Agency Today – A Magazine About Growth and Prosperity™

AGENCY

TODAY

Issue 5 | October 2016

A M AGA ZIN E A BOUT GROW TH A N D PROSPER IT Y

TM

COMMERCIAL UNDERWRITING TIPS TO IDENTIFY VALID AND SUSPICIOUS EMAIL FINANCIAL ABUSE OF ELDERS AND DEPENDENT ADULTS INSURING ACCESS OVER RAILROAD RIGHTS OF WAY FIRST AMERICAN’S FINANCIAL STRENGTH TRANSFORMATION

AGENCY

TODAY

A M AG A Z I N E A BOU T GROW T H A N D PROSPE R I T Y

TM

Welcome Agency Today is a publication covering a broad range of topics focused exclusively on growing and strengthening your title business. First American Title is committed to providing you valuable content, new ideas and access to the brightest minds in our business.

We believe that in an age where so much can be lost in the digital interference of email, attachments and the internet that a well-crafted and thoughtful publication dedicated to your success is a great way to communicate our commitment to the independent title agent.

It is my hope this magazine finds a home in your collection of reference materials. As your account representative, it is my commitment to not only help you resolve everyday challenges but to help you achieve new levels of success in your business.

AGENCY

TODAY

Issue 5 | October 2016

A M AGA ZIN E A BOUT GROW TH A N D PROSPER IT Y

TM

COMMERCIAL UNDERWRITING TIPS TO IDENTIFY VALID AND SUSPICIOUS EMAIL FINANCIAL ABUSE OF ELDERS AND DEPENDENT ADULTS INSURING ACCESS OVER RAILROAD RIGHTS OF WAY FIRST AMERICAN’S FINANCIAL STRENGTH TRANSFORMATION

CONTENTS FROM THE EDITOR All of us at First American Title, thank you for your business and loyalty. It is with great pleasure we bring you this edition of Agency Today—A Magazine About Growth and Prosperity™ produced exclusively for policy-issuing agents of First American Title.

The focus of the magazine is to provide articles that help you “work on” your businesses rather than “work in” your businesses. We hope you enjoy this publication, but more importantly, we hope it provides value to further enhance your organization.

All the best, Louis Pontani SVP, SALES AND MARKETING AGENCY DIVISION

AGENCY TODAY STAFF EDITORIAL Louis Pontani EDITOR SVP, SALES & MARKETING

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AGENCY UPDATE

7

FIRST AMERICAN ECONOMIC CENTER

8

EXECUTIVE SPOTLIGHT

Evan M. Zanic, Esquire, Executive Vice President, Agency Division President

Chris Leavell, Chief Operating Officer, First American Title Insurance Company

10

LEGAL BRIEF

14

TIPS TO IDENTIFY VALID AND SUSPICIOUS EMAIL

16

AgentNet ® EASILY RESET PASSWORDS AND OBTAIN FORGOTTEN USER IDS

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FIRST AMERICAN FINANCIAL STRENGTH

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FIRST AMERICAN’S FINANCIAL STRENGTH TRANSFORMATION

20

COMMERCIAL AGENCY UNDERWRITING GROUP

21

REELING IN THE BUSINESS

22

EASY-TO-USE ONLINE RESOURCES

24

WIRE FRAUD

26

AgentNet ® FUNCTIONALITY TIPS & TRICKS

28

IMPROVING LENDER TITLE POLICY DELIVERY ADDRESSING MISSING POLICY REQUESTS

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PASS-THRU MARKETING PROGRAM

33

SUCCESSION PLANNING

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STATE AGENCY OFFICES

By: Michele A. Green, SVP, Senior Business Counsel, Agency Division, First American Title

By: American Land Title Association

By: Mark Seaton, EVP, Chief Financial Officer, First American Financial Corporation

By: Lou Pontani, SVP, Sales and Marketing, Agency Division, First American Title

Lynn Lewis EDITOR/LEAD COPYWRITER

ART AND DESIGN Sheli Cordero DIRECTOR, MARKETING & COMMUNICATIONS GRAPHIC DESIGNER

SMS ADVERTISING Elizabeth Sarber FAPRES/SMS

Agency Today – A Magazine About Growth and Prosperity™, published by First American Title Insurance Company.

First American appreciates the articles contributed by independent vendors and the statements contained therein are solely those of the vendor and are not attributable to First American.

By: Michele A. Green, SVP, Senior Business Counsel, Agency Division, First American Title

By: Lee Fields, Managing Director, Business Consulting Services, HA&W

AGENT SPOTLIGHTS

37

Charlson & Wilson Bonded Abstracter’s, Inc. Canyon Title, A Boston National Company Page, Scrantom, Sprouse, Tucker & Ford, P.C.

Yukon Title Company, Inc. GRS Title Services, LLC

Agency Today | Issue 5

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Agency Update With Evan M. Zanic, Esq. EXECUTIVE VICE PRESIDENT AGENCY DIVISION PRESIDENT

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Agency Today | Issue 5

Q The title and settlement industry has gone through one of the largest and most costly regulatory changes in its history. How do you think the implementation of the TILA-RESPA Integrated Disclosure will change the future of the industry?

A Well, first there are the obvious changes such as the overall costs to run an agency due to increased compliance and regulatory mandates. As time progresses, I believe agencies will look for cost reductions in their back office processes and better technology to solve for margin reductions. I also think lenders will start to exert their influence on title providers as they strive to manage their third party risk responsibilities. If I look forward perhaps ten years in my “cracked and cloudy” crystal ball, we may see a world where lenders are taking more control of title order placement. This may spur new business models or at the least, new relationships.

Q The title industry plays an important role in providing peace of mind to homebuyers by protecting their property rights. What challenges did the “Owner’s Policy optional” create for First American Title and its agents?

A I think the first thing it did was help the industry put together a clear and concise message about what we do and, more importantly, why we do it. With the help of the American Land Title Association (ALTA) and the marketing products the First American Agency Division offers our agents, the concern was much less than what we previously thought. It does, however, continue to present a nagging issue that simultaneous rate quotes are not clear to the consumer or the industry. ALTA is constantly lobbying this issue with regulators.

Q Members of the title community are turning to back office resources to decrease or offset their increasing operational expenses. What resources does First American Title have available to assist agents and position them for growth?

A First American has developed and deployed back office services for many operations across numerous states.

We are constantly adding new products and services to our agency solutions offerings. I recommend our agents reach out to their agency representative to learn more about how we can help them streamline their operations and improve their margins.

Q Tell me about the Commercial strategy for the Division.

A Our agents across the country tell us that one of the primary reasons they choose to work with us, especially on large commercial deals, is the trusted relationship they share with the local underwriting team. Knowing this, we are extraordinarily focused on ensuring that we have the most knowledgeable, responsive and creative underwriters in the business – and that our underwriting philosophy responsibly meets the needs of the market. On these points, our underwriting teams across the country are the best in the industry. To provide continued focus and support to this strategy, in 2016, we announced the formation of a Commercial Agency Underwriting Group. This team of seasoned underwriting professionals specializes in commercial agency transactions, and they are valued members of not only our Agency Division team but also the Home Office Underwriting Department. As such, they are able to lead the Agency Division’s underwriting of the largest commercial transactions referred to us by our agents for assistance and approval. The strategy is enhanced by the fact that each of these underwriters has a regional base of operations – out in the field, close to our agents - allowing them to develop and maintain trusted relationships and to provide the best possible service to our agents who partner with us on these large commercial transactions.

Q What is required to compete in today’s industry?

A The single word I would use to describe what is needed to not only compete but operate in the title industry of today and the future is sophistication.

Sophistication regardless of an agent’s size or scope.

Know Before You Owe (aka TRID) and the Qualified Mortgage Rule place more performance demands on title agencies and title underwriters alike. Additionally, new threats in cybercrime require intensified vigilance and rock-solid processes and procedures that are constantly adhered to. As lenders continue to evolve their mortgage platforms after implementing TRID, I think we can expect many of them to start placing more demands on their third-party vendors. Our conversations with lenders lead us to believe many are still digesting new processes and technology, while larger lenders are thinking about the next iteration of their mortgage operations. These demands will require greater sophistication in performance, technology, and compliance, regardless of agency size.

Agency Today | Issue 5

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Thank You All of us at First American Title thank John

Hollenbeck

for his leadership during his recent tenure as president of the American Land Title Association. His service and dedication to our industry continues to strengthen it for all of us.

www.firstam.com

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Agency Today | Issue 5

FIRSTAM.COM/ECONOMICS

FIRST AMERICAN ECONOMIC CENTER MARK FLEMING CHIEF ECONOMIST First American Financial Corporation

First American Chief Economist, Mark Fleming, is often asked where people can learn more about and keep up with our research on current economic trends. The First American Economic Center is the home for First American to share Mark’s perspectives and economic research with real estate professionals across the country.

STATE OF HOMEOWNERSHIP RESOURCE PAGE AND WHITEPAPER www.firstam.com/economics/state-of-homeownership The page features a new whitepaper authored by First American Chief Economist Mark Fleming, titled “The State of Homeownership,” which explores declining homeownership, one of the most important economic issues facing our country today.

The resource page also includes a brief video highlighting the discussion among industry experts, housing advocates and policy makers at a leadership forum hosted by First American last year.

The State of Homeownership - Microsoft Internet Explorer File Edit View Favorites Tools Help Back Address

Search

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http://www.firstam.com/economics/state-of-homeownership/

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Links

FIRST AMERICAN REAL HOUSE PRICE INDEX www.firstam.com/economics/real-house-price-index The First American Real House Price Index (RHPI) measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time and across the United States at the national, state and metropolitan area level. Because the RHPI adjusts for house-buying power, it is also a measure of housing affordability.

REAL ESTATE SENTIMENT INDEX www.firstam.com/economics/real-estate-sentiment-index The First American Real Estate Sentiment Index (RESI) measures title agent sentiment on a variety of key market metrics and industry issues, including expectations for changes in purchase and refinance transaction volume and prices across multiple property types. The RESI is based on a quarterly survey of independent title agents.

More than 5,000 title agents from 50 states have participated in the first four editions of the quarterly survey. In 2016, the survey has also tracked title agent sentiment regarding the implementation of the Know-Before-You-Owe rule, also referred to as the TILA-RESPA Integrated Disclosure (TRID) rule.

"Understanding the trends that influence homeownership decisions today and in the future can help inform the discussions necessary to preserve homeownership opportunities for the next generation." –Mark Fleming

@mflemingecon Agency Today | Issue 5

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Executive Spotlight

Chris Leavell CHIEF OPERATING OFFICER FIRST AMERICAN TITLE INSURANCE COMPANY

Q In late 2013 and early 2014, you served as Acting Agency Division President; what surprised you most about working in the Agency Division?

Q What was your first job that marked your career in the real estate/title business?

A While I’ve been with First American for nearly 20 years, I A While I can’t say I was surprised by this, what I recall most about that time was how incredibly impressed I was by the caliber of the agents we work with. I still feel that way.

It wasn’t long before I served as acting president of the Agency Division that the division itself was established.

Much of the reason we reorganized our Title Company structure from geographic divisions to customer-centric divisions was to establish an entire group within First American solely focused on our agent partners. I chose to act as president for several months so that I could learn more about our agents and get a better understanding of their businesses and needs. It quickly became clear to me that the agents we work with excel in many ways – most strikingly in the way they well serve their customers.

Even after handing the reins over to Evan, who is incredibly focused on our agents’ needs, I still dedicate a lot of my time to the Agency Division. I’m proud of the good people we have throughout the division and the strong relationships we have with our agents.

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Agency Today | Issue 5

started in the real estate business in 1985 as an REO sales representative at Weyerhaeuser Mortgage Company.

After other positions in the mortgage field, I joined First American in 1997, first serving as general manager of the California division of First American’s Lenders Advantage group. I later led our appraisal group, default information group and, eventually, the title company as a whole.

Q What important trends do you see in our industry?

A There are several trends that I believe we’ve all seen emerging recently. Certainly the first is the need for a thoughtful compliance effort. Running our businesses in a proper manner, helping to secure our customers’ information and funds, reporting and remitting in a timely manner, responding to customer complaints – all of these, and more, aren’t just good practices to meet regulatory compliance, they are good practices in general. I’m thankful for the work our trade association has done to promote best practices, and proud of our employees and agents who are focused on implementing them.

I also think that transparency is an important trend that is really no longer a trend, but a common practice. By being transparent with our consumer customers, we’re all helping to make the real estate transaction experience better for them.

And increasing transparency between underwriters and agents only leads to stronger and healthier relationships, and often to streamlined processes.

Lastly, I believe that the good work that so many are doing across the industry to help homebuyers better understand the real estate transaction process and realize the value of title insurance is a great practice that must continue. The better educated the homebuyer is on the process, the better the experience for everyone involved.

Q How do you think First American Title will evolve in the next 5-10 years, and what is your role in creating those changes?

A Much of our evolution, I believe, will revolve around the technology we develop to help achieve a great transaction experience for all involved. Some may help to increase integration with lenders’ systems. Some may help to facilitate an electronic closing. And some will be designed to continually improve the consumer experience.

In the Agency Division specifically, we’re constantly focused on improving technology to further streamline processes for us and our agents. We want to ensure that working with First American is as seamless and consistent as possible. Much of the evolution of these technologies – and of the products and services we’ll develop to accompany them – will be based on our agents’ evolution. We’ll work closely with our agents to best understand their needs as their businesses adapt to an ever-changing marketplace.

Q What would you characterize as the biggest threat to our industry?

A In the immediate future, I’d have to say cyber fraud. I think it’s critical that everyone in our industry focus on identifying the risks and finding ways to mitigate them.

Without doing so, we’re lessening our business’ – and the title industry’s – value.

I applaud the work that the ALTA, our company and our agents are doing to be vigilant and focused on this.

On another note, while there is a lot of talk about emerging technologies disrupting our industry, I firmly believe we’re in control of our own destiny. I don’t see our role in the real estate transaction being disintermediated, but we have to take responsibility to constantly improve our practices and our value to our customers. It’s what our industry has done for more than 150 years, and it should serve us well in the future.

Agency Today | Issue 5

9

Legal Brief By: Michele A. Green SVP, Senior Business Counsel Agency Division First American Title

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Agency Today | Issue 5

INSURING ACCESS OVER RAILROAD RIGHTS OF WAY GENERAL PRINCIPLES • • •

•

•

STAY ON THE RIGHT TRACK

Right of access to cross must be confirmed or created in favor of the insured.

Public rights of access for street crossings may be granted by the railroad.

Private rights of access can also be obtained, such as an easement or a revocable license from the railroad.

Licenses typically do not run with the land in favor of successors or assigns, are often not recorded, and may be terminated by the railroad.

Prescriptive rights generally do not accrue against railroad entities.

•

•

•

Research whether property is impacted by railroad rights, which can include active, inactive or abandoned lines http://safetydata.fra.dot.gov/OfficeofSafety/publicsite/ Query/PublicGradeCrossingInventoryByStateCounty. aspx In most cases, access rights can be established by public right, or private right such as an easement or license.

If no public or private right to cross the railroad property can be located or created in favor of the insured, the policy (and any commitment or preliminary report) must contain an exception for lack of access.

For detailed information, review the Underwriting Communication NA-2016-009-Standard: Insuring Access over Railroad Rights of Way, in the Content Library of AgentNet® or contact your local First American Title underwriter.

INSURING ACCESS THROUGH NATIVE AMERICAN LANDS GENERAL PRINCIPLES •

• •

•

Native American Lands (NAL) include more than just land within an Indian Reservation owned in restricted fee. It includes land held in trust by the United States for Native Americans, and land owned in unrestricted fee by Native Americans, whether inside or outside of a Reservation.

A valid easement or right of way is required.

Do not rely solely upon a road or highway’s designation as “county” or “state” to insure access if the road or highway is on NAL. Many access easements and rights of way are for a term of years. Be certain to check for expiration of these grants.

WHAT TYPE OF NATIVE AMERICAN LANDS PROVIDE ACCESS FOR THE INSURED LAND? •

•

Land owned in unrestricted fee by a Native American tribe or Tribal Entity: • The easement or right of way must be granted by the Native American tribe or Tribal Entity.

• Special analysis is necessary as to the application of the Indian Nonintercourse Act, 25 U.S.C. § 177.

Land is owned in restricted fee or held in trust by the United States of America: • The easement or right of way must be granted by the Department of the Interior, either acting directly or through the Bureau of Indian Affairs.

• The individual Native American, Native American Tribe, or Tribal Entity must consent to the grant.

If access to the Land requires crossing Native American Lands, you must consult with your First American Underwriter and be prepared to discuss the following: • •

The ownership status of the NAL over which the right of access is to be insured; prior grants or assignments of easements or rights of way benefiting the Land to be insured, if any, including evidence of the authority of the granting entity to have made the grant;

• •

the constituent documents of the Native American tribe or Tribal Entity involved, including its statutes/bylaws; and whether the Company has previously issued a policy relative to the Land without taking an exception for the lack of a right of access.

For detailed information, review the Underwriting Communication NA-2016-012-Standard: Access Through Native American Lands, in the Content Library of AgentNet® or contact the Native American Lands Practice Group or the Corporate Underwriting Department at 800.854.3643.

Agency Today | Issue 5

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Legal Brief (continued)

FINANCIAL ABUSE OF ELDERS AND DEPENDENT ADULTS Financial exploitation of elders and adults with disabilities is a fastgrowing form of abuse in the United States. Authority and capacity issues in real estate transactions must be carefully considered to prevent, detect, and respond to financial abuse of elders or dependent adults.

BE ALERT FOR TRANSACTION RED FLAGS • • • • •

Recent, uninsured deeds in the chain of title Use of powers of attorney Free and clear property; often targeted by fraudsters, or family members Documents signed outside of escrow Sales or loan proceeds paid to someone other than borrower or seller

BE ALERT FOR IMPAIRED COGNITIVE ABILITY • • • • •

Appears disoriented Led or controlled by another person Unaware of dates and times Lacks understanding of the transaction Anything else that disagrees with your intuition

Most states permit rescission of a real estate transaction or mortgage involving undue influence, duress, incompetency, incapacity, or lack of authority and nearly every title insurance policy provides affirmative coverage against such defects.

For detailed information, review the Underwriting Communication NA2016-013-Standard: Financial Abuse of Elders and Dependent Adults, in the Content Library of AgentNet®, or contact your local First American Title underwriter.

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Agency Today | Issue 5

A claim can be costly in terms of time and money spent to find a resolution, and your reputation with your customer can be derailed by the negative impact of a claim.

Let the nationally recognized title experts at First American Title help you provide quality insurance protection.

ALTA PILLAR #2 TRUST ACCOUNTING TrustLink™ provides daily 3-way trust account reconciliation with electronic access and approval; along with our unclaimed property service, you can rest assured your trust accounts are in line with best practices.

YOUR SUCCESS IS OUR PRIMARY MISSION. That’s why we offer First American agents more Best Practice solutions than any single provider.

800.767.7832 sms-sales@SMScorp.com firstamsms.com ©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE:FAF

ALTA PILLAR #3 SECURITY OF NON-PUBLIC PERSONAL INFORMATION From clean desk practices to secure electronic document delivery, our electronic office management system secures your customer’s data with all the cost saving benefits of working without paper.

Exclusively for StreamLine™ and GreenFolders® users, SMS Vault™ is our online data back-up service that integrates seamlessly with your business and makes backing up your data a snap.

ALTA PILLARS #4 SETTLEMENT PROCESSES / #5 POLICY PRODUCTION Our release tracking and title clearing service gives you confidence that all documents needed to clear liens paid off at closing are correctly recorded with the appropriate jurisdiction, allowing you to issue a final title policy in a timely manner.

Our StreamLine™ title production platform takes the guess work out of premium rate calculations.

And with customizable workflow processes, you can keep everyone on track and quickly prepare and deliver title policies.

TitleExpress® has customizable workflow and event management to help track title policies and recordings quickly and efficiently. From a robust rate and premium calculator to document preparation, TitleExpress® allows you to streamline your process and prepare policies with speed and accuracy.

Agency Today | Issue 5

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Tips to Identify Valid and Suspicious Email While companies may have spam ďŹ lters and antivirus software, spam and phishing emails can still slip through employee inboxes. Email recipients are the most critical element in preventing an attack. Here are some tips on how to identify the authenticity of a questionable email.

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Agency Today | Issue 5

Incorrect Grammar/Spelling/Text Body Many phishing email contain misspellings. Some of these messages have been poorly translated from other languages. Additionally, you will want to pay attention if the time or date appears in the message body of an email.

If the email contains the date format of DD/MM/YY, 24-hour time or coordinated universal time (UTC,) it’s likely that the email’s point of origin generated outside of the United States.

Email Format/Absence of Logos/Plain Text Email Most legitimate messages will be written with HTML. It should be a mix of text and images. A poorly constructed phishing email may show an absence of images. This includes the lack of the company’s logo. If the body of an email is only an image as text, it’s possible that it is illegitimate. Outlook blocks showing images by default. If the email is all plain text and looks different than what you’re used to seeing from a frequent sender, you may want to contact the sender directly in a new email or phone call.

Urgent Request for Personal Information One tactic that is commonly used by hackers is to alert you that you must provide and/or update your personal information about an account (e.g., Social Security number, bank account details, account password). Phishers will use this tactic to drive urgency for someone to click on a malicious URL or download an attachment aiming to infect the user’s computer or steal their information.

Suspicious Attachments High-risk attachments file types include: .exe, .scr, .zip, .com and .bat. Spam filters will generally do a good job of quarantining those formats. Most companies commonly send and receive .zip, .doc, .docx, .xls, .xlsx, .ppt, .pptx and .pdf. However, a malicious sender can implant devious code in those formats as well. Once the attachment is opened, the computer is already compromised. Take caution if you have sent an email that has an attachment and the sender is questionable. You will want to verify the legitimacy of the email first. Next, you will want to examine the context of why the attachment is being sent.

Links in the Email A common practice is to avoid blindly clicking on links in an emails. Outlook allows you to hover over a link before clicking on it. If the link in the body of the email is different than what Outlook hovered preview reports, it is not legitimate. Even if it seems legitimate, open a new browser window and type the URL directly into the address bar.

If you’ve clicked on a link, a phishing website will look identical to the original. However, your system may already be compromised. If you’re work email is connected to your phone, you will want to take extra precaution.

Use Work Email for Work Purposes Only Employees should avoid using their work email address for personal signups. These include social media websites or customer loyalty/ reward programs.

Reprinted with permission of the American Land Title Association.

Agency Today | Issue 5

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AgentNet® Easily Reset Passwords and Obtain Forgotten User IDs

A recent enhancement to AgentNet enables users to change their password and obtain forgotten User IDs without having to contact the Agency Service Center (ASC) for assistance.

Retrieve Forgotten Password From the login page, click I Forgot My Password. Enter your User ID, click Submit, and a security question will appear for you to answer. When you answer the security question correctly, a temporary password will be emailed to you.

Retrieve Forgotten User ID From the login page, click I Forgot My User ID. An email containing your User ID will be sent to the email address on file.

Change Password Select the Profile tab from the AgentNet home page. Select Change Password at the bottom of the page. You will be prompted to enter your current password then create and confirm your new password.

Note: Passwords need to be reset every 365 days.

Note: An AgentNet account will be locked after five unsuccessful attempts to enter a password. If you do get locked out, contact the Agency Service Center at 866.701.3361 for assistance.

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Agency Today | Issue 5

$5.2B

$5.2

$4.8B

REVENUE CAGR: 6.3%

Billions

$4.2 $3.8B INVESTMENTS CAGR: 12.6%

$3.2 $2.6B

$2.2

Agency Today | Issue 5

17

FIRST AMERICAN’S

Financial Strength Transformation As a title underwriter we have made financial commitments to our policyholders, customers, employees, partners and By: Mark Seaton EVP, Chief Financial Officer First American Financial regulators. We have an obligation Corporation to maintain sufficient capital and liquidity to fulfill those commitments. Whether paying title claims or other liabilities, many of which are very long-term, we must have the financial resources to satisfy those obligations, regardless of the economic environment. Fortunately, First American has a good story to tell.

Financial strength is essential to our business. Commercials clients need comfort that we have the ability to pay large claims. Regulators want assurances that we will be able to fulfill our obligations to policyholders.

There are many factors that determine financial strength but I’d like to highlight two that are particularly important.

POLICYHOLDERS’ SURPLUS Policyholders’ surplus is defined as assets (cash, stocks, bonds, etc.) less liabilities (claims reserves, accrued liabilities, etc.). It is the extra amount left over for policyholders in case of unforeseen events. If assets decline in value due to market disruptions or claims reserves increase due to higher than expected claims experience, surplus is the cushion to be able to absorb these shocks. An underwriter needs surplus to operate.

ASSET QUALITY The quality of assets of an underwriter is also important. An underwriter needs high quality, liquid assets. A high surplus amount can erode quickly if it’s comprised of low quality assets that are difficult to liquidate or of low credit quality that may decline in value when they are needed most.

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One measure of asset quality is Affiliated Investments as a % of Surplus. This measure indicates how much of an underwriter’s surplus is invested in illiquid affiliated investments, such as intercompany notes or operating entities – investments that can’t be sold quickly or may be difficult to value. The lower the number, the higher quality assets an underwriter has.

As you can see from the graph below, not only has First American increased surplus in recent years, but our affiliated investments have declined dramatically during this same time period.

US$ in millions

150%

$1,400 $1,208

$1,200

108%

$1,000

$828

$800

$1,104 $956

$996

$979 100%

73% 54%

$600

50%

$400

28% 15%

$200

14%

$-

0% 2011

2012

Surplus

2013

2014

2015

Q2'16

Affiliated Investments as a % of Surplus

An alternative measure of asset quality is Marketable Securities as a % of Reserves. A financially prudent underwriter will maintain enough marketable securities to satisfy its claims reserves. Below is a graph that demonstrates the investments First American has made to improve the quality of our surplus. Today, our marketable securities far exceed the amount in reserves to pay claims.

US$ in millions

$1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $0 2011

2012

Marketable Securities

2013

2014

2015

Q2'16

Reserves

First American has a proud tradition dating back 127 years. Having a strong financial foundation helps ensure that our business will be around for many years to come.

Agency Today | Issue 5

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COMMERCIAL AGENCY UNDERWRITING GROUP LEGAL EXPERTISE AND COMMERCIAL EXPERIENCE The First American Title Commercial Agency Underwriting Group is a highly-specialized group of Home Office underwriters committed to developing and growing relationships with our agents who close large commercial transactions. Regionally-based, acting in partnership with regional agency leadership, these knowledgeable professionals will utilize this local knowledge, understanding of the business and visibility to create a smoother path to a decision point in the fast-paced, demanding and deadline-sensitive commercial real estate environment.

Regardless of the size or complexity of the transaction, the Commercial Agency Underwriting Group has the legal expertise, commercial experience, and positive, creative approach necessary to provide the highest level of underwriting support and decision-making from the field, in close proximity to the agent and customer.

PENNSYLVANIA

MISSISSIPPI

THOMAS BLAIR

DONALD G. OGDEN

tblair@firstam.com O: 610.233.4549 C: 610.781.7262

dogden@firstam.com O: 601.863.1032 C: 601.497.5945

ILLINOIS

HEATHER R. SCHUETTE

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Agency Today | Issue 5

NATIONAL AGENCY

hschuette@firstam.com O: 630.799.7008 C: 312.835.1496

MARGO HANNUM

NATIONAL AGENCY

NATIONAL AGENCY

JEFF DEGOOD

RICHARD HALFMANN

jdegood@firstam.com O: 803.767.1671

rhalfmann@firstam.com O: 774.314.5809

mhannum@firstam.com O: 313.515.5795

Reeling in t he Business Recently I was asked, “How often I should ask my agent for more business?” My initial thought was every second of every day; however, like most of my thoughts, I had to By: Lou Pontani SVP, Sales and Marketing take a step back and ground myself in Agency Division reality. Every second of every day may First American Title not be the best answer. And that led me to think about a recent fishing trip for tarpon with my friend and colleague, Tom Gates, State Manager of North Carolina and Southern Virginia. Determining the frequency of asking for more business is very similar to the tactics used in fighting big game fish, like sailfish, tarpon or marlin.

The moment you hook into a 200- or 500-pound fish, you are in for a long ‘process’. That process is a tug of war and a waltz all wrapped into one. You spend most of the time placing constant pressure on the rod, so the hook stays firmly placed. In between keeping line pressure, you are slowly reeling in, using your entire body to pull up on the rod so you can get three or four cranks to pull in n

some line. Seconds later, the fish makes a run and peels off 100 plus yards in seconds, and you are back to square one. Other times, the fish launches out of the water, twisting and flipping, so you drop the rod tip, placing slack in the line to prevent a spit hook or broken line. Managing a business relationship can be a similar process.

If you think of your referral sources as being hooked, you know sometimes they are running and taking more line, or they might be jumping out of the water, so you bow the line; heck, sometimes they even jump into the boat. The point is this; keeping pressure on the line a majority of the time is essential.

It reminds the customer or the fish that you are there, you are performing at your best and want more from them. You can maintain constant pressure by asking this very simple question at the conclusion of most of your conversations with customers; “Did we measure up to your expectations, and what else can we do to grow our business with you?”

IIf you consistently miss the opportunity to place pressure, then how are you going to land the fish? You don’t reel in a th 500-pound marlin by cranking the reel one time, and you don’t 5 reel in more transactions by asking the question once in a blue moon. You consistently ask a majority of the time; realizing that not every time will be the right moment, but a majority of the time it is.

If you don’t ask, someone else will.

Agency Today | Issue 5

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& Simple

SHORT

Easy-To-Use Online Resources

22

Agency Today | Issue 5

American Agency Division W First firstam.com/agency

Information Center W Ownership firstam.com/ownership

Find the solutions, resources and professional services focused on providing simple and effective solutions that make it easy to do business.

Help your home buyers and sellers become better prepared for the closing process and understand the value of purchasing an Owner’s Policy of title insurance. This online resource center offers articles, videos and infographics that you can quickly and easily share with your customers.

The State of Homeownership - Microsoft Internet Explorer

The State of Homeownership - Microsoft Internet Explorer

File Edit View Favorites Tools Help Back Address

File Edit View Favorites Tools Help Search

Favorites

http://www.firstam.com/economics/state-of-homeownership/

Back Go

Links

Address

Search

Favorites

http://www.firstam.com/economics/state-of-homeownership/

Go

Links

Resource Center W TRID firstam.com/trid-agent

Date Timing Calculator W Closing/Consummation https://closingdates.firstam.com

Informational videos explaining the history of TRID and what it means to you, your customers and your business, along with ways to keep transactions smooth and timely, this website will be one more valuable tool to educate your entire network.

Calculate the Closing Disclosure mailing date based on consummation date or determine the earliest consummation date based on mailing date. Calendar includes rescission dates and can be printed and emailed to clients.

The State of Homeownership - Microsoft Internet Explorer

The State of Homeownership - Microsoft Internet Explorer

File Edit View Favorites Tools Help Back Address

File Edit View Favorites Tools Help Search

Favorites

http://www.firstam.com/economics/state-of-homeownership/

Back Go

Links

Address

Search

Favorites

http://www.firstam.com/economics/state-of-homeownership/

Go

Agency Today | Issue 5

Links

23

Wire Fraud “I never thought it would happen to me!”

By: Michele Green SVP, Senior Business Counsel, Agency Division

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Agency Today | Issue 5

There has been a resurgence of agents falling victim to instances of wire fraud.

In interviewing the affected agents, the responses have a number of common themes:

Falling victim to a wire fraud scheme or related fraud can be financially devastating to agents and their business relationships.

“I never thought it would happen to me.”

“I knew the risks, but hadn’t adequately communicated to or implemented processes for my front line people.”

Make sure you are insured properly against these risks and know that a fraud attempt absolutely can, and likely will at some point, be made against your business.

“I’ve communicated with the employees about these risks; the First American Title flyer is up in our lunchroom, but they sent the wire anyway.”

Communicate with your employees loudly and often about these risks and be sure to establish procedures and protocols to guard against failures.

Help protect your agency by sharing these helpful tips with everyone in your office: Wire and other disbursement instructions received by email should be confirmed by telephone at a known or independently-confirmed number, NOT the telephone number at the bottom of the email you are trying to confirm.

Be especially skeptical of any change in wiring instructions. Who really changes their wire instructions that frequently?

Be leery of a new deal coming to your office out of nowhere. Example: “I have a sales contract and a deposit for property I am purchasing, and I was referred to your office. Will your office act as title and settlement agent for my transaction?” This conversation is typically followed by a subsequent request to wire out funds originally deposited by check.

Be suspicious of emails from free, public email account domains as they are often a source of risk.

Confirm the account to which you are wiring is in the name of the party entitled to the funds.

Consider providing YOUR wire instructions via hard copy only, with a notation: With cyber crimes on the increase, it is important to be ever-vigilant.

If you receive an email, or any other communication that appears to be generated from our office, containing new, revised or altered bank wire instructions, consider it suspect and call our office at a number you trust. Our bank wire instructions seldom change.

Watch out for phishing emails with embedded links, even when they appear to come from a trusted source such as First American Title.

Agency Today | Issue 5

25

AgentNet

®

ACCOUNT PERSONALIZATION PREMIUM REVENUE The Premium Revenue section can be added to your dashboard by submitting a request to the Agency Service Center (ASC) at agencysupport@firstam.com.

PROFILE DEFAULT AND PREFERENCE OPTIONS » Update contact information » Set security questions for password resets » Select your default office in the Office Information section » Add/edit email notification addresses » Set TRID Rates display defaults MY VIEW When My View is turned on and offices are selected, user will only see the files in the My Files section belonging to the office locations selected.

ADMINISTRATION » MANAGE AUTO-REPORTING: From the Administrative tab, agents with Can Remit Rights are able to turn on automatic reporting of priced files at the office or firm level. Files with no errors and completed Rates & Fees information will automatically be remitted based upon set-up selected. Email notifications are sent to agents with links to the invoices for manual or ePay options. » MANAGE LENDERS: Search for, add new, edit and delete existing lenders appearing in the My Lenders list.

»

MANAGE eSIGNATURES: Add, edit or delete signatures for authorized or licensed personnel within the agency.

FILE WORKFLOW UNDERWRITING WORKBENCH From within an AgentNet file, navigate to the Underwriting tab and select the Underwriting Request feature to submit Over Underwriting Limit, Special Pricing, Mechanics’ Lien Risk and other unusual risks. View all data exchange and determinations in the 26

Agency Today | Issue 5

Functionality Tips & Tricks file and receive secure, encrypted email notifications regarding status of request.

Search results can be sorted by clicking on a selected column header.

SHARING FILES Coordinate file processes and responsibilities between two First American agents in AgentNet with the Linking Files feature. Track roles and responsibilities, view information input by both agents and reduce the need to exchange information via email or telephone.

CONTENT LIBRARY Use key words and filter for the best results. Example: If searching for an endorsement that is an equivalent to an endorsement with an ALTA number (appears in the footer of the endorsement form), enter the ALTA number and refine results by state.

CREATE NEW FILE OR COPY FILE Within a file, the More Options button allows the user to create a new file without going back to the My Files screen, or copy all or a portion of the information from an existing file to a new file number.

CONTENT LIBRARY NOTIFICATIONS Select the email icon to the right of the Search Results in the Content Library to receive email alerts when requested content is modified.

RATES & FEES | EFFECTIVE DATE The ability to choose a Rate Effective Date when calculating premiums is helpful when a recent rate change has occurred or when determining a simultaneous rate when policy dates are different.

Enter the rate structure effective date for correct CPL, policy premium and endorsement rates for the file.

REOPENING A FILE A closed file can be reopened from either the Jackets tab, to add another jacket, or from the Rates and Fees tab, to add endorsements to an already remitted jacket. Once calculated, the fee to be remitted for the new products will be highlighted in yellow.

RESEARCH AND REPORTS

MY REPORTS Track activity, usage, compliance and exceptions to keep tabs on Best Practices policies as well as remittance lags. Reports include CPL Activity Log, Incomplete Files and Policy Log. Additionally, the Policy Upload Report is available in two versions: history of uploaded policies and comparison of policies remitted to policies uploaded.

INVOICES AND STATEMENTS » Pay: ePay or Manual Pay invoices still in open status » Research: Search by file or policy number to locate specific invoice and remittance dates » View Invoices: View all user invoices and status » View Statements: Shows most recent statement with ability to search up to 12 months of prior statements.

FILE SEARCH Available in both the My Files and My Remittance sections. Search for a file based on content (buyer’s name, address, etc.), file status (open, closed, cancelled, etc.), or an open/closed-status date range.

For additional information, refer to the Job-Aids and training videos in the User Guides section of AgentNet or contact your local agency representative.

Agency Today | Issue 5

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Improving Lender Title Policy Delivery Addressing Missing Policy Requests Lenders are increasing their focus on timely receipt of the lender’s title policy.

In 2015, First American Title received over 19,000 requests from lenders for copies of loan policies issued by agents. 2016 is on pace to surpass that volume. As an indication of the lending industry’s response to new pressures, these request come from lenders of all sizes and types.

HOW IS FIRST AMERICAN TITLE HELPING? Our goal is for lenders to consider First American Title agents as the best. In keeping with this goal, we formed a dedicated team to handle missing policy requests. This team responds to lender policy requests and works with title agents. If the title agent has already provided a copy of the policy to First American Title, we will provide a copy to the lender without contacting the agent. If we are not able to locate a copy of the policy in our records, an email will be sent making the agent aware of the lender request.

3.

WHAT CAN I DO AS A TITLE AGENT?

6.

1.

2.

28

Recognize the increasing importance of timely policy delivery.

Review lender closing instructions for the exact location to send the policies. We frequently find that while the title agent has sent the policy, the lender, or the Compliance Division of the lender, can not locate it.

Agency Today | Issue 5

4.

5.

Upload policies using the Policy Upload feature in AgentNet ®. This will allow First American Title to respond directly to a lender's request for a missing policy copy. Contact your Sales Representative or visit the User Guide tab in AgentNet for details.

Verify the accurate loan number appears on the face of the Loan Policy.

Check with your software vendor for available “event tracking” or operational reports for tracking aging policy delivery.

Know that any email you receive from our Policy Procurement Team has your best interests in mind.

Together, we can address lender needs and continue our position as having the best title agents in the industry. First American Title will continue to support our title agents and their lenders to maintain a strong focus on excellence.

FIRST AMERICAN TITLE

Pass-Thru Marketing Program First American Title agents have access to over 100 pieces of professionally designed marketing material that you can use to secure your position as a valuable resource and industry expert.

Since its launch in 2011, the Pass-Thru Marketing Program has helped thousands of First American agents across the country educate their business partners and consumers about a wide-range of topics. From first-time homebuyers and the value of an Owner’s Policy to FIRPTA, TRID and cyber fraud, the Pass-Thru Marketing Program has what you need.

Material can be customized with your company logo and contact information then downloaded for print, posting online or distribution by email.

• Consumer education • Agency education/job-aids • Industry reference material

• Bi-lingual marketing/education • Activity sheets/coloring books for children

• Holiday and note cards • And so much more!

Log into AgentNet® and access the Pass-Thru Marketing Program today!

Program not available in CA

Agency Today | Issue 5

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Succession Planning Optimize the Future of Your Title Agency

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Agency Today | Issue 5

By: Lee Fields Managing Director, Business Consulting Services (770) 353-4776 lee.fields@hawcpa.com www.title.hawcpa.com

An increasing number of title agency owners plan to retire or exit the industry in the next 5 to 10 years, but most of these business owners do not have a succession plan in place. While the majority of title agency owners may have a few ideas about what they intend to do with their business as they approach retirement, developing a comprehensive succession plan often takes a back seat to daily business operations.

If you are wondering if advanced planning and professional advice are really necessary, consider the fact that you have worked hard throughout your career to build your business and provide for your family and employees. Why would you place your life’s work at risk? Planning, independent advice and early action are critical to ensuring the longevity of your business, the well-being of your family and the security of your wealth in retirement.

The ultimate goal in succession planning is to optimize future personal and business outcomes. To achieve this, you need to develop a cohesive plan of decisions, actions and timetables built around very clear and specific goals.

Common succession goals often include: •

• •

•

Building personal wealth to ensure you have enough capital to do the things you enjoy in retirement Providing for your family and ensuring your wealth is not lost by the next generation Handing over the business to the next generation in a manner that will provide continuity and facilitate the growth of profitability and capital value Growing and maximizing the value of your business to prepare for a sale to a third party

• • • •

Unexpected death, illness or injury to yourself or family members Rapidly changing real estate market conditions that undermine capital value Poor tax planning that leads to a loss of wealth Family disputes, divorces and break-ups in defacto relationships

Whether your intent is to pass your title agency over to the next generation or to sell the business, the core desire remains the same – to ensure that your lifetime’s work will continue, and your legacy will be sustained. Of all the succession planning options out there, the ‘do nothing and wait’ approach should never prevail. History shows us that by doing this, the value of your business and your personal worth will almost always diminish over time.

Preparing now for the years to come will enable you to achieve maximum future prosperity and wellbeing. Don’t let your years of hard work and effort go to waste. Commit to succession planning early and follow it through to its conclusion. One day down the road, you’ll be glad you did.

Life happens – you can’t always account for unexpected events. However, a well-crafted succession plan can incorporate some of these possibilities into your strategy to ensure you are prepared. Some common life disruptions to consider include:

Agency Today | Issue 5

31

O N E

S O U R C E .

M A N Y

S O L U T I O N S .

WE DO IT FOR YOU! Every day, transaction after transaction,

your customers depend on you to make sure their interests are protected. Do even more to maintain that confidence by incorporating our TrustLink™ and FasTrax™ services into your daily process.

TrustLink’s experienced accounting professionals provide daily 3-way trust account reconciliations and deliver daily status reports for all your trust accounts.

You’ll gain unmatched visibility into your accounts and the ability to expose potential fraud, all while meeting compliance regulations.

Let the experts at FasTrax manage the complete process of clearing liens. For a fixed-cost per lien, FasTrax eliminates the burden of tracking releases, whether you need a previously paid off lien cleared or a release tracked and recorded for a current payoff.

sms-sales@SMScorp.com

sms-sales@SMScorp.com

800.767.7832

800.767.7832 x1362

©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE:FAF

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Agency Today | Issue 5

D I G I T A L

O F F I C E

M A N A G E M E N T

S O L U T I O N

MAKING PAPERLESS A REALITY GreenFolders® empowers title and settlement agents, escrow companies, and law practices to overcome the limitation and hassle of paper files while safeguarding Non-public Personal Information.

Intuitive yet robust, GreenFolders is fully customizable and will accommodate your unique workflow. Whether you’re looking to go completely paperless or transition only a portion of your operations to a digital workflow, GreenFolders has a solution to suit your needs.

www.greenfolders.com

801.747.2132

©2016 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE:FAF

Agency Today | Issue 5

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Customize Your Marketing Material with ALTA's New Print Shop ALTA members can take advantage of this exclusive member benefit to customize, download and print advertisements, rack cards, marketing flyers and posters.

Available Products 1. Advertisements: advertisements can be used as flyers in coffee shops, handouts at first-time homebuyer seminars and ads for your real estate clients.

2. Marketing Flyers: Use these one-pagers as handouts at a housing conference or you can add them to your new Homebuyer Outreach Program consumer introduction packet.

3. Rack Cards: ALTA's rack cards are full of information about the benefits of title insurance in a handy, two-sided, half-sheet 4. Posters: ship to your next housing seminar, staff training, legislator/ regulator meeting or open house.

Take your consumer marketing to the next level with altaprints.com.

To view all the resources available in ALTA’s Homebuyer Guide to help ALTA members easily communicate the benefits of owner’s title insurance, go to www.alta.org/homebuyer.

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Agency Today | Issue 5

The American Land Title Association (ALTA) focuses on providing resources to help its members succeed in the market. This list outlines some of the important items available to help ensure you take advantage of our full range of member-exclusive benefits.

How to get the most out of your ALTA Membership 1

TRID Resources

Members have access to a bevy of material and information to help them comply with the new TILA-RESPA Integrated Disclosure rules. www.alta.org/cfpb • • • •

Training DVD ALTA Model Settlement Statements Recorded webinars ALTA blog (blog.alta.org)

2

Best Practices

Membership provides you access to several tools to aid implementation of ALTA’s Title Insurance and Settlement Company Best Practices. Items available include: • Compliance Management Report • Assessment Readiness Guide • Webinars www.alta.org/bestpractices

3

Education and Training

Members get access and discounts to various educational material. www.alta.org/lti • Distance learning and online courses • DVD training library • Free monthly webinars (www.alta.org/titletopics)

4 Conferences and Meetings

5 Publications

ALTA hosts many conferences and meetings throughout the year allowing members to network, develop new business relationships and gather with friends. www.alta.org/meetings

ALTA offers a wide range of publications and products to help members keep informed. Members have access to exclusive news, providing you with a marketing advantage. Make sure you are getting all of these:

6 ALTA Policy Forms License

• • • •

Access to all of ALTA’s policy forms comes with your membership. www.alta.org/forms

7

TitleNews (print and digital) TitleNews Online (emailed Tuesday and Thursday) Advocacy Update (emailed Monday) News You Can Use (daily email)

National Title Professional Designation

ALTA members can earn this designation to demonstrate industry knowledge, experience and dedication essential to the transfer of real estate. www.alta.org/ntp

8 Errors and Omissions Insurance

9 Participate on a Committee

Any ALTA member or associate member may apply for E&O coverage from the Title Industry Assurance Company (TIAC). http://tiacrrg.com/

Share your expertise on one of ALTA’s 32 committees and position yourself as an expert in your local market. www.alta.org/about/leadership

ALTA PROUD Promote your ALTA membership by displaying the ALTA logo on your company website and email signature line. You can also display your Membership Certificate and Certificate of License in your office.

QUESTIONS? Have questions about your membership? Contact Cande Fudge, ALTA’s membership and licensing manager, at cfudge@alta.org or 202-296-3671.

10 Homebuyer Guide ALTA members have access to more than 60 resources to help educate homebuyers, real estate agents, builders and lenders about the benefits of owner’s title insurance. www.alta.org/homebuyer • • • • • • •

Marketing collateral Social media content Rich media advertising How-to documents Blog posts Homebuyer letters Home Closing 101: ALTA members can link to ALTA’s consumer education website. www.homeclosing101.org/links/

Agency Today | Issue 5

35

FIRST AMERICAN TITLE

STATE AGENCY OFFICES First American Title's Agency Division is committed to providing the resources, services and underwriting guidance our title agents/attorneys need across the country to achieve new levels of success in their business.

State

Phone

State

Phone

State

Phone

Alabama

205.879.1818

Louisiana

504.588.9252

Ohio

614.310.8097

Alaska

206.336.0736

Maine

207.774.6884

Oklahoma

405.706.2008

Arizona

602.685.7085

Maryland

443.741.4540

Oregon

206.336.0736

Arkansas

901.821.6500

Massachusetts

617.345.0088

Pennsylvania

610.265.8440

California

714.250.2178

Michigan

800.399.3003

Rhode Island

401.434.1000

Colorado

303.305.3358

Minnesota

763.416.2093

South Carolina

803.731.4409

Connecticut

860.727.9908

Mississippi

601.366.1222

South Dakota

763.416.2093

Delaware

302.855.2120

Missouri

816.622.3120

Tennessee

615.771.9141

Florida

877.798.7058

Montana

206.336.0736

Texas

281.588.2200

Georgia

404.250.1604

Nebraska

402.697.4646

Utah

801.316.0600

Hawaii

808.206.8420

Nevada

702.855.0837

Vermont

802.764.3065

Idaho

206.336.0736

New Hampshire 603.227.9210

Virginia

703.480.9500

Illinois

866.213.4920

New Jersey

609.528.6860

Washington

206.336.0736

Indiana

800.999.1176

New Mexico

505.881.3300

West Virginia

304.736.1111

Iowa

402.697.4646

New York

212.381.6600

Wisconsin

608.236.1300

Kansas

913.681.0600

North Carolina

336.668.7233

Wyoming

303.305.3358

Kentucky

502.425.7200

North Dakota

763.416.2093

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Agency Today | Issue 5

Agent

SSPOTLIGHT POTLIGHT Q: Do you feel that the labeling of the Owner’s Policy of Title Insurance as optional made consumers less likely to purchase an Owner’s Policy? If so, how did you overcome the objection?

Charlson & Wilson Bonded Abstracter’s, Inc. Closing Office Title Office 1426 Browning Pl., Ste 103 111 N. 4th Street Manhattan, KS 66502 Manhattan, KS 66502 PH: 785.537.2900 O: 785.565.4800 www.charlsonandwilson.com

We believe labeling the owner’s policy as optional makes it less likely buyers will elect to purchase an owner’s policy, especially if it will save them money at closing. In our opinion, it makes owner’s policy coverage a lot like flood insurance coverage, which very few buyers purchase unless their lender requires the coverage as a condition of making the loan. Educating your mortgage and real estate agent customers on the importance of their buyers having an owner’s policy offers the best chance of overcoming the buyer’s natural inclination to save money at closing. After all, buyers will rightfully look to their real estate agent and mortgage loan officer for advice on why there is value in purchasing an owner’s policy of title insurance. Some real estate agents and mortgage loan officers might not understand that by not having an owner’s policy of title insurance, their buyer will be responsible for dealing with any title problems that might arise. For example, in our market and many others, real estate taxes are a high-dollar line item which can result in a fair number of claims if they are left unpaid by the previous owner. The few hundred dollars spent on an owner’s policy is inexpensive when compared to the buyer’s cost of having to pay the back taxes and pursue the seller for reimbursement.

(Pictured L to R)

Callie Marks, Owner/Partner marks@charlsonandwilson.com

Todd Sheppard, Owner/Partner sheppard@charlsonandwilson.com

Lee Taylor, Owner/Partner taylor@charlsonandwilson.com

It is important real estate agents and mortgage loan officers understand an owner’s policy provides for the cost of defense under a covered claim if a title issue has to be litigated. Many consumers understand the value of having the title insurance company pay the attorney and handle the hassle of settling a complicated issue related to a title matter. Many have heard of an insurance company providing for the cost of defense under an automobile or home owner’s policy, and they can quickly see the value of that coverage, but few make the connection regarding title insurance unless the coverage is explained to them in similar terms. Unfortunately, they see our product as something they have to buy to secure a loan and purchase a house. Another benefit to consider would be in the unlikely event of a title issue, a buyer with an owner’s policy may be less likely to look at the real estate agent and mortgage loan officer as negligent because they did not advise the buyer of the value of an owner’s policy.

Agency Today | Issue 5

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Q: What are some lessons learned from TRID that will contribute to your success and growth in 2017?

The greatest lesson we learned from TRID was that a negative event is an opportunity for us to provide leadership to our clients. Unlike many of our competitors, we embraced TRID as a chance to bring greater efficiency and transparency to the process and, in doing so, enhance the borrower experience and our clients’ reputations. In many ways, we were already there since again, unlike our competitors, our production systems have leveraged paperless automation for almost a decade; this made the adoption of and compliance with ALTA Best Practices far less challenging. While most title agents were struggling with the change, inwardly focused and drudging through the mechanics of data and physical file security, we focused on collaborating with clients. As they became clearer on their courses of action, the benefits of initiating and maintaining ongoing dialogues began to pay off in fewer redundancies and less paperwork, more closely integrated processes and faster, more responsive service to borrowers.

Rob Lindley CEO Canyon Title, A Boston National Company 1127 Auraria Parkway Suite 101 Denver, CO 80204 O: 303.831.7575 Robert@CanyonTitle.com www.CanyonTitle.com

An additional, supporting lesson is that title agency executives should proactively build relationships not only with the operational folks but also their clients’ leadership teams. These relationships created before TRID pre-positioned us as an expert so that as the regulations were imposed our clients sought our advice regarding how best to deal with them. Our focus on strengthening relationships has led to a greater trust of our brand and more business.

Q: What challenges and opportunities in the commercial real estate industry have the potential to redefine your strategies in 2017?

The commercial real estate industry is constantly evolving. We see changes across all practice groups and locales. But there is one constant: an ever-increasing demand for transactional efficiency, with both principals and service providers needing to do more with less. As a national commercial-only agency, GRS | Title is well positioned to serve transactions in any U.S. state, or in multiple states at once. We are part of GRS Group — a boutique CRE services firm named in June to Inc. Magazine’s 2016 Top 50 Workplaces in America. GRS Group is a nimble, experienced and customer-focused business partner that creates significant value on multiple levels. Whether attorneys, developers or bankers, our clients must keep overhead in control; they need to complete more transactions without having to hire more employees. This makes GRS Group’s single-point-of-contact project management process a valuable differentiator. In addition to providing commercial title insurance, GRS Group offers site and property assessment services, financial advisory and technology-driven transaction management. This allows clients to monitor turn times, project status and other key information without having to engage multiple vendors. Bottom line, GRS Group makes its clients more productive by effectively reducing risk and streamlining complex commercial real estate transactions—regardless of location, property type or number of properties.

GRS Title Services, LLC 901 East Byrd Street, Suite 1100, Richmond, VA 23219 | 804.767.4590 9903 East Bell Road, Suite 130, Scottsdale, AZ 85260 | 480.428.5575 grs-global.com

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Agency Today | Issue 5

Q: Do you feel that the labeling of the Owner’s Policy of Title Insurance as optional made consumers less likely to purchase an Owner’s Policy? If so, how did you overcome the objection?

During the opening and closing process, the licensed employees at Yukon Title take every opportunity to sell the buyer on the value of an owner’s policy of title insurance. The owner’s policy is commonly paid for by the seller in a new or resale transaction in Alaska. The biggest objection to the purchase of the policy seems to come from the sellers. When they read that the owner’s policy is optional, they assume it should be optional for them to pay for it; even though they agreed to pay for the policy in the provisions of the real estate contract.

Yukon Title Company, Inc. 714 Gaffney Road Fairbanks, AK 99701 O: 907.456.3474 www.yukontitle.com

Roger Floerchinger Owner, Chief Executive Officer roger@yukontitle.com

Beverly Floerchinger Owner, Corporate Secretary, Compliance Officer bev@yukontitle.com

Linda D. Nguyen Law Partner Page, Scrantom, Sprouse, Tucker & Ford, P.C. Synovus Centre 1111 Bay Avenue 3rd Floor Columbus, GA 31901 O: 706.243.5628

One of the greatest frustrations Yukon Title experiences with TRID is the inaccurate disclosure of the cost of simultaneous issue policies. There is really no way to for employees to explain to the buyers how they came up with the calculation.

Yukon Title Company, Inc. is a full service title and escrow company with five offices in the state of Alaska.

Founded by the current owners in 1990 as a primarily commercial title insurer, we matured into a full service company and provide title insurance in the Anchorage, Palmer and 12 northern recording districts in Alaska. Customers can depend on our experienced, highly-trained title and escrow professionals to provide a seamless, positive experience when they are buying or selling a home or property.

My law firm, Page, Scrantom, Sprouse, Tucker & Ford, PC issues both owner’s and lender’s title policies for residential and commercial transactions. Our real estate attorneys and title agents encourage owners to purchase owner’s title policies as we know the pitfalls that may happen when an owner does not have title insurance. If a product is labeled “optional”, consumers will likely question if there is a need for them to purchase the product. This question is currently a hot topic in the residential title industry because of the new CFPB rules. However, the value and necessity of owner’s title insurance is relevant in both residential and commercial closings. Our attorneys overcome the consumer objection or question by being honest about the title issues we have seen on past closings, such as easement, survey and chain of title issues.

Owner’s title insurance can be helpful if you are selling the property or trying to obtain a loan, as future closing attorneys and title companies might rely on your owner’s title insurance policy to help solve a title issue. Also, it gives the land owner peace of mind that the property is insured for various title issues, such as clear title to the property and defective recording.

We let owners know the fee for title insurance is paid once at closing and not monthly like other insurance policies, such as hazard and life insurance policies. If the land owner is obtaining a lender’s policy, the simultaneous issue rate for both the loan and owner’s policies is relatively minimal, and this savings normally LTD@psstf.com helps encourage the owner to buy the owner’s policy. We remind the buyer that the loan policy only insures www.psstf.com the lender, not the property owner. If a buyer is faced with a title issue after closing and did not purchase owner’s title insurance, the owner will need to hire attorneys and pay all the expenses to solve the title issue. On the other hand, an owner that buys owner’s title insurance can file a title claim and the title insurance company hires attorneys, at the title company’s expense, to fight the legal battle. Bottom line, we let owners know that even real estate attorneys purchase owner’s title insurance to help protect their own real estate investments, as we know firsthand the need and value of the owner’s title policy.

Linda D. Nguyen is a law partner and shareholder of Page, Scrantom, Sprouse, Tucker & Ford, PC. Her law firm is one of the largest and oldest law firms South of Atlanta providing a broad range of legal services including residential real estate, commercial real estate, corporate, banking and financial services, bankruptcy, litigation, estate planning, mergers and acquisitions, labor and employment, and trademarks and copyrights.

Scrantom Sprouse Tucker Ford The firm maintains its principal office in Columbus, Georgia with additional offices in Winter Park, Page A T T O R N E Y S & C O U N S E L L O R S A T L A W Florida and Atlanta, Georgia.

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Agency Today | Issue 5

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AMD: 09/2016

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