August 31, 2011
Dear ,
August marked the beginning of the TLTA Regional Town Hall Meetings. In addition to giving us the chance to compare the versions of triple digit temperatures across the state, these meetings are providing us with a wonderful opportunity to learn about the issues facing our industry. They are also a chance for our members to get a detailed briefing on our legislative results, current issues and future planning. I strongly encourage you to join us for the Town Hall Meeting in your area.
This month, we also welcome to the job a new TDI Commissioner, Eleanor Kitzman, who began work on August 15. Commissioner Kitzman is a Texas native returning home after an impressive career in South Carolina's insurance industry, in addition to serving as the director of the South Carolina Department of Insurance, which is that state's equivalent to our Insurance Commissioner. Kitzman is a graduate of the University of Houston and the South Texas College of Law. We look forward to meeting the new Commissioner soon and introducing her to the Texas land title industry.
Additionally, the TLTA Regulatory Committee has begun work this month to prepare for a fall rule hearing. This hearing will be requested by TLTA and will consist of agenda items to implement recent legislation along with some other Basic Manual clean-up items.
If you recall, Commissioner Mike Geeslin held a hearing in January to address title solvency legislation and issued a call for issues for a 2010 biennial hearing. Both of these hearings have been rendered moot by operation of law. The items discussed at the solvency hearing as well as the items proposed by TLTA for the 2010 biennial hearing will have to be revisited in the rule hearing as well.
As a result of our successful legislative session, the industry has several new laws that will go into effect on September 1. Be sure to review these changes and attend TLTA's upcoming webinar on September 7, which will tell you what you need to know about the recent statutory changes. Also, Basic Manual Updatesubscribers will soon be receiving their updates which reflect these changes.
On a final note, this month witnessed the kickoff of the political fundraising season. TLTA has been present at many fundraisers as well as the recent National Conference of State Legislators, which was held in San Antonio this year. Participation in these activities is extremely important in our efforts to keep the Texas land title industry familiar to our state representatives and your voice strong. Your PAC dollars are what make this possible, and every dollar counts, so support the TLTAPAC today by making a contribution now.
Best Regards,
Aaron Day
REGULATORY
TTIGA Reducing Guaranty Fee to $2
The Texas Title Insurance Guaranty Association (TTIGA) will reduce the $5 per policy fee to $2 beginning January 1, 2012. The Guaranty Fee Remittance Form will be updated in the coming months to reflect this change. The fee is set by TTIGA's Board of Directors, and they are due on the first day of the month following each calendar quarter. For more information, visit the TTIGA website.
TDI Quarterly Audit Results Published
One of our goals is to help you understand and stay compliant with TDI rules and regulations. Below is a summary of recent TDI audits, violations and enforcement actions from March through May 2011. Read TDI's complete summary of operations for the quarter or read the key statistics below.
Compliance Audits
TDI's goal is to comprehensively audit agencies at least once every two years. Through May, 541 out of the 577 licensed agencies have been audited in the last two years, a 93.8% rate. Twenty-one additional agencies have been audited within the last three years and 14 new agencies are yet to be audited.
Commissioner Orders & Active Cases
From March through May 2011, TDI Commissioner Mike Geeslin signed 20 orders resulting in fines and the revocation of four licenses. Through May, 128 cases remain active, including 35 cases involving Texas Insurance Code violations and 23 cases involving the misappropriation of fiduciary funds.
Compliance Audit Results
Below are TDI’s most common audit findings from March through May 2011. The numbers represent how many agencies had an infraction, not the number of times the infraction occurred.
NUMBER OF AGENCIES
CATEGORY
DESCRIPTION
43
Texas Insurance Code Section 2702.053
Actual receipts and/or disbursements not in agreement with settlement statement or premium split not disclosed
40
Escrow Accounting
Outstanding checks not cleared timely
35
Minimum Escrow Accounting Procedures & Internal Controls
Every disbursement not supported by invoice or sufficient other evidence
33
Procedural Rules
P-21: Schedule D of commitment not in file or premium split not disclosed on commitment
25
Guaranty Files
Funds not disbursed or escheated to state
24
Escrow Accounting
Disbursement sheets missing, incomplete or incorrect
22
Guaranty Files
Legal documents not recorded timely with county clerk or evidence of timely recording not on file.
19
Procedural Rules
P-22: No T-00’s in files or T-00’s incorrect or incomplete
16
Escrow Accounting
Escrow bank accounts not styled as "escrow" or "trust"
Avoid Fines!
TLTA has education to help you stay in compliance with regulators, such as our recent Webinar Drafting Effective Compliance Plans, which was held earlier this month. You can pre-order the recording here, which will be available by September 1.
You may also be interested in the Webinar Replay Audit Survival: TDI, Underwriter and Annual Independent Audits. Order this Webinar Replay nowor view our other archived webinars.
TLTA Committees Continue Preparation for New Cycle
The TLTA Regulatory Committee met in July to discuss the recently passed legislation, review previously submitted agenda items and plan for a new hearing at the Department. During the meeting three new subcommittees were formed to review and address certain rulemaking pieces of House Bill 2604, TLTA's recent minimum capitalization legislation and to review the Limited Coverage Chain of Residential Title Endorsement. The subcommittees are currently meeting and final recommendations will be made to the full committee at the September 9 meeting in Austin. We will continue to keep you up to date as things develop.
The Legislative, Federal Issues and Judiciary Committees are also scheduled to meet in September so stay tuned for further details regarding their efforts. It's not too late to get involved - if you are interested in serving on a TLTA Committee or becoming a one-day volunteer please contact Mary Beth at the TLTA office at 512-472-6593.
TREC: Revised Seller's Disclosure Notice Mandatory Sept. 1
The use of a revised version of the TAR Seller's Disclosure Notice (form 1406) is mandatory Sept. 1. The new version adds entries for:
a "single blockable main drain in pool/hot tub/spa" as well as a definition of such a condition
"any rainwater harvesting system connected to the property's public water supply"
designating whether any liquid propane gas is "community (captive)" or "on property"
For more information, visit the Texas Real Estate Commission website.
TDI's Releases Legislative Report
In its recent TDInsight newsletter, TDI summarizes legislation passed during the 82nd Legislative Session that impacts the state insurance industry, including some of the legislation TLTA worked to pass this session. View the report.
JUDICIARY
AG Issues Opinion on Property Tax Calculations
Texas Attorney General Greg Abbott recently issued an opinion regarding the proper method of calculating interest and penalties on the residence homestead of an elderly or disabled person whose property taxes have been deferred under section 33.06 of the Tax Code. Abbott concluded the calculation of interest and penalties on these taxes are governed by section 33.06 of the Tax Code for the entire period during which the deferral is effective. Read the full opinion GA-0881.
ON THE FEDERAL FRONT - THE ALTA REPORT
ALTA, CFPB Hold Roundtable on Combined Mortgage Disclosures
Earlier this month, ALTA and other industry trade associations joined the CFPB to provide more input and feedback on the latest round of draft disclosures that are part of its Know Before You Owe Project. The roundtable was meant to be a follow-up from a series of roundtables held last year.
During the call, the CFPB announced that it has tested the disclosure form in Baltimore, Los Angeles and Chicago, and elicited more than 20,000 comments through the Know Before You Owe website. According to the CFPB, "we have relied on internet tools as a way to get structured feedback in a timely manner." ALTA and TLTA members were an important part of those 20,000 comments, and earlier this month, TLTA sent this letter commenting on the 3rd round of draft forms.
According to the Bureau, the next round of forms will come out in September with testing taking place in Springfield, MA. The testing will highlight a refinance transaction. The Bureau also suggested that they would begin testing a revised HUD-1 this fall, in October at the earliest.
At the roundtable, ALTA staff relayed concerns from the RESPA Task Force that it is difficult to provide solid feedback on the forms in the Know Before You Owe iterative process when one does not know how the form will interact with the HUD-1 and the regulations. ALTA pushed the Bureau for more concrete information about their vision for the disclosure regime and the process. CFPB staff responded that when they get to revising the closing document, they anticipate using the same process of sharing prototypes and accepting feedback. They also stated their interest in learning how the two disclosure and closing statements work together and how consumers can use both. "Our whole goal is to get to something that benefits industry and consumers," CFPB staff said. "The iterations won't stop."
ALTA Urges Inclusion in QRM Standard
ALTA is urging federal regulators to modify its proposed risk retention provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) to include sensible underwriting features that are proven to reduce risk.
“Despite this mandate to promote safe mortgage underwriting, the proposed rule misses the mark because it fails to include sensible requirements for underwriting legal title to the collateral,” said Anne Anastasi, president of ALTA, in a letter to federal regulators. “This underwriting, through a title search backed by a title insurance policy, is an essential aspect of safe mortgage lending that is endorsed by the Federal Housing Finance Agency, the Department of Housing and Urban Development and the private market.” Read the full press release.
ALTA President Testifies on Mortgage Origination
ALTA President Anne Anastasi testified last month during a hearing before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity titled, "Mortgage Origination: The Impact of Recent Changes on Homeowners and Businesses."
"Mortgage disclosure laws are primarily designed to help consumers shop for the mortgage and settlement services. While the goal of providing them with timely information about their transaction is laudable, the execution reveals some shortcomings that actually cause confusion and may be counterproductive for consumers," Anastasi said. "As we seek to improve the mortgage origination process, we need to fundamentally rethink federal mortgage disclosure laws, which are a key part of the architecture of the current process."
Listen to the Testimony | View the Full Press Release
Michelle Korsmo Appointed ALTA CEO
The American Land Title Association (ALTA), recently announced the appointment of Michelle Korsmo as Chief Executive Officer. Korsmo has been serving as Chief Operating Officer for ALTA. She joined ALTA in 2008 when she was named senior vice president, marketing and member programs. Since coming to ALTA, Korsmo has helped guide the association to record membership and revenues, while increasing contributions to the Title Industry Political Action Committee. Korsmo replaces Kurt Pfotenhauer, who has joined First American Title Insurance Company as executive vice president and vice chairman. View the full company press release.
Wading Through the Mortgage Disclosure Quagmire
By Jeremy Yohe | ALTA
It’s been nearly two years since the Real Estate Settlement Procedures Act (RESPA) was reformed and HUD began requiring the use of a new Good Faith Estimate (GFE) and a new Settlement Statement, which transformed the HUD-1 from a disbursement document to a form with aggregated lines designed to help consumers shop for settlement services. While it’s debated whether or not this has helped consumers shop (it’s been reported that 56 percent of buyers say they did no comparison shopping when obtaining a loan), one positive that came out of the new GFE was Owner’s Title Insurance being quoted on the form. That led to a boon for some title agents.
Read the Full Article | TLTA's Letter to CFPB About the Recent Forms
TLTAPAC
Why I Give: Joey Prohaska Joey Prohaska
Joey Prohaska
President, Professional Escrow and Title Services, Inc.
I am proud and honored to have donated to the TLTAPAC and to have also taken the Career Commitment Pledge. Making this commitment is my way of providing continuous support to the TLTAPAC on behalf of the industry that has furthered my career.
The title industry is constantly being challenged as to its worth and the TLTAPAC works tirelessly with legislators to inform them and educate them about its value. TLTAPAC allows the voices of all Texas title professionals to be heard by our elected officials.
My active involvement in TLTA encourages my participation in the TLTAPAC. Supporting the TLTAPACis a professional and financial investment.
Donate | Career Commitment Pledge | View Donors
We Need Corporate Contributions!
With your help, the TLTAPAC is off to another great start this year, already raising $40,350 – but there are many administrative costs associated with raising money and our corporate coffers are low. In order to comply with the laws governing political action committees, money from individual donations cannot be used to administer these programs. The funds to cover numerous expenses like credit card and bank fees and the costs associated with fundraisers must come from the PAC’s corporate account. Please consider making a corporate donation payable to TLTAPAC by mailing a corporate check to:
Texas Land Title Association
1717 West 6th St., Suite 120
Austin, TX 78703
TLTAbay Coming Soon!
We Need Donations!
The TLTAbay online auction is an annual fundraiser benefiting the TLTAPAC. The auction will begin at 9:00 a.m. on Friday, November 4, 2011 and end at 4:00 p.m. on Thursday, November 10, 2011.
We need your help to secure auction items and ensure another spectacular year. Suggested donation items include: electronics, gift cards, sporting event tickets, travel vouchers, vacations, spa packages and jewelry.
Donate an item or contact Ryan Poulos for more information.
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