Agency Today – A Magazine About Growth and Prosperity™ by First American Title - Agency Division

AGENCY

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

Guide to eClosings and eSignings Anatomy of a Hack Construction Project with Broken Priority Affidavits and Indemnities Trade Show Tips

Issue 9 | October 2018

Expert Underwriting Trusted Relationships First American Title is focused on providing our agents with simple and effective solutions that make it easy to do business. It is our hope that this issue of Agency Today finds a home in your collection of reference materials. As your underwriter, it is our commitment to not only help you resolve everyday challenges but to help you achieve new levels of success in your business.

Agency Today | Issue 9

IN THIS ISSUE 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 deliver value to further enhance your organization. Louis Pontani CHIEF ADMINISTRATIVE OFFICER AGENCY DIVISION

THE ECLOSING PHENOMENON

GUIDE TO ECLOSING & ESIGNING

IT’S STILL ABOUT THE PEOPLE

LAVA ACTUALLY

ANATOMY OF A HACK

#WHATYOUNEEDTOKNOW

FRAUD RED FLAGS

ALTA RAPID RESPONSE PLAN FOR WIRE FRAUD INCIDENTS

AFFIDAVITS & INDEMNITIES

FIRST AMERICAN TITLE AGENT ADVANTAGE

BUZZ TECH AND INNOVATION LINGO

BREAST CANCER AWARENESS MONTH

AGENT SPOTLIGHTS

CONSTRUCTION PROJECT WITH BROKEN PRIORITY

NON-IMPUTATION COVERAGE WITHOUT AN AFFIDAVIT AND INDEMNITY

ATTORNEYS AS CLOSING AGENTS AND ACTING AS INTERMEDIARIES

TRADE SHOW TIPS

Carol E. Willoughby, VP, Northeast Regional Counsel

Derek M. Massey, Esq., VP, Massachusetts State Agency Manager

Rachel Hable, VP, Corporate Underwriting

Joshua A. Luksberg, VP, Connecticut State Manager

Jennifer Wooten, Sr. Project Coordinator, Agency Division Marketing

AGENCY TODAY STAFF EDITORIAL Louis Pontani CHIEF ADMINISTRATIVE OFFICER AGENCY DIVISION

Lynn Tarala

WIRE FRAUD INCIDENT RESPONSE WORKSHEET

EDITOR/COMMUNICATIONS SPECIALIST

ART AND DESIGN Sheli Cordero DIRECTOR, MARKETING & COMMUNICATIONS

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. 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.

Western Illinois Title Company Gilmartin Magence, LLP

Truman Title, Inc. First National Title Company

By: First American Exchange Company

Agency Today | Issue 9

The

eClosing Phenomenon

By: Carol E. Willoughby VP, Northeast Regional Counsel First American Title

Real estate industry news is rife with discussions about eClosings. At First American Title, we are constantly discussing legislation and technologies related to eClosing functionality. To me, eClosings are like a shiny new car; theyâ&#x20AC;&#x2122;re new and exciting, so I want it. It has some technology I use and love, and some I just donâ&#x20AC;&#x2122;t understand. The goal of this article is to analyze some concepts surrounding eClosings to help agents become more knowledgeable about the topic so they can participate in discussions confidently and effectively.

An eClosing contains four basic components: electronic signatures, electronic documents, electronic notarization and electronic recording. Electronic Signature An electronic sound, symbol or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record. When I go to the grocery store and tender a credit card at checkout, I use my finger or a stylus to sign on an electronic or LCD screen. The signature is not wet ink, but is similar to the electronically generated, cursively-written name on real estate contracts and disclosures intended to substitute for a wet signature by the signer. The signer pushes a button to sign the document and affirm they are adopting the script as their legal signature for purposes of the specific document. Because a signature has special evidentiary value in legal proceedings, issues surrounding electronic signatures involve purpose (why was the signature created), intent (did the signer want to create a signature) and authentication (does the signature 4

Agency Today | Issue 9

actually belong to the named individual). Electronic signatures are becoming common in real estate transactions, and many lenders are delivering initial disclosures for signature via eSignature platforms.

Electronic Document Retrievable document inscribed and stored in an electronic medium. Lenders have been delivering closing documents electronically for years, and some lenders are now solely using electronic documents for disclosures. Transitioning to electronic documents maintains the electronic format while attaching an electronic signature to the document. Issues surrounding electronic documents include: reliability of systems being used for signature, storage and protection of the document in the intended form; specific laws applicable to a transaction

requiring the document be in writing; and technology, laws and rules supporting the acceptance of these types of documents for recording. Two key statutes have established the validity of appropriately executed electronic documents: Electronic Signatures in Global and National Commerce Act (E-SIGN) 15 U.S.C. 7000,1 and the Uniform Electronic Transactions Act (UETA),2 a uniform act promulgated by the National Conference of Commissioners on Uniform State Laws (NCCUSL). E-SIGN is Federal; UETA is not, and as a model act, states have the option to adopt it in whole or in part. Most states have adopted UETA,3 and some have carve outs for real estate transactions. The two statutes, E-SIGN and UETA, give legal force and effect to electronic signatures in defined situations, providing that a contract may not be denied effect solely because it is in an electronic format or signed electronically. In addition, they define some of the important terms – like electronic signature. The statutes do not address the purpose of the signature, the intent of the signer, or the authentication of the signature. Nor do E-SIGN and UETA limit or supersede any requirement by a regulatory agency that records be filed in accordance with specified standards or formats; many recording offices still have regulations requiring a wet signature. Processes and technology also need to support a method of authenticating the signature back to the individual. Additionally, under E-SIGN, the consumer must affirmatively consent before electronic records can be used to provide information, which must be provided in writing by other law. Finally, neither E-SIGN nor UETA assure electronic transactions are valid absent expressed consent by the consumer.

Electronic Notarization The electronic version of traditional notarization needed to accomplish the same tasks. Tasks vary by state law, but are the basic roadmap of a notarial act. The notary: 1. Confirms the individual personally appearing to sign the electronic document is who they claim to be; 2. Witnesses the execution of the document or acknowledgment of the execution by the individual; 3. Certifies the document was properly executed by placing their notary’s signature and seal on the document; and 4. Stores information about the signer and execution in the notary’s official journal, if required by state law. Issues surrounding electronic notarizations involve state law recognition, acceptance of electronic documents for recording, the ability to securely store them, and the application of tamper-evident technology.

1 Library of Congress, Public Law 106–229 www.congress.gov/106/plaws/publ229/PLAW-106publ229.pdf 2 Uniform Electronic Transactions Act (1999) www.uniformlaws.org/shared/docs/electronic%20transactions/ueta_final_99.pdf 3 Uniform Law Commission www.uniformlaws.org/Act.aspx?title=Electronic%20Transactions%20Act

Remote notarization differs dramatically because there is no physical appearance by the individual before the notary; they may appear using other communication methods, including videoconference technology (think Skype or FaceTime). Remote notarization must, by its very nature, be electronic. For most states, remote notarization will be the lynchpin to get to a fully eClosing paradigm. One benefit of eClosings is that people in multiple or distant locations still have the ability to conveniently carry out their real estate transaction, but there are a few important issues surrounding remote notarization that must be addressed; one is parity. The E-SIGN law does not require one state to recognize a remote notary from another state, if the first state does not authorize remote notarization. Many states simply do not yet have adequate legislation in place. If not properly supported by legislation, a remote notarization undertaken in one state may not provide constructive notice to third parties, and may be subject to future attack in legal proceeding, including bankruptcy and/or foreclosure. This is a pivotal concern for all parties involved, not just lenders and title insurance underwriters. A successful challenge to the validity of a deed or mortgage, based on a remote acknowledgement, results in a failure of title for the holder of that interest. Another concern relates to disclosure. If a state does not require the document to reveal on its face that the acknowledgment has been carried out by remote means, we would have no way to know. As a result, First American Title would not be able to underwrite the risk of parity. Virginia was the first state to enact legislation supporting remote notarization, and is being heavily relied upon by some in the industry. However, the Virginia statute does not require the instrument disclose on its face that the acknowledgment was undertaken remotely. Equally important is the ability to sufficiently verify the identity of the signer and legal capacity to execute the document. If the person acknowledging the signature is not physically before the notary in the same location, there must be technology to properly verify signer identity, evaluate competency, create a record of the acknowledgment and conduct the notarization process in a secure setting. In 2017, the American Land Title Association (ALTA) and the national Mortgage Bankers Association (MBA) put forward the Remote Online Notarization4 model. The two trade associations worked with a variety of industry stakeholders to produce the following critical requirements: • Remote online notarization legislation should have a mandatory disclosure requirement in the notarial certificate, notifying third parties of the use of remote online notarization so that they can assess the legal sufficiency of the use. • Such legislation must have significant multi-factor authentication requirements the notary uses to analyze 4 Mortgage Bankers Association http://mba.org/RemoteOnlineNotarization

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CONTINUED: THE ECLOSING PHENOMENON

the signer’s government-issued credential and verify the signer’s authenticity; the notary must use technology that supports these tasks. Typically, this means responding correctly to out-of-wallet questions (information known to user, but obscure to most other persons), but could involve a biometric fingerprint. In addition, the legislation would contemplate a technology applying a tamperevident electronic seal. • The legislation should require a technologically sufficient audio-video recording of the notarial act. Important issues surround the need for definitional clarity such as: What does “in the presence of” really mean? Does that encompass via video-conference technology? Can the signer be anywhere in the world? Or, just the United States? A handful of states have enacted legislation specifically addressing and authorizing remote notarization. Vermont is one of the latest states to do so, but it is not completely straightforward.5 Vermont took an interesting approach and retained the traditional requirement that an individual appear personally before the notary public, but defined personal appearance to require the parties be in the same physical space or through a secure communication link using protocols and standards adopted by the Vermont Secretary of State. Assuming the necessary rulemaking is completed by the Secretary of State, this part of the law will go into effect July 1, 2019.

Even when technology and law meet on the issue, there will still be an ever-present need for the in-person service of our valued title agents. Some other states allowing remote notarization have heightened procedures for verifying the identity of the principal. Many states have laws that allow for acceptance of documents notarized legitimately in other states, but often do not speak to remote notarization. Relying on the language of UETA to support a remote online notarization overlooks decades of interpretation of a valid notarial act requiring the signer to be in the personal presence of the notary. Currently, legislation is pending in states representing over 60% of the U.S. population. We should be encouraging the enactment of consistent and 5 State of Vermont Legislature https://legislature.vermont.gov/assets/Documents/2018/Docs/ACTS/ACT160/ACT160%20As%20 Enacted.pdf

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uniform laws containing adequate disclosure and safeguards, like the MBA/ALTA Remote Online Notarization model which provides the framework for a reliable and predictable network to serve consumers and clients who need and/or want the convenience and flexibility of eClosings.

Electronic Recording Electronic recording is prevalent in three New England states. In jurisdictions not currently e-recording things may change, but, before that can happen, both recording offices and state legislators need to embrace some key concepts; the Uniform Real Property Electronic Recording Act (URPERA) is helpful here. URPERA is intended to give recording offices the legal authority to prepare for electronic recording. With fifty states, each with its own legislative structure surrounding recording, and over 3,000 recording offices across the country, the ability to accept electronic documents is both complex as well as important to the eClosing paradigm. Not all states/regions have adopted URPERA or are equally situated to handle electronic recordings; this will impact the prevalence of eClosings. For example, many jurisdictions utilizing electronic recording have legislation, regulatory requirements, or a practical technology conflict resulting in the need for deeds to be original in nature—even if recorded electronically. The notion that a native electronic document can physically be recorded, does not always replace the need for an original instrument with a wet signature.

Where are we with the concept of eClosings? From a technology standpoint, there are platforms for electronic document generation, execution, packaging, and distribution in addition to existing technology for electronic and remote notarization. But, the legislative infrastructure does not yet match up across the components. From a practical perspective, many of us are already participating in hybrid eClosings with some aspect of a real estate transaction being electronic. For example, in my home territory of New England, none of the states have legislation and functionality for a soup-to-nuts eClosing. Most of New England’s legal strictures require that deeds, and often mortgages or other instruments, be original, contain a wet signature and an in-person acknowledgment. In short, no matter the jurisdiction involved, not all transactions will be suited to an eClosing, not all parties to a transaction will be willing or able to participate in an electronic format, and not all recording offices will have the legal framework or willingness to accept and record native electronic documents. Regardless of legality and capability, willingness of the players involved is equally necessary. Even when technology and law meet on the issue, there will still be an ever-present need for the in-person service of our valued title agents.

Guide to eClosing & eSigning

Many types of documents need to be signed in a real estate transaction. A number of factors are driving the real estate industry to transition from traditional paper and wet-ink signings to electronic signatures on digital paperless documents. This is known as a digital closing or more commonly called an eClosing.

5 Benefits of eClosing

Speed

Convenience

Security

Eco-Friendly

Quality

Earlier document delivery.

More streamlined closing experience.

Quickly identify any altered documents.

Reduced use of paper.

Prevents missing signatures or documents.

Shorter signing appointments.

Review documents in advance and ask questions of the appropriate parties.

Shorter funding times.

Close from any location.*

Control who has access to private information.

Reduced carbon footprint of shipping and storing physical documents.

Improved accuracy and consistency. Automated data validation.

*Requires online notary. Not available in all states.

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Types of eSignatures Not all signatures are created equal. Here are some of the options used in electronic documents.

X Joan

X WET INK (SCANNED)

Smith

PL AIN TEX T

X SCRIPT FONT

DIGITAL CAPTURE

A New Layer of Security eSignature platforms apply a â&#x20AC;&#x153;tamper-evident sealâ&#x20AC;? to electronic documents. Any attempt to alter the documents will break the seal and expose that the documents have been changed.

Types of eClosings Beyond the technology, local laws, customs, and underwriting requirements will determine what types of eSignings are possible. These variations create different types of eClosings. When more types of closings become available, consumers will have more choices on how and where they will be able to complete their real estate transaction.

TRADITIONAL CLOSING

HYBRID eCLOSING

IN-PERSON eCLOSING

REMOTE NOTARY eCLOSING

All paper documents signed with wet ink.

Procedural documents and disclosures are electronically signed.

All documents are electronic.

Signed on laptop or tablet.

In-person notary.

Webcam notary.

Traditional ID verification.

New means of ID verification needed.

In-person notary. Traditional ID verification.

Wet ink signature on deed/mortgage and promissory note. In-person notary. Traditional ID verification.

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Types of Closing Documents that Require a Signature There are three main types of documents in a typical real estate closing. While many documents require a signature, only certain documents are notarized and recorded with the county.

Notarized Documents

Financial Documents

General Documents

Transfer Deed

Digital eNotes

Customer Disclosures

DeedEtc. of Trust or Mortgage

Lender’s Promissory Note

Procedural Documents

Power of Attorney

Etc.

Etc. Stored with the Title Company and Lender with Copies Sent to the Customer.

Notarized and Recorded with County Recorder’s office.

Archived in an eVault and Registered with MERS.

Making it Official

eVault and MERS®

Archive and Distribution

The transfer of property ownership needs to be recorded in the public register. This land recording system has protected property ownership in the United States for hundreds of years.

An Electronic Promissory Note (eNote) must be stored in an eVault, which establishes that eNote as the “authoritative” copy. The eNote is simultaneously registered with the MERS System to record who “owns” each note.

Some closing documents are stored with the settlement company and some with the lender. Buyers and sellers also receive copies of the documents.

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10 Agency Today | Issue 9

It’s Still About

The People The landscape of a real estate transaction has changed dramatically over the past 25 years. Listings, once inventoried in a physical book in a broker’s office, are now available to anyone, anytime on just about every broker’s website. The mortgage application, once done on a Smith Corona (Google that one, kids), can be accomplished using an app on your phone. Climb into the way-back machine and you’ll see that to evidence title, someone had to get into their Chevy Citation (likely without air conditioning, definitely without satellite radio) and drive to a courthouse to perform a title search using a pen and paper (gasp!). Today’s real estate industry headlines focus on all things tech and automation; Blockchain, eClosings, cyber fraud, lender portals, and outsourcing. You get the picture. The only thing we know for sure is it will take much less than 25 years to see the kind of technological advancement in our business that we saw in the last 25. Today, innovation evolves at a faster pace than ever before. As Thomas Friedman posits in Thank You for Being Late: An Optimist’s Guide to Thriving in the Age of Accelerations, technological advances are outpacing our ability to process them. In short, our brains need to catch up with our own innovations. This might send a shiver down the spine of those who fear that one day the real estate transaction might be executed using an app; that with a push of a button, brokerage, mortgage and title services will be ordered and performed by faceless AI bots without human interaction. Such a prognosis for our industry would be missing a key finding: while administrative tasks can and should be automated, real estate professionals are required to do the “Deep Work,” as Cal Newport calls it in his latest book by the same title. Sure, a seller

can list their property on their own, but can they negotiate objectively without bias with a potential buyer? A buyer can quickly find a dozen houses online and spend an entire Sunday at By: Derek M. Massey, Esq. open houses sans a real estate agent. VP, Massachusetts State But when they find the home they Agency Manager First American Title like, then what? Will they take on the largest financial transaction of their life without someone who knows the neighborhoods, the lifespan of a roof, and how to find a reputable inspector? The shiny new loan prequalification app may tell you that you CAN get into that loan product, but will it tell you if you SHOULD? When title comes back with a non-fatal yet material flaw, who is going to use reason-based risk management and decades of experience to make a decision that benefits the buyer, seller and lender? Even the most primitive scheduling software can put a closing on a calendar, but who will shepherd a volatile settlement to a close when the buyers aren’t getting along with the sellers – who we learn ten minutes before closing are going through a contentious divorce? Technology has absolutely improved real estate, and it will continue to at breakneck speed. Companies who embrace it and move with innovation (and not swim upstream against it) will reap the rewards. But what really separates the wheat from the chaff are the people. Relationships. Human connection. Professionals doing deep work. Companies who invest heavily in people, for things only people can do, will be the real estate service providers of choice now and in the future. It’s still, and always will be, about the people.

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Actually Recent headlines show the devastation caused by the eruption of the Kilauea volcano in Hawaii. As its 2100Â° lava slowly flows toward the Pacific Ocean, it incinerates everything in its path. Yet, while the lava destroys, it also creates. When it reaches the ocean, the lava cools and hardens creating new land and adding to the islandâ&#x20AC;&#x2122;s shoreline. By: Rachel Hable VP, Corporate Underwriting First American Title

When Kilauea erupted in 1960, it added 500 acres of new land to the island. Another 500 were added between 1983 and 2013, with an additional five acres added in 2016. Given our business, it might be interesting to know who owns this new land.

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The ownership of these so-called “lava extensions” was a case of first impression when it arose in a 1977 Hawaii Supreme Court case.1 State ex rel. Kobayashi v. Zimring2 provides a fascinating overview of the history of property ownership in Hawaii, with a discussion of accretion, avulsion, littoral access and the public trust doctrine. This case arose as a result of the 1955 volcanic eruption that destroyed the old seashore boundary, created a new boundary and added approximately 7.9 acres of new land in Kehena and Puna, Hawaii. Maurice and Molly Zimring purchased the abutting property in 1960 and believed that the newly created acreage was included in their purchase. The Zimrings paid taxes on the lava extension land and improved it over the years. Thus, it came as quite a surprise to the Zimrings when, in 1968, the State of Hawaii (“State”) served them with a notice to vacate the lava extension and initiated a quiet title action. The trial court (also called the circuit court) found in favor of the Zimrings, holding that the State failed to carry its burden of proof to establish its title in the land. The Supreme Court overturned this decision and found that the State had established its title in the lava extension and that it was the rightful owner. As I mentioned, this case covers a lot of ground, so I will give you a quick summary of the Supreme Court’s reasoning and then focus on four key takeaways (applicable even if you are not dealing with land created by “one of the most violent and spectacular geophysical processes known: a volcanic eruption and ensuing lava flow.”). The Supreme Court started with the general proposition that under Hawaiian property law, the land in its original state is public land and if it is not awarded or granted, such land remains in the public domain. The Court went on to state, “there is no indication that pursuant to Government grant, operation of common law, or Hawaiian usage, such land ever left public hands. Title to the land passed to the State from the federal government pursuant to the Admission Act.”

Takeaway No. 1 After the State filed its quiet title action, the Zimrings counterclaimed, claiming ownership of the land by adverse possession. Both the Circuit Court and the Supreme Court ruled against the Zimrings. As a general rule, a governmental entity cannot lose title to property by adverse possession. This can be an important consideration when we think about encroachments or boundary line disputes.

Takeaway No. 2 In a quiet title action, the burden of proof is on the 1 Sometimes the march of justice moves at the same speed as lava. The State initiated the quiet title action in 1968. 2 State ex rel. Kobayashi v. Zimring, 566 P.2d 725 (Haw. 1977)

party who initiated the action (usually referred to as the plaintiff). While there are nuances to this proposition under each state’s law, the idea is that the plaintiff has to prove to the court’s satisfaction that it holds title to the property. If the plaintiff fails to do so, the defendant does not have to make any showing. This is important in the event we have to initiate a quiet title action on behalf of one of our Insureds; we need to have a basis on which to assert property ownership. In this case, the State of Hawaii had to invoke the Constitution of 1840, King Kamehameha III, and the Admission Act of March 18, 1959, that dissolved the Territory of Hawaii and established Hawaii as the fiftieth state admitted to the Union, to establish its title to the land.

Takeaway No. 3 When the Court considered whether ownership of the land had passed to the Zimrings, it considered the common law doctrines of accretion and avulsion. Accretion “denotes the process by which the area of owned land is increased by the gradual deposit of soil due to the action of a bounding river, stream, lake, pond or tidal waters.” Avulsion generally refers to the sudden loss or addition of land resulting from the action of water. While not exactly the same as a lava flow, the Court felt these water doctrines were similar enough to consider, and they went into some depth about ownership of land that borders a body of water. Agents should be cautious when insuring land that abuts a body of water. Generally speaking, there are Schedule B exceptions that should appear in our reports/ commitments/policies when this is the case.

Takeaway No. 4 The Zimrings were conveyed land with metes and bounds legal descriptions that described one course as “along the high water mark.”3 While the majority opinion did not address this issue, the dissenting opinion provided an interesting discussion of the application of the common law doctrine of the construction of conveyances, i.e., in construing a legal description, to the extent that there is a conflict in the description of the parcel, natural monuments will control over distances and azimuths. The dissenting opinion states that the majority opinion is at odds with this established rule since it was relying upon the distances and azimuths (which described the parcel prior to the 1955 volcanic eruption), rather than the natural monument of the high water mark. 3 From the Circuit Court’s Findings of Fact: On August 31, 1959, Herbert Shipman executed a Deed to Francis Ruddle of Grants 4139 and 4140, describing the lands as bounded at the south, as follows: (a) Land Patent Grant No. 4139, "15. S. 45° 42' E. 82 ft. along Sec. 5 Lot 2, to mark + at sea bluff and along same line of (sic) high water mark," and "19. S. 23° 10' E. 240 ft. a little more or less to high water mark. Thence along high water mark to end of 5th (sic) course ..." (b) Land Patent Grant No. 4140, section 5 Lot 2, "S. 21° 41' E. 130 ft. more or less along Government land to high water mark. From initial point against the boundary runs: S. 45° 42' E. 82 ft. to rock marked + at sea bluff and along same line to high water mark. Thence along high water mark to end of Second course."

Agency Today | Issue 9

Anatomy of a Hack Cyber Crime In The Real Estate Industry

Agency Today | Issue 9

CLICK HERE

By: Joshua A. Luksberg VP, Connecticut State Manager First American Title

Dear Attorney. I am looking to retain your firm to handle a very important matter involving precious metals. Time is of the essence! Please review the attached materials to let me know if you may be willing to help. Millions of dollars are at stake!

Regarding claim 179.XC.5D. It is imperative that you immediately respond to the attached grievance matter involving you and your firm. Failure to respond in a timely fashion may result in the suspension or removal of your license to practice. Regarding the Contract. I have been referred to your company recently and need you to review the attached. Please review and advise if you are amenable to contracting with us. The purchase of this house needs to close within the month. I am currently overseas but I can send cash quickly and easily via wires. Please call ASAP! Dear Kind Sir and/or Kind Madame. I am overjoyed to inform you of your good fortune. You have been randomly selected to win a free Amazon Gift Card! Just CLICK HERE NOW to claim your prize! Ok, I think you get the point. I am sure many of you are even laughing, saying to yourself how silly these look. I am sure you have been sent hundreds, no, thousands of these emails in recent years, and of course, you never dreamed of clicking. Well guess what, people click. People click all the time. Some click by accident, some click because they are not paying attention, too busy to have taken the time to digest the actual email and see the red flags showing these are clearly phishing emails designed to do just what they ask you to do … CLICK! The hallmark of a phishing email, like the snippets I created above, is that they are extremely generic. Dear Attorney, Your Firm, Kind Sir, etc. Fraudsters don’t have time to create separate emails, so they generate one email and send it to hundreds of thousands of people at the exact same moment, looking for that one, maybe two, or even more recipients, that will in fact click.

SOMEBODY’S WATCHING ME So, what happens to those unlucky few who click? Does your computer explode? Maybe a ninja jumps out of your phone or computer to rob you? Oh, I got it, you are immediately told that someone has stolen your identity to file a false tax return, went on a $20,000 shopping spree, and took out a $600,000 mortgage in your name based upon a great credit report from Equifax. No, none of that actually happens, but you can be certain that something does happen. Someone is watching. It makes me think of the 1980’s hit song sung by Rockwell (yes,

I had to look that up), and more recently used in one of my favorite GEICO® commercials, I always feel like, “Somebody’s Watching Me.” Remember, the fraudster who just sent out the generic phishing email asking you to click, sends out thousands of these each day. They wait, and when someone clicks, they’re in! Picture someone sitting in front of hundreds of computer monitors, just watching real estate transactions, waiting for the opportune time to pounce. Even if you don’t personally click, if anyone of the people involved in your transaction clicks, the fraudster can see your emails. In a typical residential real estate transaction, there’s a buyer, seller, their attorneys and real estate agents, a mortgage broker and/or lender, and any involved staff who may have clicked. If any one of those parties is compromised, then emails from you to them can be viewed by the fraudster. Fraudsters are becoming more sophisticated each day; they know the end of each month is a very busy time for closings, especially on a Friday, and they know that everyone wants a fast closing. They know that when people rush, details are overlooked. So, they wait, and at just the perfect time, they strike.

THE DIVERSION Hello Julie (the actual name of your buyer). The cash to close payable by buyer at closing (balance of $175,000.00) has been requested this morning. This will enhance an early and smooth closing and a receipt for payment will be issued to you. I am busy this morning with closings. Please send me an email if you are able to do the wire transfer and I will send the wiring instructions back to you. Since the final CD is not ready, you will be paying the difference, which is the closing cost by cashier check at closing. Buyers funds for closing are asked to be wired a few days prior to closing to enable quick funding at closing. Please note that our closing policy requires funds over $5,000.00 to be remitted via WIRE TRANSFER ONLY. Sincerely, your attorney. Yes, that actually happened. This is practically verbatim from an email sent last month, just two days prior to an actual closing. The email was sent directly to the buyer purporting to be from her attorney. This is not a phishing email. This is a specific attack directly targeting the transaction. The email has accurate information regarding figures and dates. The attorney is busy with closings, creating an urgency level on the end of the buyer. The fraudster uses buzzwords, which if carefully read by an industry professional, don’t make sense, but this was not sent to the professional, it was sent to the buyer. When fraudsters use words like final CD, the goal is to create authenticity to the recipient. My favorite part about this email is that the fraudster didn’t actually attach the phony wiring instructions, as we have seen so many times in the past. Here, the fraudster asks the intended victim to send an email first. To me, this is ingenious and their way of creating a link between the two. No bad actor Agency Today | Issue 9

CONTINUED: ANATOMY OF A HACK would ask for an email first confirming a wire can be done, right? Seems like a small unnecessary step, but that little tweak is powerful and goes a long way when convincing a victim to think the email is legitimate. Lastly, the fraudster cut and pasted the actual email signature of the attorney representing the buyer. The look and feel of this email was extremely authentic. Further, consider the fact that in the world of residential real estate, it is very possible this buyer had never even met their attorney. They may have exchanged a phone call, and a couple emails, but that was probably at least a month or two ago. The last thing the victim can remember is the attorney saying they would be in touch as they got closer to closing day with some figures, which is exactly what the fraudster did. The only part of the email that wasn’t authentic was the sender. For example, the real email address may be ctattorney@relaw.com, but the fraudulent email comes from ctattorney@relaw. outlook.com. Do you think a buyer, who has never met you, has spoken on the phone with you once, and emailed with you twice 45 days ago will remember whether or not your email address has “outlook” in it? Especially when the body of the email is precisely on point, and the signature block is in fact yours. You were never hacked, you never clicked or opened anything. You did nothing wrong. In fact, you have the most sophisticated software platform in the industry. However, your favorite real estate agent, who for whatever reason still uses an AOL email account, gave their phone to their child on a long car ride. During the ride, an email pops up on the screen, and in a rush to get back to their game, they click and swipe. That is how it all happened. One innocent swipe and the fraudster is in. You did nothing wrong, but in the victim’s mind the email came from you. What do you say? What can you do? Better yet, how do we ensure this never happens in the first place?

PREVENTION As a kid, one of my favorite cartoons was GI Joe. I can remember at the end of each episode he’d say, “knowing is half the battle.” Simple message, but a good one, especially in the world of cyber fraud and cybercrime. We all need to be prepared, and we should all be a little paranoid. Carefully review anything that comes across your desk or into your email, don’t just trust the information given to you. Your company is only as good as its weakest link. Everyone should be trained and 16

Agency Today | Issue 9

aware of schemes and frauds being perpetrated in the market. Putting strict policies and procedures into place when it comes to handling of Non-public Personal Information (NPI), wire confirmation, email correspondence, and client communications can go a long way in preventing your operation from becoming a victim. In particular, client communication is something to delve deeper into. Since fraudsters are reaching out directly to consumers who more than likely have never met you in person, and only corresponded once or twice via email or phone, what can you do? First, a retainer agreement should be in place outlining the scope of representation, including a specific section stating that you and/or your firm will never reach out via email with a wire request and/or a change in wire instructions. I also highly recommend having an actual conversation by phone or in person as well. The first time you meet or speak with the borrower educate them about would-be fraudsters and their known methods of attack. An ounce of prevention is worth a pound of cure. Consider implementing a block on all international wires with your bank and contact your malpractice insurance carrier to see if there’s a social engineering exception or exclusion on your policy. Many carriers are now expressly excluding coverage for issues where your firm was tricked via email. If your policy contains such an exception, you may want to consider adding a Social Engineering Fraud endorsement to the policy, which would provide coverage. Another consideration is Cyber Liability Insurance which provides coverage if you’re actually hacked and Commercial Crime Insurance in case your firm is knowingly or unknowingly part of a crime. This article may seem scary, but cyber fraud is an extremely dangerous, pervasive, and continuing problem in our industry. As technology advances and the the business world continues its effort to do everything faster, the opportunities for fraud and theft will continue to rise. Staying one step ahead of the fraudsters will require all of us to remain diligent and paranoid, not taking anything for granted. Established policies and procedures can prevent most fraudster attempts when consistently followed. Working together as an industry, we can help stop would-be fraudsters in their tracks.

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#WhatYouNeedtoKnow Does the # symbol make you think of your telephone key pad, or childhood games of Tic-Tac-Toe? Oh, how times have changed. These “hashtag” symbols are now used to connect people, topics, conversations and more online. The use of hashtag symbols in front of a word on social media as a way to connect one person’s post to another post began about ten years ago. Want to see sunsets around the world? Try searching #Sunset on any social media platform.

By: Jennifer Wooten Sr. Project Coordinator Agency Division Marketing First American Title

There are many advantages to using hashtags in business. If your agency is looking to spread the word about a #charity or #event you’re sponsoring, others will find the post when you place the hashtag symbol in front of the word. If you are having a an invitation-only event and prefer that the general public can’t easily come across your post, make your hashtag company and event specific. This is a great way to track a conversation that is uniquely yours.

#Tips • Keep it #short and easy to remember; #ABCTitle vs #ABCTitleandEscrowCompanyLLC • Be #unique to separate your event from others; #ABCFamilyPicnic instead of #FamilyPicnic

• Consider multiple hashtags to connect topics; “Contact #ABCTitle to find out how #TitleInsurance could save your home.” • Use #capitalization when appropriate; #SmithJonesTitle vs. #smithjonestitle

Becoming proficient in the use of the social hashtag can benefit business growth and promote awareness within the community. While the symbol has held many meanings, its use to describe a game or button on your phone is no longer the first thing that comes to mind. For the foreseeable future, hashtags are #HereToStay.

AgentNet® Search Product (ASP) First American is pleased to announce the AgentNet Search Product (ASP), is now available! More Control and Flexibility • AgentNet Search Product, ASP, replaces the Eagle Search Product - allowing you to more quickly import and review commitment data • Reduces clicks and saves time • ASP produces a preliminary commitment for your examination and edit in PDF, Word, and XML formats adding ease of viewing and importing • Access supporting documents directly in your title and production system, or through AgentNet • No expiration of links or documents

Save Time • Order ASP directly through AgentNet • No need to work across multiple systems • Fully integrated with leading software platforms including SoftPro®, Closers’ Choice, ResWare™ and E-Closing • Eliminates the need to download and then upload data

Increase Accuracy • Reduce errors due to rekeying of data • Automatic population of CPL, eJacket and Back Title

NOT AVAILABLE IN ALL STATES. The Service Order feature is intended to replace all previous service order mechanisms such as FASTWeb and WebTrack.

Agency Today | Issue 9

FRAUD RED FLAGS

20 Agency Today | Issue 9

Fraud is generally defined as false representations of facts to induce another to rely on them, with the intention to deceive. The various schemes invented by fraudsters are often difficult to navigate. Some involve cyber fraud, email hacking or other information security issues. Awareness, vigilance and due diligence are key to detect and avoid fraud traps. While your work as a settlement agent is done outside your relationship with First American, we think you might find the following information helpful in your business. Closing/Settlement agents are entrusted with Non-Public Personal Information (NPI) and should be diligent in protecting that information. By taking some simple security measures, you can help reduce exposure to threats and loss of sensitive information. • Improve your network security by avoiding public Wi-Fi • Use secure email or a secure portal when sending when traveling or working remotely. messages or attachments containing NPI. • Keep software, including security patches, up to date. • Be aware of possible Phishing emails by paying special attention before you click.

If you spot any of the following Red Flags, your transaction may be at risk and require greater scrutiny.

Distressed Properties/Foreclosure Issues

Closing Fraud Schemes

Properties involved in financial distress or mortgage defaults are often targeted by fraudsters.

Free-and-clear properties are a target for fraudsters because of the obvious equity with no outstanding mortgage. Elder principals are also at a higher risk of abuse, as they may not be as transaction and tech savvy. In some cases, elder principals may be unaware that their property is being transferred.

RED FLAGS: • Recently recorded Assignment of Mortgage/Security Deed/Deed of Trust. • Recently recorded Release, Reconveyance, Trustee Deed, Substitution of Trustee, or other foreclosure document. • Request to rush the opening of a file and/or closing of a transaction.

Wire Fraud Fraudsters use compromised email accounts to deceive financial institutions, and their customers, in order to misappropriate funds through unauthorized wire transfers. RED FLAGS: • Changes to wiring instructions (language, timing, amounts, etc.). • Wire account name payee differs from the principals on the transaction. • Request to wire funds to foreign or unknown bank. • Instructions sent by email, especially when sent late in the transaction process, when verification would be more difficult – at month end, for example. • Instructions marked as rush, urgent or secret.

RED FLAGS: • Property has no mortgage to be paid. • Seller(s) positioned to receive large cash out. • Sales price on non-owner occupied property is too good to be true. • Purchase contract has confusing counter offers, amendments or unusual terms. • Property is immediately being transferred to another party after close of escrow. • Use of a Power of Attorney (POA) to sign documents. • You are unable to speak to, or communicate directly with, a principal at the request of another party (the principal is “out of the County” or “very busy”). • Chain of title reveals recent purchase, or flip, indicating a sale price significantly different from the previous and/or current transaction. • Recent transfer of title for no consideration. • Parties involved are demanding a rush closing. • Unexplained disbursements from seller proceeds. (Payments or repairs with no bill or documentation provided). • Sales/Loan proceeds are paid to someone other than the borrower(s) or seller(s) of record. • Principal appears disoriented, demonstrates a lack of understanding or unable/not allowed to speak on their own behalf. • Change of contact and/or authorized representative. • Holder of POA requests funds be disbursed to him/her.

Agency Today | Issue 9 21

ALTA Rapid Response Plan for

Wire Fraud Incidents Time is of the essence – every second and minute counts. Contact banks, transaction parties, and law enforcement immediately upon discovery. STEP 1: Alert company management and your internal wire fraud response team. Contact your team according to a pre-arranged plan (group email; group text): • Owner/Manager • Accounting/Finance/ Treasurer

• IT/IT Security • Legal Counsel

STEP 2: Report Fraudulent Wire Transfers to the Sending and Receiving Banks • Contact the sending bank’s fraud department and request that a recall of the wire be sent to the receiving bank because of fraud. Provide the details for the wire. • Ask the sending bank to initiate the FBI’s Financial Fraud Kill Chain if the amount of the wire transfer is $50,000 or above; the wire transfer is international; a SWIFT recall notice has been initiated; and the wire transfer has occurred within the last 72 hours. • Also call the receiving bank’s fraud department to notify them that you have requested a recall of the wire because of fraud. Provide the details for the wire and request that the account be frozen. • If a client or consumer was a victim and your bank/accounts were not directly involved, your client or customer will need to contact the bank themselves but you may have helpful information to share, too. Coordinate quickly!

STEP 3: Report Fraudulent Wire Transfers and Attempts to Law Enforcement • Local Police/Sheriff www.policeone.com/law-enforcement-directory • FBI Field Office www.fbi.gov/contact-us/field-offices • Secret Service www.secretservice.gov/contact/field-offices

STEP 4: Call the sending bank again to confirm that the recall request has been processed STEP 5: Inform the parties to the transaction Contact buyer, seller, real estate agents, broker, attorneys, underwriter, notary, etc., using known, trusted, phone numbers for verbal verification. Reprinted with permission of the American Land Title Association.

22 Agency Today | Issue 9

If you’re unsure about what to say, here’s a sample: “There appears to have been [attempted] wire fraud associated with this transaction. We recommend that you review your email security and update passwords and take any other appropriate security measures immediately. For the remainder of this transaction, all communication will occur using known, trusted, telephone numbers.”

STEP 6: Review your Incident Response Plan Determine if you need to update passwords, secure hardware, and review email logs to determine how and when email accounts were accessed.

STEP 7: Consider contacting your insurance carrier(s) and outside legal counsel STEP 8: If funds were wired out of the U.S., hire an attorney in that country to help recover funds STEP 9: Document your response using a Response Worksheet • Customize the ALTA Rapid Response Plan and Worksheet for Wire Fraud Incidents, or create your own • Assign each step to an appropriate person/entity • Track progress through to completion or resolution • Retain Response Worksheet for future reference/update

STEP 10: File a complaint with the FBI’s Internet Crime Complaint Center (IC3) Visit www.ic3.gov and provide the following information: • Victim’s name, address, telephone, and email • Financial transaction information (e.g., account information, transaction date and amount, who received the money) • Subject’s name, address, telephone, email, website, and IP address • Specific details on how you were victimized • For Business Email Compromise (BEC) events, copy email header(s) (www.alta.org/file.cfm?name=HowToCopyEmailHeaders) • Any other relevant information that is necessary to support the claimant

Wire Fraud Incident

Response Worksheet Date/Time of Incident:

Date/Time Incident was Discovered:

Incident Discovered By:

Amount:

Transaction Affected (File Number):

Client/Parties Affected:

Systems/Devices Affected:

Response Coordinator:

Step

Task

Assigned To

STEP 1 Alert Company Management Notes:

STEP 2 Report to Sending and Receiving Banks Notes:

STEP 3 Report to Law Enforcement Notes:

STEP 4 Confirm recall request was processed by Sending Bank Notes:

STEP 5 Inform clients/parties affected Notes:

STEP 6 Review Incident Response Plan for next actions Notes:

STEP 7 Contact insurance carrier(s) and legal counsel Notes:

STEP 8 Hire counsel in country where funds were wired Notes:

STEP 9 Document your response Notes:

STEP 10 File a complaint with the FBI Notes:

Agency Today | Issue 9 23

Affidavits Indemnities

24 Agency Today | Issue 9

The customer insists on modifying your standard form of affidavit and indemnity to add knowledge qualiﬁers or an automatic termination clause.

What Are Affidavits and Why Do We Require Them? An affidavit is a document that contains a representation of facts, given under oath, of a person known as the “affiant.” The representations made in affidavits provide vital information, generally not available in the Public Records, upon which to base our underwriting decisions. Our standard forms include indemnification provisions by which an indemnitor, who may or may not be the affiant, agrees to indemnify (protect) First American against losses arising out of any false statements in the affidavit. This provides a direct contractual mechanism to recoup loss suffered by our reliance on the affidavit.

gain more confidence in the truth of the statements. (iii) Can you verify the representations in the affidavit through other means, such as a site inspection, survey, zoning report, Google search, etc. (iv) What do you know about the seller/owner? How long have they been in title? Are they trustworthy? (v) What is the use, ownership, or structure of the deal? What coverage is based on the representations in the affidavit?

Termination Clauses Sometimes referred to as “sunset provisions”, these clauses set a termination date for the obligations of the indemnitor.

Knowledge Qualifiers

Are Termination Clauses Acceptable?

The affiant should have personal knowledge of the facts stated in the affidavit, either because that person is knowledgeable about the day-to-day operations of the property or because he or she has consulted with someone who is. Without this knowledge, we cannot justifiably rely on the affidavit to provide coverage for off-record matters. When representations in the affidavit are limited “to the best of my knowledge”, “to my actual, current knowledge” or, “ to the best of my knowledge with no duty to investigate”, it undermines the reliability of the representations and suggests that the affiant may not have the requisite knowledge to make a definitive representation.

The protection of the indemnity should last as long as the policy risk, but there may be legitimate reasons for a shorter term. You may agree to allow a termination clause if the requested term is reasonable for the risk and if it addresses any continuing risk following the termination.

Are Knowledge Qualifiers Acceptable? Generally, knowledge qualifiers are unacceptable. If the customer insists on knowledge qualifiers, you may agree to them only if you are confident that the representations in the affidavit are true. Consider the following in determining the reliability of the representations: (i) What is the requested knowledge qualifier? For example, in some states, “to the best of my knowledge” may be better than “to the best of my knowledge with no duty to investigate”. Perhaps the affiant would agree to limit its qualifier to “no duty to investigate with any person or source outside of the Company” or, if there is an independent property manager with requisite knowledge, “no duty to investigate with any person or source except Property Manager”? (ii) Does the affidavit state that the affiant is familiar with the condition, operation, maintenance and use of the property and records relating to these matters? If so, we may

Reasonable Term When determining the reasonableness of the term, consider the risk. For example, if the indemnity is for the recording gap, what is the gap in that particular jurisdiction? If it is for mechanics’ lien risk, what is the lien period in that state? How quickly can we learn that we are safe from these risks?

Continuing Risk The termination clause must not terminate the indemnitor’s obligations with respect to issues arising before termination. For example, a termination clause that reads: “The indemnity shall expire 36 months after the issuance of the policy” is unacceptable unless qualiﬁed with a phrase like, “… provided that there are no unresolved claim(s) regarding matter(s) for which the Company has the obligation to defend or indemnify its Insured, and Indemnitor has no remaining obligations under this Indemniﬁcation.”

Seek Underwriting Assistance These can be challenging issues. Contact your First American Title underwriter for assistance with this analysis and be sure to obtain proper underwriting approval for these types of modiﬁcations.

Agency Today | Issue 9 25

FIRST AMERICAN TITLE

AGENT ADVANTAGE Put Our Advantage To Work For You First American Title Agent Advantage brings together a unique combination of services and resources to help you maximize operational efficiency and compliant growth. Detail-oriented experts can help you manage standardized processes in an effort to make sure your residential and commercial transactions closings stay on track.

TITLE PRODUCTION SERVICES Residential and Commercial • • • • •

Single Source for Search Products Nationwide Preliminary Title Examination Policy Typing Centralized Customer Service Team Curative Title Solutions (WHERE PERMITTED) – Identifying delinquent taxes and arranging for payment of seriously delinquent taxes – Identifying and preparing assignments needed to complete title chain – Resolving problems regarding improper transfers of title – Additional services will be considered upon request

ESCROW SERVICES • Full Settlement Services – Provided in accordance with state-specific underwriting standards and regulatory requirements – Proactive communication and personalized customer service

• Settlement Statement and Closing Disclosure (CD) Preparation • Mobile Notaries available nationwide with centralized scheduling and management • Full Disbursement Services – Available in all 50 states and the District of Columbia – Reduced cyber security/wire fraud risk – Disbursement in accordance with First American’s standards

• Recording – Comprehensive review to confirm state and county-specific requirements prior to submission – Tracking of individual documents as submitted – Send final documents to lender and borrower

BANKING SOLUTIONS First American is the only title insurance underwriter that owns a federally chartered bank. First American Trust, FSB is regulated by the Office of the Comptroller of the Currency, a division of the U.S. Treasury.

Depository Services • Business Checking, IOLTA, Savings, and Time Deposits • Remote Deposit Capture

• Positive Pay • Electronic Funds Transfers

Automation • Wires – Send/receive from your accounting system – Accounting system disbursement becomes the transaction at the bank – Obtain payment details without logging into a separate bank application

• Savings Accounts

• Check Images – Obtain deposited and paid check images within your accounting system

• Reconciliation – Daily reconciliation data file with enhanced transaction information for a more precise reconciliation of checking and savings accounts

– Open/Close/Deposit/Withdrawal accounts from your accounting system – View interest rates and daily accrued interest

Contact your First American Title representative to learn more or tailor a solution to help your agency grow. w w w.firstam.com/agency 26 Agency Today | Issue 9

Billions

$6.2 $5.7

$5.8B

REVENUE CAGR: 7.1%

$5.2

$5.4B

$4.7 $4.2 $3.7

$3.8B

INVESTMENTS CAGR: 12.6%

$3.2 $2.7

$2.6B

$2.2

2011

2012

2013

2014

2015

2016

2017

“The auditors are here. Are we ready?”

Being out of compliance can disrupt operations and end careers. Rely on experts to help you stay current on compliance requirements and prepare you for that moment when the auditors arrive. We have the knowledge, experience and resources to prepare you. We’ve been doing this for 40 years and have serviced over $31 trillion in transaction dollars. We are the premier trust accounting service. You can relax. We’ll get you ready.

You’re ready.

Ready

TrustLink.Support@firstam.com 800.767.7833 www.trustlinkservices.com

TrustLink, a division of First American Professional Real Estate Services, Inc., makes no express or implied warranty respecting the information presented and assume no responsibility for errors or omissions. TrustLink is a trademark of First American Financial Corporation and/or its affiliates. ©2018 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE:FAF

Buzz Tech and Innovation

Lingo Reprinted with permission from the American Land Title Association

Blockchain

Bitcoin

A shared ledger for recording the history of transactions, which are linked and secured using cryptography. One explanation is to think of blockchain as Google Docs. Prior to Google Docs, if you wanted collaboration on a project in Microsoft Word, you had to email the file to everyone and ask them to edit it. Then, they would make edits, save the file and email it back.

A type of digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.

Cryptocurrency Any kind of peer-to-peer digital money powered by the blockchain technology. Since Bitcoin’s appearance in 2009, hundreds of new cryptocurrencies have been created, all of which offer different advantages and disadvantages.

Decentralization

Bitcoin Mining With Bitcoin, miners use special software to solve math problems and are issued a certain number of Bitcoins in exchange.

Immutability Unlike electronic flat transactions, Bitcoin transactions cannot be reversed. This is because there is no central “adjudicator” that can return the money.

An important characteristic of blockchain and Bitcoin is that the systems are decentralized. No single institution controls the Bitcoin network. It is maintained by a group of volunteer coders and run by an open network of computers around the world.

Divisibility

Smart Contract

Permissioned Blockchain

Self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code to digitally facilitate, verify or enforce the negotiation or performance of a contract.

Restricts who has rights to validate the block transactions. A permissioned blockchain may also restrict access to those who can create smart contracts.

Fiat System

In this type of blockchain, anyone can join the network, participate in the process of block verification to create consensus and create smart contracts. A good example of permissionless blockchain is the Bitcoin and Ethereum blockchains, where any user can join the network and start mining.

A type of currency based on a government’s mandate that the paper currency it prints is legal tender for making financial transactions. Legal tender means that the money is backed by the full faith and credit of the government that issues it. The U.S. dollar and just about every other national currency are fiat systems.

The smallest unit of a bitcoin is called a satoshi. It is one hundred millionth of a bitcoin (0.00000001)—at today’s prices, about one hundredth of a cent.

Permissionless Blockchain

Agency Today | Issue 9 29

October is Breast Cancer Awareness Month, a worldwide annual campaign that aims to raise awareness about the disease and raise funds for research into its cause, prevention, diagnosis, treatment and cure. As part of this annual initiative, First American employees actively participate in nationwide breast cancer walks and fundraising activities throughout the year. In addition to the funds raised and the goodwill created, employees are able to make a personal connection to those in need and have a genuine impact on their local communities. First American has a long history of giving back to the communities we live and work in, which is rooted in the rich philanthropic legacy of the Company’s founders, the Kennedy family. Throughout the Company and across the country, our employees are engaged in fundraisers, food drives, volunteer activities, home builds and charity walks.

First American is a proud participant and sponsor of the following Susan G. Komen Race for the Cure® and American Cancer Society Making Strides Against Breast Cancer® events: Event

Location(s)

Date

American Cancer Society Making Strides Against Breast Cancer®

Cleveland, OH

October 6, 2018

DuPage County, IL

October 7, 2018

Walnut Creek, CA

October 7, 2018

Los Angeles, CA | Tulsa, OK

October 13, 2018

Central Park, NY | Rochester, NY | Oregon/SW Washington

October 14, 2018

Indianapolis, IN | North Texas

October 20, 2018

Atlanta, GA | Oklahoma City, OK | Phoenix, AZ San Francisco, CA | Silicon Valley, CA | Minneapolis, MN

October 27, 2018

Susan G. Komen Race for the Cure®

Houston, TX

October 6, 2018

www.komen.org/RaceForTheCure

Omaha, NE

October 7, 2018

www.makingstrides.acsevents.org

30 Agency Today | Issue 9

Agency Office Directory

July 13-14, 2018 | Blaine to Langley, WA The Caring Eagles, a team of 12 First American runners, participated in the 200-mile Ragnar Northwest Passage relay race, partnering with the American Cancer Society ® to raise money for breast cancer research and patient services nationwide.

October 2017 | Cleveland, OH | American Cancer Society ® Making Strides for Breast Cancer Walk Employees also raised over $2,000 through various office activities, such as office bingo, a chili cookoff and dress-down Fridays.

October 2017 | Boston, OH | American Cancer Society ® Making Strides for Breast Cancer Walk

State Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming

Phone 205.879.1818 206.336.0736 602.685.7085 901.821.6500 714.250.7426 303.305.3358 860.727.9908 302.855.2120 877.798.7058 404.250.1604 808.206.8420 206.336.0736 866.213.4920 800.999.1176 402.697.4646 913.681.0600 502.425.7200 504.588.9252 207.774.6884 443.741.4540 617.345.0088 800.399.3003 763.416.2093 601.366.1222 816.622.3120 206.336.0736 402.697.4646 702.855.0837 603.227.9210 609.528.6860 505.881.3300 212.381.6600 336.668.7233 763.416.2093 614.310.8097 405.706.2008 206.336.0736 610.265.8440 401.434.1000 803.731.4409 763.416.2093 615.771.9141 281.588.2200 801.316.0600 802.764.3065 703.480.9500 206.336.0736 304.736.1111 608.286.3202 303.305.3358

National Agency Division: 866.568.0403 Agency Service Center: 866.701.3361 agencysupport@firstam.com

Agency Today | Issue 9 31

AGENT SPOTLIGHT SUSAN HIGGINS CO-OWNER

Western Illinois Title Company 204 East Main Street, Biggsville, IL 61418 (309) 734-3582 higgins@westernillinoistitle.com www.westernillinoistitle.com

Q What was your first job in the title industry and what are some of your most significant career accomplishments? A My first accomplishment was my initial foray into the title industry. I was a junior high science teacher of 20 years when the parents of two students asked if I would consider leaving the teaching profession to work in an industry where work ethic is rewarded. They also approached Pat Coker, owner of Terrill Title Company in Macomb, Illinois, to see if she had an interest in helping launch Western Illinois Title Company in Henderson County. In 2000, Pat and I began to build Western Illinois Title Company from the “ground up” with our first office in Biggsville, Illinois, a town of 350 people, then expanded to Monmouth in 2008. Working with First American Title, we were given the opportunity to acquire offices in Galesburg and Cambridge, Illinois. Later, in 2013, we purchased a title company in Monmouth, Illinois, giving us the footprint we currently have in West Central Illinois. Q What do you see as the next great opportunity facing the title industry? A Jimmy Dean once said, “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” Title professionals are consistently adjusting their sails to meet the expectations of clients, lenders and companies providing ancillary services who want products 32 Agency Today | Issue 9

to be easy, fast and digital. It is essential we take a pivotal role as pioneers in this want-it-now environment, holding to our standards of accuracy and proficiency in both title work and closings, while protecting the personal information of all clients. This feat can be accomplished by working with our lenders, real estate agents, underwriters, and professional organizations to build a working platform that benefits everyone. Given the ever-changing landscape of our industry, it seems reasonable that the current day-today operations of title offices will barely be recognizable when looking back a decade from now. Q Can you tell us about your company culture and the role it plays in your day-to-day operations? A Western Illinois Title Company is a family-owned business that values employees above all other aspects of the company – family comes first! The goal is to treat those who work for us, as we would want to be treated. We love the opportunity to reward our employees with additional paid time off around holidays and team-building activities. Every April we have a day-long celebration of Administrative Professionals Day, and we have a massage therapist go to our office locations quarterly to give 10-minute chair massages to help reduce the stress this profession can deliver. Education is very important in our company, and we stress the importance of all employees attaining the Illinois Title Professional (ITP) or Illinois Escrow Professional (IEP) designation through a series of classes offered by the Illinois Land Title Association (ILTA). In Illinois, we do not have licensing through the state, so it becomes imperative to stress the need for continuing education every year. Interaction with others in our industry, outside of our company, is addressed by having employees attend the annual ILTA convention. First American Title also provides educational opportunities and ALTA is a fabulous resource we utilize to keep current on industry trends.

Q What was your first job in the title industry and what are some of your most significant career accomplishments?

Partners Yitz Magence (L) / Craig Gilmartin (R)

YITZ MAGENCE PARTNER

Gilmartin Magence, LLP 376 Boylston Street Boston, MA 02116 (617) 375-9000 yitz@gmlawllp.com www.gmlawllp.com

A I moved to the Boston area in 1981, after graduating from Washington University Law School. I only knew one person in the area, had no job or living arrangements lined up, but knew I wanted to live in Boston after visiting during law school. I started as a solo practitioner, explored all types of law, quickly gravitated to specializing in real estate law, and now I am a partner in a 16-attorney real estate boutique firm. Real estate—both commercial and residential—is our sole field of practice and our firm represents buyers, sellers, developers and lenders. Among our most significant accomplishments is our involvement in large condominium projects springing up all over the metro Boston area. Also, a partner in the firm is on the board of the Real Estate Bar Association, influential in deciding and drafting title and practice standards governing real estate transactions in Massachusetts. Q What do you see as the next great opportunity facing the title industry?

proverbial single family home with a white picket fence. One look at the Boston skyline and you’ll see evidence of this growing trend. With the increase of millennials in the market, comes a concurrent need for increased technology to service this generation; they grew up with technology and are accustomed to using it. The challenge and opportunity for the title industry is continuous technology improvement and increasing integration between the title insurance company, agent and lender to make the process more efficient. Q Can you tell us about your company culture and the role it plays in your day-to-day operations? A Our firm motto encompasses our firm culture: Knowledge. Service. Results. We pride ourselves on having the knowledge and expertise to handle all real estate-related matters, whether simple or complicated. We treat everyone with respect and fully understand that we are a service business; those aspects are taken to heart and are embedded in our culture. The combination of expertise and exemplary service is the foundation of our success.

A Millennials entering the real estate market are gravitating to condominiums, rather than the

Q What was your first job in the title industry and what are some of your most significant career accomplishments?

TODD LEWIS PRESIDENT

Truman Title, Inc. 120 W 5th St Sedalia, MO 65301 (660) 620-1826 tlewis@trumantitle.com

A I began in January 1994, as a third-generation title insurer benefiting from the collective years of knowledge handed down by my father and grandfather. My first job was the manager of our Saline County branch in Marshall, Missouri; I later purchased that branch from my father in 2004. In 2008, I merged offices with my brother, Drew Lewis, and we now have locations in Sedalia, Marshall, Warrensburg, Lexington and Higginsville, Missouri. I have served on the board of the Missouri Land Title Association (MLTA) in several capacities, received the MLTA Young Title Professional Award in 2001 and have taught at the annual MLTA Title School. Q What do you see as the next great opportunity facing the title industry? A The digitizing of the records, most notably the rise of electronic signatures and electronic recordings. This technology opens doors for providing remote closings, remote notary

signatures, digital loan closings, transaction-related matters. Along opportunities comes the risk of abuse, which is only heightened in age.

and other with these fraud and this digital

Q What steps are you taking to recruit and retain exceptional employees? A Having a small-town background, we don’t get many opportunities to recruit individuals with a great deal of industry experience. Training has become our most valuable tool since most of our employees have never worked in the title business before joining our team. We try to be flexible with employee schedules and provide a fun work environment to help relieve the day-to-day stress they face. These fast-paced jobs come with high expectations, and our employees understand they are doing important work that can make a difference in the customer’s ability to purchase or refinance a home in a timely manner.

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AGENT SPOTLIGHT

CONTINUED

Q What was your first job in the title industry and what are some of your most significant career accomplishments?

JIM PENDER

OWNER, PRESIDENT & GENERAL LEGAL COUNSEL First National Title Company 415 N. McKinley Street Suite 1200 Little Rock, AR 72205

A My first job in the title industry was as an attorney, closing commercial deals for an Arkansas title company. I would line up folders of documents to be signed and due diligence items on the closing list around the 30’ conference table. When I started my title agency, the industry experts I hired taught me that closing residential transactions were often more meticulous than the large commercial deals. My most significant career accomplishment is a work in progress. First National Title Company has grown from four offices in 2011 to 19 offices, all in Arkansas, with almost 190 employees. We are an old-fashioned, independent title agency and have title examiners with local knowledge in each local office. The cost of compliance with regulations and competitive pressures are forcing the “Mom and Pop” shops I love so much to consolidate. Accounting and administrative overhead are now distributed over 19 offices instead of four. We have started a training school to teach our employees how to index our title plants and have completed three classes with 15 employees – not counting the indexers and title examiners from around the state who have also trained there. Two of our 15 indexers have become licensed title examiners. In my presentations to real estate professionals, I proudly state how we have reversed a national trend to bring these jobs back to America and Arkansas. My speeches usually put people to sleep, but this comment produces standing ovations!

(501) 221-0101 jpender@firstnationaltitle.net www.firstnationaltitle.net

Q What do you see as the next great opportunity facing the title industry? A More consolidation and technology! To remain competitive in the digital world, we have invested heavily in closing and title plant software, title plant databases, enhanced data

34 Agency Today | Issue 9

pipelines, VoIP phones, Skype for business, computers, copiers and servers. However, the most important ingredient to our success, both in the past and the future, is employing good people. In most of our local communities, the customers have no idea who I am or understand the soul of First National; they choose our company because of the local title agent or closer they know and trust. When I purchase a title agency, my greatest concern is retaining the local industry veterans to run the title agency, and I do all I can to encourage them to stay. I have learned, if your people are strong, you don’t need to spend a penny on marketing. First National has 190 marketing people who also have the ability to close deals and examine title. Marketing has a shelf life, but relationships last a lifetime. Q Can you tell us about your company culture and the role it plays in your day-to-day operations? A In 2004, I persuaded David Harrison, a fraternity brother, great attorney and former banker, to become a partner at First National. He has an uncanny ability to walk into any restaurant across the state, know half the patrons, name three of their cousins and the town they call home; most importantly, everyone likes and trusts David. He is skilled at drafting legal documents on his iPhone while attending Razorback sporting events. A veteran of multiple bank mergers, David helps me remember the importance of good people and that how we do business in Little Rock is not necessarily the best method in Fayetteville or El Dorado. Rules are necessary for any organization, but allowing employees to develop community-specific, solid business practices has been an important ingredient at First National. Our overwhelming culture is our people, and they are the best in the industry.

We Make Paperless Easy GreenFolders® empowers title and settlement agents, escrow companies, and law practices to overcome the limitations 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.

801.747.2132 | www.greenfolders.com GreenFolders, a division of First American Professional Real Estate Services, Inc., makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. GreenFolders is a registered trademark of First American Financial Corporation and/or its affiliates. ©2018 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE:FAF

Construction Project with

n e k o r

36 Agency Today | Issue 9

Priority

You originally underwrote the loan transaction believing that work would not start until after closing, but you just found out that construction has commenced and you are dealing with broken priority.

Mechanics’ Liens A mechanic’s (or construction or materialman’s) lien is a security interest in real property for the benefit of those who provide services, labor, materials or equipment to improve, repair or renovate the property.

Broken Priority The term broken priority is used to describe situations where conduct that could create mechanics’ lien rights has occurred before the Insured Mortgage is recorded. This conduct varies from state-to-state, but typically includes doing work on, or delivering materials to, the property. Broken priority is a problem because it means that later-recorded mechanics’ liens may have priority over the Insured Mortgage. Broken priority creates the greatest risk in states where all mechanics’ liens, no matter when recorded, attach to the real property on the date that any portion of the work of improvement begins (i.e., they “relate back”).

Underwriting Broken Priority Generally, we underwrite transactions with broken priority differently than those where work has not yet commenced— we have more and stricter requirements and may offer only “incremental coverage” to offset our increased risk. When broken priority is discovered late in the transaction, it can be difficult to change underwriting requirements that were established when broken priority was not an issue. Obtaining additional information and mechanics’ lien indemnities, or changing the form of coverage, may be challenging and contentious later in the transaction.

What Should You Do? Remember, you are required to obtain approval from an underwriter with the requisite authority limit for mechanics’ lien risk. Alert your underwriter to the changed circumstance. Then, as quickly as you can, gather as much of the following information as possible and discuss how you should proceed with the underwriter. The ALTA 32 series Issuing Standard and Mechanics’ Lien Risk Assessment (MLRA) form are useful starting points for this analysis. • Determine the requested form of mechanics’ lien coverage (unmodified Covered Risk 11(a), i.e. “full upfront coverage,” ALTA 32, etc.). • Identify the mechanics’ lien laws in your state and determine the extent and scope of your risk. Determine if there are any First American-approved statutory “safe harbors” or processes for re-establishing or setting priority.

• Determine the extent of the work done to date and who did the work. If a site inspection was performed, obtain photographs and reports. • Determine if contractors, subcontractors and/or suppliers have unconditionally waived or subordinated their lien rights to the Insured Mortgage – if legally enforceable under state law. • Determine whether the contractors, subcontractors, and suppliers who did work have been paid. • Determine the method and degree of fund control, and planned disbursement documentation (lien waivers, invoices, sworn statements, inspection reports, etc.). • Determine whether you can obtain mechanics’ lien indemnities and, if so, whether the financial strength of the project participants and indemnitors is sufficient to support the amount of our risk. • Review the budget and sources of funds. Consider whether the sources are reliable and the funds sufficient to complete the project. Determine how much equity the borrower will put into the project and when. • Determine whether or not the project is viable. An as-built appraisal, when available, may help with this analysis. • Determine the experience of the owner/developer and general contractor with this type of project and the extent of our successful (i.e., no mechanics’ lien claims) experience with those parties. • Conduct an internet search to find any relevant information about the project, its construction, owner/ developer and general contractor.

Key Takeaways For Future Transactions The best way to avoid broken priority in a construction loan transaction is to communicate to your customers the importance of recording the construction mortgage prior to the commencement of any work. Part of that communication should focus on the types of actions that constitute “commencement of work” in your state and our inability to rely on “siteimprovement” statutes in some states. Be clear that if priority is broken, we will likely have more and stricter requirements and the coverage may be more limited.

Know Your Deal Even if the parties do not intend to break priority, you should gather information and underwrite the deal as if they will. Obtain the above information at the outset (to the extent it is customary in the jurisdiction where the property is located). Last minute changes will be easier to handle if you expect the unexpected.

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Non-Imputation Coverage Without an Affidavit and Indemnity

38 Agency Today | Issue 9

The equity purchaser wants non-imputation coverage, but the equity seller is refusing to provide an afﬁdavit and indemnity.

Equity Transfers and Non-Imputation Coverage (NIC)

First American’s Position

NIC is frequently requested when an equity purchaser acquires a direct or indirect interest in a land-owning entity instead of the land itself. Less frequently, it is requested when the land itself is conveyed, but some of the principals behind the seller entity and the buyer entity overlap. It may also be requested when a non-managing member/investor is concerned about knowledge the managing member may have gained during the acquisition due diligence. In these cases, the knowledge and actions of one or more persons may be imputed to the landowning entity as well as to the purchaser, making them subject to Exclusions 3(a), 3(b), and 3(e) of the policy. A request for NIC is simply a request that we waive those exclusions for things that one party knew or did, but the other party did not.

If you cannot obtain a reliable afﬁdavit and indemnity, you should not offer NIC unless there are facts that adequately mitigate First American’s risk and you have consulted with, and obtained approval from, an underwriter with the requisite underwriting authority. Depending on the circumstances, you may need Corporate Underwriting Department approval.

NIC is most commonly given through the ALTA 15, 15.1 and 15.2 endorsements. These endorsements provide a partial waiver of Exclusions 3(a), 3(b), and 3(e) of the policy, effectively giving coverage for loss or damage that would otherwise be excluded because of the action, inaction, or Knowledge of certain specified persons or entities (usually the outgoing partners, members or entities). In other words, for title insurance purposes, these endorsements treat equity purchasers as though they were bona-fide purchasers for value even though there is no transfer of the Title and defenses that would be available under the bona-fide purchaser doctrine might not apply.

Why We Require an Affidavit and Indemnity When we agree to waive Exclusions 3(a), 3(b) and 3(e), we may provide coverage for off-record matters that were created by or known to the existing and/or exiting equity seller. Affidavits are our main source for obtaining this off-record information. Because we rely upon the representations in the affidavit, it makes sense to protect ourselves against false statements by obtaining an indemnity agreement. However, getting a reliable affidavit and indemnity may be difficult in cases where the seller is left without assets or will dissolve after the sale, or where the seller refuses to make any representations about the property because it is selling the assets “as is.”

Analysis The following factors will help you determine whether we can provide the requested coverage, a more limited form of coverage, or any coverage at all: 1. The structure of the transaction, e.g. “before” and “after” organizational charts, organizational documents, and the equity interest purchase agreement (EIPA), including any reps and warranties provided by the seller and any information about the property. 2. Will the equity seller remain “in the deal” as a partial equity owner or as a property manager? If so, it is less likely to have done something adverse to the property and not disclosed it to the buyer. 3. The form of requested NIC; 4. The scope of the policy coverage, including any Schedule B exceptions that would limit coverage without the need to invoke Exclusions 3(a), 3(b) or 3(e); 5. The length of time that the title-holding entity has been in existence and has held the property. The longer and more complex the history of the title holding entity, the greater the risk; 6. The use of the property and whether there is construction on the property; 7. Whether we can obtain the necessary information through other means (such as site inspection, interview of the property manager, survey, zoning report, Google™ search, Google Earth or reps in the EIPA); 8. The extent of the equity buyer’s diligence. The more thorough the diligence, the less chance there is something about which the buyer will not have knowledge; and 9. Whether the equity seller or its parent is a nationally known or publicly traded entity or has a past track record with First American.

Key Takeaways For Future Transactions Communicating with the customer is essential. Set realistic coverage expectations and try to obtain as much cooperation as you can. Providing NIC without an affidavit and indemnity is an extra-hazardous risk so involve an underwriter immediately. Try to educate your customer before they execute an EIPA. Explain why we require an affidavit and indemnity. Inform them that when a buyer agrees to waive requirements like an affidavit during negotiations about the representations and warranties in a purchase agreement, it is difficult for a title insurer to step in and take on that risk. If we decide to provide coverage without an affidavit and indemnity in a unique situation, clearly communicate that we may not do so in the future and document your file regarding the decision. Do not hesitate to work with your management and sales team when communicating with your customers about NIC. Agency Today | Issue 9 39

Missing Something?

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Attorneys as Closing Agents and Acting As Intermediaries By: First American Exchange Company

In some regions of the country it is common for attorneys to act as closing agent in connection with the sale and purchase of real estate. When acting as a closing agent, the attorney receives the purchase price from the buyer and, once the closing occurs, disburses it to the seller. If an attorney acts as the closing agent during a 1031 exchange, is this a problem?

IRC Section 1031 Under IRC Section 1031 and the deferred exchange regulations, a taxpayer can defer taxes by selling their relinquished property and acquiring replacement property at a later date; provided all of the rules are followed, the transaction is considered an exchange rather than a sale followed by a purchase. For this to happen, the taxpayer cannot have actual or constructive receipt of the proceeds from the sale (exchange funds).

Acquiring Replacement Property Since in most cases the buyer’s attorney handles the closing, the issue comes up most often when a buyer is completing the exchange by acquiring the replacement property. One view is that the buyer’s attorney is the agent of the taxpayer and may compromise the exchange if they handle the exchange funds when closing the deal. The opposing view is that the buyer’s attorney should be able to handle the funds because they are acting as the closing agent with duties to all parties, not just the buyer.

Practical Solutions If either the buyer or attorney are concerned, but prefer the attorney continue to act as the closing agent, one possible solution is to have the purchaser’s qualified intermediary

send the exchange funds directly to the seller. Other common options include having the title insurance underwriter, an escrow company or an attorney who is not an agent of the taxpayer handle the receipt and disbursement of the funds.

Qualified Intermediaries A separate, but related, question is whether a taxpayer’s attorney may act as the intermediary in their exchange. The IRS rules provide that an attorney cannot act as a qualified intermediary for a client if the attorney has performed services for the client any time during the two-year period ending on the date the relinquished property closes, unless those services are limited to the client’s 1031 exchange. Attorneys should consider alternatives before handling funds on either side of their client’s exchange transaction and seek the assistance of a qualified intermediary instead of attempting to act in that capacity. First American Exchange Company can help find solutions to these and other common issues that can arise in a taxpayer’s exchange. Visit www.firstexchange.com or call 800.556.2520 for more information. References: Reed v. Commissioner of Internal Revenue, 723 F2d 138 (1st Cir. 1983) Reg. Section 1.1031(k)-1(k)(2)

Agency Today | Issue 9

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TRADE SHOW

TIPS

Trade show participation can open a multitude of doors for companies seeking to expand their industry presence. Whether your intent is to meet new customers, build on existing relationships, create brand awareness or showcase your latest products and services, these tips can help optimize your strategy and improve the return on your investment.

The Right Show • Research within your target market to find out which shows they attend. • Review trade show audience and content to determine if either can contribute to your business objectives.

The Right Location • Select a booth location in a high-traffic area close to top brands, sponsors and attendee favorites. • Consider avoiding locations near loud show features as it may make conversations difficult.

The Right People • Staff your booth with knowledgeable professionals who are able to engage customers, capture qualified leads and effectively communicate your company’s value and competitive advantage. • Clearly outline expectations and responsibilities so your team can prepare for the show.

The Right Stuff • Look for discounts. Show contractors often offer early registrants discounted pricing on furniture and carpeting, electrical, internet connections and other booth services. • Go paperless. Printing brochures and pamphlets can be expensive; give attendees a business card with your key show messages and a link to your company's website, where they can download your literature. • Avoid creating booth graphics with show-specific messaging or booth numbers; generic graphics highlighting your company can be reused at future shows. • Store customized promotional items near the back of your booth or under your table and save them for qualified prospects and customers. • Bring a trade show exhibitor supply kit containing tape, scissors, twine, pens, power strip, extension cords, stapler, basic tools and a small first-aid kit. • Pass on the exhibitor opportunity if your budget is tight, consider being an attendee or contact the trade show organizer and offer to deliver a presentation on current topics of industry interest.

Agency Today | Issue 9 43

Expert Underwriting Trusted Relationships First American Titleâ&#x20AC;&#x2122;s Agency Division is committed to providing the resources, services and underwriting guidance our title agents/attorneys need to achieve new levels of success in their business.

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. AMD: 10/2018