January 2, 2013

FDIC Drop in Coverage Affects Escrow Accounts

New Limit is $250,000 on Trust Accounts
Because the recently proposed extension of unlimited FDIC insurance failed in the U.S. Senate, on December 31, FDIC coverage on trust accounts reverted back to $250,000, affecting title agents and their escrow accounts. Known as the Transaction Account Guarantee (TAG) program, the program was created during the 2008 financial crisis to prevent a sudden withdrawal of deposits. TAG allowed banks to pay a special fee to obtain full FDIC insurance for non-interest-bearing transaction accounts, which are essentially checking accounts used for payroll and other recurring expenses. The program was set to expire in 2010, but was extended by the Dodd-Frank Act. Supporters of the extension were unable to gather enough support to overcome a procedural objection in the Senate, and so the program expired at the end of the year. You may want to consult with your CPA to learn how to best minimize your exposure under this new limit. 

U.S. House Passes "Fiscal Cliff" Bill

Mortgage Cancellation Relief Extended
Late yesterday, the U.S. House of Representatives passed the Senate legislation to avert the "fiscal cliff," and President Barack Obama is expected to sign the legislation soon. Under the agreement, tax rates would remain the same for most households and mortgage cancellation relief is extended. The exclusion from taxes for gains on the sale of a principal residence of up to $500,000 ($250,000 for individuals) remains in effect, so only home sellers whose income is $450,000 or above and the gain on the sale of their house is above $500,000 would pay taxes on the excess capital gains at the higher rate (with corresponding numbers for individual filers).

A number of 'extensions,' which keep expiring tax provisions in place, are also included in the bill. Of most interest to real estate, the bill would extend mortgage cancellation relief for home owners or sellers who have a portion of their mortgage debt forgiven by their lender, typically in a short sale or foreclosure sale for sellers and in a modification for owners. Without the extension, any debt forgiven would be taxable, which, for underwater households, represents a financial burden. Also extended are deductions for mortgage insurance premiums and for state and local property taxes, which, along with the mortgage interest deduction, are important tax considerations for home owners and buyers. Read more from the National Association of Realtors.

Changes to Texas Department of Insurance Web/E-Mail Addresses

Update Your Address Book!
The Texas Department of Insurance (TDI) recently changed website and e-mail domains to @tdi.texas.gov. Be sure to update your bookmarks and e-mail address book. TDI's new website is www.tdi.texas.gov, and all employee e-mail addresses now end with the suffix @tdi.texas.gov. You may also search for any TDI employee by last name here.

Hensarling Announces Leadership Team for U.S. House Financial Services Committee

Press Release | The Committee on Financial Services
Chairman-elect Jeb Hensarling today announced he has selected his leadership team for the Financial Services Committee of the 113th Congress. Rep. Randy Neugebauer (R-Lubbock), will serve as Chairman of the Insurance, Housing and Community Opportunity Subcommittee.

"I look forward to working alongside my colleagues to pass laws to help foster the deepest, most liquid, competitive, efficient, innovative, and transparent capital markets the world has ever known," said Hensarling. "This talented group will play a critical role in that effort as we offer solutions to the challenges faced by America's struggling economy."

Hensarling also announced plans to combine two existing subcommittees -- the Domestic Monetary Policy and Technology Subcommittee and the International Monetary Policy and Trade Subcommittee. Read More ยป

A Challenge to All Escrow Officers!

The TLTAPAC Board of Trustees has issued a challenge this year to every Escrow Officer in the state to contribute a minimum donation of $25 to the TLTAPAC. With almost 6,000 Escrow Officers currently licensed in Texas, a $25 contribution from each would raise $150,000 for the PAC from Escrow Officers alone! With the 83rd Legislative Session just around the corner, your industry needs your support more than ever! Please donate online today here or you can send a personal check payable to the TLTAPAC with this form.