amicus letter to the Texas Supreme Court. As outlined in our letter, TLTA feels it is vitally important to the public interest that the integrity of the criteria which determines who may enjoy the status of a bona fide purchaser be preserved and that the temptation to invite ambiguity into the determination of this status be rejected. We’ll continue to update you as the case proceeds.

Abbott Joins in Objections to Mortgage Services Settlement

Austin American-Statesman
Five months after he joined the Attorneys Generals of the 49 other states in investigating foreclosure and mortgage servicing practices, Texas Attorney General Greg Abbott is objecting to a settlement plan the group has put forth to resolve the investigation.

Abbott joined Attorneys General Kenneth Cuccinelli of Virginia, Pam Bondi of Florida and Alan Wilson of South Carolina in raising concerns about documentation requirements and loan-principal reductions in the plan, which was sent to the nation's largest mortgage servicing companies on March 3.

The objections were detailed in a letter to Iowa Attorney General Tom Miller, who is leading the inquiry. The Attorneys General of Alabama, Nebraska and Oklahoma sent Miller a letter with similar objections. Read the full article

TX Supreme Court to Rehear Open Beaches Case

Austin American-Statesman
The Texas Supreme Court said last month that it will reconsider a 6-2 November 2010 ruling that blunted state enforcement of the Open Beaches Act, a 51-year-old law meant to preserve public access to the shoreline.

Property rights advocates had praised the decision, which barred state officials from ordering landowners to raze or move homes that encroach on Gulf of Mexico beaches after a major storm reshaped the shoreline. Read the full article.

TLTAPAC 

Why I Give

Lloyd Draper
WFG National Title
Insurance Company

I have spent my entire career in this industry supporting the TLTA and its efforts, the most important of which is the TLTAPAC.
TLTAPAC allows us to have a voice in Austin and Washington D.C. when it comes to legislation which affects our industry.
I would encourage each of you to consider donating whatever you can, because every dollar raised goes directly to helping our leadership keep this industry strong and respected!

Donate | Career Commitment | View Donors

Independence Title’s ‘Casual Day’ Raises $1,200 for the TLTAPAC

Independence Title recently held a special President's Day fundraiser for the TLTAPAC. The idea was simple – donate at least $10 to the TLTAPAC, and enjoy wearing jeans and tennis shoes to work on President’s Day. The effort caught on fast with employees and raised more than $1,200 for the TLTAPAC. Current TLTA President Brian Pitman, President of Independence Title, said he would like to challenge other TLTA companies to raise money for the PAC through a ‘casual day’ fundraiser.

TLTAPAC’s Biennial Race to the Finish!

On your mark. Get set. Go! Get ready for your chance to show just how much you’d pay NOT to walk a mile in our lobby team’s shoes! 

For one week, from May 23-27, TLTA Director of Government Affairs and Counsel Aaron Day and Legislative Counsel Allen Place, Jr. will wear pedometers while lobbying on behalf of the title industry. 

TLTA introduced the Race to the Finish PAC Fundraiser during the 2009 Legislative Session and in just one week, the team logged an outstanding 30 miles and helped raise over $3,600 for the TLTAPAC! 

Join the race now by downloading your pledge form!

Dust Off Your Clubs - It's Time for The Bert Massey Classic PAC Golf Tournament!

Register now for TLTA’s Annual Conference & Business Meeting June 16-18 in San Antonio and join us on Thursday, June 16 for the Bert Massey Classic PAC Golf Tournament. Avid golfers and amateurs alike are invited for a morning of golf followed by an awards ceremony and lunch on the lawn. Registration fee includes green fee, golf cart, refreshments on the course and the awards luncheon.

You do not want to miss your chance to play on this beautiful new course! The TPC San Antonio is the newest addition to the PGA Tour’s TPC Network of premier clubs. Read more about the course here.

Can’t join us for the Conference?
There are plenty of other ways to back the PAC – there are a few tournament holes left that are available for sponsorship, or consider making a corporate contribution. Our corporate accounts directly support our fundraising activities and our account needs replenishment. Our fundraising activities, such as the golf tournament and TLTAbay, enable us to raise individual contributions that can then be used to reach out and educate our friends in the legislature. View the sponsorship opportunities here.

View Conference Schedule | Register Online | Download Registration Form

NEWS TO KNOW 

Industry Stats

Indicator Release Date Latest Release Change from Previous Release
30 Year Fixed Mortgage Rates 3/21/11 4.76% -0.12
15 Year Fixed Mortgage Rates 3/21/11 3.97% -0.18
10 Year Treasury Rate 3/21/11 3.34% +0.06
Existing Home Sales (in millions) 2/23/11 5.36 +12.3%
New Home Sales 2/24/10 284,000 -12.6%
Supply of Housing Inventory 2/24/10 7.9 months +1.0 monthsInfo from ALTA