Agent Angle

A KENTUCKY AGENCY NEWLETTER | WINTER 2021

Happy New Year and Goodbye to 2020!

By: Tom Campbell, VP, Division State Manager

Let’s look forward and say farewell to thee, o’ year of too many acronyms!

How to prepare for what comes next? Forecasts the past several years have not exactly been spot on. The 2020 Kentucky housing market smashed previous records; existing home sales up 25% and home prices up 12% over 2019. It is difficult to foresee this pace continuing. Nationally, most forecasts show a continuing trend with rates stabilizing and unemployment numbers expected to fall. Only the most pessimistic economists forecast a return to “seasonal” norms with slowdowns in the 4th Quarter.

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In This Issue

1

Happy New Year and Goodbye to 2020!

2

Underwriting Update: Moving Forward in These COVID-19 Times

3

Underwriting Update

4

2021: Triumph with Technology

The Federal Reserve is expected to maintain a real-estate-friendly policy by keeping the federal funds target below 0.25% through 2022. This should allow the 30-year fixed rate to remain well below 3.3% for the next two years. The average rate for the decade 2010-19 was 4.1%. Commercially, the damage from the pandemic has not been uniform, and many predictions point to a recovery for the latter part of 2021. With pessimism subsiding and the availability of investment capital, economists predict the commercial real estate sector will make a strong recovery.

Throughout the state of Kentucky, we saw many agents continue to invest in updating their technology and up-training their employees. They were also continually looking to hire new employees. As this trend continues in 2021, our office is available for assistance in these matters and other workflow and marketing areas.

Hopefully, the holiday season allowed you and your staff a breather before 2021 kicked into high gear. All of us at the Kentucky First American Agency office are incredibly grateful to our agents. We know this business is not easy, and 2020 was one of the toughest periods for all. Yet, despite the challenges encountered, you and your staff were able to keep a tremendous attitude while clearing one obstacle after another. We hope we were there for you when you needed us in 2020, and we will continue to strive to be there for you in 2021.

JANUARY 18 TH MARTIN LUTHER KING JR. DAY State Agency Office Will Be Closed

On behalf of our valued agents, First American Title has made a generous donation to the American Heart Association.

Thank you for your time and efforts,

Tom Campbell The information contained in this document was prepared by First American Title Insurance Company (“FATICO”) for informational purposes only and does not constitute legal advice. FATICO is not a law firm and this information is not intended to be legal advice. Readers should not act upon this without seeking advice from professional advisers. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.

First American Title | Agent Angle | Winter 2021

AMD: 01/2021

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UNDERWRITING UPDATE:

MOVING FORWARD IN THESE COVID-19 TIMES By: Barry Tuemler, Esq., Kentucky State Counsel

March 16, 2020, seems like such a long time ago. On that day, I learned that due to COVID-19, some of the County Clerk’s offices around Kentucky would be closing, and our agents would not be able to conduct in-person closings in the same way they had for years. Over the next several weeks, our industry scrambled to make things work under these chaotic circumstances. Settlement agents modified their closing procedures to accommodate their customers by conducting remote closings online and closing transactions outdoors where a safe distance could be maintained. And although these last nine months have been difficult, the title industry in Kentucky has found ways to get the job done and continue to help to keep the economy moving by facilitating real estate closings. Despite all the obstacles brought about by the COVID-19 pandemic and the related government regulations, you persevered.

As we look forward to a new year, I’d like to discuss some positive 2020 items that will continue to help our industry as we move forward.

The RON bill in Kentucky took effect January 1, 2020, and allowed the use of a remote online notary public to acknowledge an individual’s signature electronically online.

Unfortunately, when the COVID crisis hit in March, although several title agents had applied to become a remote online notary, the Kentucky Secretary of State’s office did not have the procedures in place to process the applications for approval. As a result, at a time when remote online closings were most needed, they were not an option. With the prodding of the title industry through the Kentucky Land Title Association (KLTA) and other related industries, the Secretary of State stepped up their efforts and expedited the approval process for RONs. At the same time, the Governor signed into law SB 150 as an emergency relief act. Among other things, it allowed the use of video teleconference technology (i.e., Zoom, Facetime) by a traditional notary public when witnessing the wet signature of an individual instead of being in the same physical location with the signor.

In April, FA Bulletin KY-2020-003 was issued, establishing a temporary underwriting protocol to use RONs and video teleconferencing. This bulletin allowed the use of video teleconference technology to conduct closings and allowed the use of an out-of-state RON to facilitate the execution and notarization of real estate documents. KY-2020-003 is still in effect and will remain in effect as long as Governor Beshear maintains his position that Kentucky is in a state of emergency as the result of the COVID-19 pandemic.

First American Title | Agent Angle | Winter 2021

Eventually, we will issue a bulletin to more clearly explain our permanent position on items related to the use of RONs. We will continue to take the position that First American will insure RON closings for land in Kentucky where a properly commissioned out-of-state RON notary has conducted the closing or has notarized specific documents as part of the closing process.

Another pandemic-related major concern in our industry was the closure of the County Clerk’s offices and other government offices. In March 2020, a few Clerk’s offices closed, and several others were threatening to do the same.

Knowing these closures would paralyze our business, the Kentucky Land Title Association (KYLTA) began efforts to organize a coalition of interested parties including state associations representing bankers, real estate agents, automobile dealers, and mortgage brokers to bring pressure upon the Clerks to remain open for recording documents and conducting title searches. This coalition went to great lengths to contact everyone from the Governor’s office to the Secretary of State and the Attorney General’s offices to convince the Clerks their offices needed to remain open. As a result, all of the Clerks agreed to stay open. Many were only open on a partial basis, but it was enough to allow sufficient access to the records to conduct a title search and record our real estate documents.

Through the KYLTA, our title industry has a recognized voice around the state with our elected officials and state officers.

Without this coalition’s efforts, many of the Clerks’ offices would have fallen in line with other state government offices and closed. We were very fortunate in Kentucky – there were quite a few states around the country whose recorders’ offices shut down for long periods.

If you are not a member of the KYTLA, I encourage you to join and get involved. The KYLTA has grown significantly over the last five years and is becoming a player at the statewide level. More and more, our legislators and state officers are looking to the KYLTA for input and support for issues affecting our industry. The title industry is continually changing, and it’s important your voice and concerns are heard through the KYLTA. If you are interested in becoming a member, here is a link to a membership application https://kentuckylandtitle.org/page/JoinRenew. You can also contact Katie McMurry, who serves on the membership committee if you have any questions.

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UNDERWRITING UPDATE By: Mark D. Rucker, Esq., Associate Underwriting Counsel

Power of Attorney Law Change On July 14, 2018, Kentucky’s new Power of Attorney (POA) law went into effect. Codified at KRS 457.010-457.260, the law set out quite a few new requirements and changes affecting the preparation and usage of POAs in Kentucky.

One of the new provisions, KRS 457.050, required a POA to be signed in the presence of two (2) disinterested witnesses, in addition to the notary requirement.

As of July 15, 2020, KRS 457.050 has been revised to delete the two (2) disinterested witness requirement. As a result, a POA need only be signed by the principal and notarized to be considered properly executed.

If you have any questions about the validity of a POA used as part of a transaction you will be involved in, please feel free to contact us for clarification.

Six-Month Creditors’ Rights Under Kentucky’s prior law regarding creditors’ rights in estate matters, creditors had six months to file a claim after a personal representative’s

First American Title | Agent Angle | Winter 2021

appointment. If there was no personal representative appointed, they had two years.

Recent changes to KRS Chapter 396, which went into effect on July 15, 2020, made some substantial changes in the law.

Similar to the prior law, under KRS 396.012(1), a creditor must file a claim within six months of the appointment of a personal representative.

However, under 396.012(2), that six-month period drops to 60 days if the personal representative provides notice to the creditor in writing.

Most importantly, KRS 396.011 was amended to require all claims against a decedent’s estate be brought within the earlier of eight months after the decedent’s death or the established periods created through the new section of KRS Chapter 396.012 as mentioned above.

As a result, the two-year time limit has been decreased to eight months in cases where no personal representative was appointed.

From an underwriting standpoint, this change has little impact on how we deal with conveyances involving estates. We will allow transfer by an estate within the eight-month creditors’ rights window.

If you are dealing with a transaction involving an estate as the Seller and have any questions, please contact us for guidance.

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2021:

TRIUMPH WITH TECHNOLOGY By: Katie McMurry, Agency Account Representative

The resilience and adaptability shown by our agents in 2020 was nothing short of amazing! As we enter the beginning of 2021, the world and the real estate industry still have challenges, but I am very proud of the way our Kentucky group has responded. I am equally proud to work for First American. (Can we all agree Barry may be a real-life superhero? I am still wondering what really stresses him out?) More than anything, the Kentucky agency team is proud and immensely thankful to be partners with YOU! You have our utmost respect for your ongoing perseverance.

First American has a renewed focus on the importance of secure and efficient technology resources for agents. I hope you have taken advantage of the recent enhancements to our rate calculators, software integrations, and our Agent Print ProTM marketing platform. If you’ve been too busy – understandable! I am very excited about the new products and enhanced programs rolling out in early 2021: » Clear2Go™: Automated decision engine service providing information to quickly and efficiently clear title on First American Title residential refinance orders. » PRISM™: Combining powerful customer engagement tools, allowing title agents to share on-the-go quote technology directly to their customers’ desktops and mobile devices. » Property Profiles in AgentNet®: Detailed report of property information and relevant data, such as comparative sales. » Further Automation for SoftPro® Select Users: CPLs, searches, underwriting requests » Excellence in Education: In-person and recorded instructional resources for new hires, existing staff, and attorneys.

I will be in touch soon to discuss how we can help you adapt, thrive, and grow your business in this market.

Entrepreneur Richard Branson once said, “Every success story is a tale of constant adaption, revision and change.”

Here’s to 2021 and whatever it may bring. We will succeed together!

First American Title | Agent Angle | Winter 2021

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