Montana Big Sky Review Newsletter

2020 | ISSUE 10

BIG SKY Review

- A M O N TA N A A G E N C Y N E W S L E T T E R -

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In This Issue

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Why the Housing Market May Weather Coronavirus Impact Better Than the Great Recession

COVID-19 Resources Agent Print Pro™

AgentNet® Content Library Underwriting Communications

By: Mark Fleming, Chief Economist, First American Financial Corporation www.firstam.com/economics

Ready... Set... eClose

Working From Home

As we are all too aware, the coronavirus outbreak has taken hold of the domestic and global economy. The housing market is not immune to its impact but may be in a better position than many believe. Recent data shows that weekly unemployment claims soared to a record, which will, in turn, work to depress household incomes and consumer confidence. While mortgage rates have fallen due to the economic uncertainty, potential home buyers that are confined to their homes cannot necessarily take advantage of the affordability boost. Many still bear scars from the Great Recession and may expect the housing market to follow a similar trajectory in response to the coronavirus outbreak. But, there are distinct differences that indicate the housing market may follow a much different path. While housing led the recession in 2008-2009, this time it may be poised to bring us out of it.

The eClosing Toolkit

Committed to Meeting Customer Needs Quarterly Roundup

Montana Agency Team

“This time, housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis.” Continued on next page

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. AMD: 05/2020

Why the Housing Market May Weather Coronavirus Impact Better Than the Great Recession The Housing Market Then Versus Now Let’s examine several differences between the pre-Great Recession housing market and the housing market at the cusp of the coronavirus outbreak. »

Housing Market is Not Overvalued: The graphic below compares house-buying power and the median sale price of a home from the year 2000 through January 2020. If housing is appropriately valued, housebuying power should equal or outpace the median sale price of a home. The only time period when the median sale price was greater than house-buying power was from 2005 through 2007, indicating an overvaluation of housing, or a “housing bubble.” Today, house-buying power is nearly twice as high as the median sale price of home, implying that housing is not overvalued, and is in fact in a much better position entering this potential recession than it was ahead of the last.

The Housing Market is Underbuilt: Housing enters this potential recession underbuilt rather than overbuilt; a significant difference compared with the pre-Great Recession housing market. In fact, since 2009, housing demand has outstripped housing supply. In 2018 – the latest full year for which we have comprehensive data – 1.2 million households were formed, while only 860,000 units were produced, resulting in a shortage of 340,000 units. Prior to 2009, the opposite was true, as housing supply significantly outpaced demand. The limited supply of homes positions the housing market to lead the recovery, once the impact from the coronavirus outbreak fades. In fact, it’s important to remember that the housing market has traditionally aided the economy in recovering from a recession. Consumers who are less affected by a downturn are willing to buy and sell, which can help get other parts of the economy moving.

Equity is at Historical Highs: The housing market today is not driven by liberal lending standards, sub-prime mortgages, and highly leveraged homeowners, as shown by the fact that the household debt-to-income ratio is at a four-decade low. The housing crisis during the Great Recession was fueled heavily by the fact that job losses were paired with a significant share of homeowners who had little, if any, equity in their homes. Homeowners today have very high levels of tappable home equity, providing a cushion to withstand potential price declines.

What’s the Prognosis for Housing? Unfortunately, the service industry – hospitality, retail and leisure specifically – will likely feel the sharpest and most immediate economic pain from the coronavirus outbreak. There are over 130 million workers in the overall service sector, which accounts for 86 percent of total nonfarm employment, so job losses are expected to be high in this labor-intensive sector. Of course, the housing market will not go unscathed, as consumer confidence and a strong labor market are essential in the decision to purchase a home. Yet, this time, housing is a casualty of a public health crisis turned economic, not the cause of an economic crisis.

January 2020 Real House Price Index In January 2020, more than a month before the coronavirus outbreak took hold in the U.S., the Real House Price Index (RHPI) confirmed the housing market’s surging momentum. Two of the three key drivers of the RHPI swung in favor of increased affordability in January. The labor market showed continued strength, as rising average hourly earnings resulted in a 2.3 percent yearly increase in household income. Additionally, compared with January 2019, the 30-year, fixed-rate mortgage fell by 0.8 percentage points. So, consumer house-buying power – how much one can buy based on changes in income and interest rates – continued to grow, boosting affordability and working offsetting the negative impact from rising house price appreciation. For more analysis of affordability, please visit the Real House Price Index. First American Title | Big Sky Review | 2020 - Issue 10

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COVID-19 Resources AGENT PRINT PRO™

Communication is key as the COVID-19 situation continues to evolve. With that in mind, Agent Print Pro offers customizable and ready-to-share content related to the changing environment surrounding the outbreak. To view the complete library of COVID-19 resources, login to your Agent Print Pro account.

To access Agent Print Pro: 1.

2. Click the Agent Resource Center tab 3. Select Agent Print Pro

Contact your First American Title representative for more information. 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: 04/2020

First American Title | Big Sky Review | 2020 - Issue 10

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AgentNetÂŽ Content Library

UNDERWRITING COMMUNICATIONS The Content Library in AgentNet is a great resource available to agents and provides quick access to bulletins, endorsements, manuals, guidelines, and a library of information. The Content Library is also an excellent tool for accessing the most recent State and National Underwriting Communications, which provide Standards and Guidelines on topics related to COVID-19. Log into AgentNet https://agencymyfirstam.com 1. Select Content Library 2. Type Underwriting Communication in the search field 3. Select state from left menu (not required) 4. Refine search using Sort tab Contact your local Underwriter if you have any questions.

The eClosing Toolkit The eClosing Toolkit in the Agent Resource Center on AgentNet contains RON and eClosing resources.

First American Title | Big Sky Review | 2020 - Issue 10

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Ready... Set...

eClose

Remote Online Notarization (RON) and eClosing Resources What Type of eClosing are You Handling?

eClosing/eSigning Knowledge Center

Hybrid: Any combination of closing types. Typically means ink-signing recordable/ notarized documents and eSigning the rest of the closing package.

www.firstam.com/eclosing

In-Person eClosing (IPEN): Electronic documents are eSigned and eNotarized inperson. Typically performed on a tablet shared by the signer and the notary.

Interactive website containing important information to help agents navigate the eClosing process, including:

Remote Notary eClosing (RON): A fully digital process where electronic documents are eSigned and eNotarized once identity is verified with the notary in a remote location via webcam. Remote Ink-Signed Notarization (RIN): Paper documents are ink-signed while a notary witnesses via webcam. The ink-signed documents are then mailed back to the notary for final ink notarization. CONTACT STATE UNDERWRITER FOR

Recent State Executive Order Updates First American is tracking these rapidly changing developments and responding accordingly. Please contact your local state office or First American representative for more information.

MORE INFORMATION.

What eClosing/eSigning Platforms and Vendors are Approved? Note: The permissible vendor list may change without notice, and superceeds UWC NA-2020-001. List revised: 5/7/2020.

PORTAL DocuSign® Docutech DocVerify eNotaryLog Expedite® Close (Black Knight) Nexsys® Clear Sign Notarize NotaryCam® Pavaso® Polunsky Beitel Green, LLP SIGNiX Simply Secure Sign Snapdocs

HYBRID    n/a         

IPEN  n/a  n/a n/a  n/a n/a     n/a

RON n/a         n/a   n/a

This permissible vendor list includes vendors First American has reviewed and considers permissible for the indicated closing type. Vendors providing RON services are permissible for use for RON Closings only in those states that have enacted RON legislation and must still be reviewed on a state-by-state basis. Please check with local underwriting for upto-date information. Agents are encouraged to use a platform that is acceptable to the lender, adheres to state regulations, meets the Company’s internal security requirements for vendor vetting, and follows First American Underwriting Guidelines, including NA-2020-001, which can be found in the Content Library on AgentNet.

First American eClosing experts are available to discuss the nuances of eClosings with title agents and support their efforts to offer eClosings to their customers. Contact your First American representative with questions.

Remote Online Closing State-by-State Guide Current information about state-specific RON laws.

Educational Videos • What is an eClosing? • The New World of eClosing • eVaults and eNotes

Additional Resources RON eClosing Professional Practices https://firstam.us/34Acwfo Practical guidelines and general technology requirements for conducting a RON eClosing.

eClosings and eSignings Lender Talking Points https://firstam.us/33wxpI3 Guidance to assist agents when engaging and educating lenders about eClosings.

Click Here to Download Flyer

First American Title | Big Sky Review | 2020 - Issue 10

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WORKING FROM HOME

Four Tips to Stay Safe, Productive and Connected

#1 Be Secure Remote workers should take particular care to make sure the tools they are using have security in mind. Install updates and patches promptly, secure your WIFI access point, use a virtual private network (VPN), and be sure to use complex passwords and multifactor authentication where possible.

#2 Maintain a Routine Structure your day by mimicking your office routine as closely as possible to stay productive. With a shorter commute, you may find yourself starting a little earlier and accomplishing more during this interruption-free time. Take regular breaks, have a healthy lunch, and try to get outside and enjoy some sunshine. A dedicated office space may help when it’s time to close up shop and transition your mind at the end of the day.

#3 Stay Connected to Your Team With in-person contact with co-workers gone, the ability to maintain a connection is more important than ever. You may find it necessary to over-communicate in order to ensure your team members are clear about file and/or project details. Team members are already inundated with messages, so, before sending a communication, remember to keep it short and sweet, stick with need to know information. Secure video conferencing platforms have become extremely popular and can be an effective communication tool.

#4 Find a Good Work-Life Balance If you’re not the only one working from home, or your home is doubling as a school, it can be difficult to keep sounds and disruptions to a minimum. Hold a family meeting so everyone is able to communicate their needs, whether it’s the importance of a quiet work environment, eliminating distractions or setting hours to assist with homeschooling; involving your family in discussions about ground rules and guidelines can help everyone maintain productivity. At the end of the day, make spending quality time with your family a priority.

First American Title | Big Sky Review | 2020 - Issue 10

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Committed to Meeting

Customer Needs

First American remains committed to doing all we can during this difficult time to meet our customers’ needs and promote practices that help protect our employees, the customers we serve and our communities. Whether our people are working from home or at the closing table, our customers’ best interests and business remains top of mind. Thank you for all you’ve entrusted with us.

Mark your calendars and make plans to attend the West Region Quarterly Roundup. Invitations to the Railroads, Whistles and Rights of Way Agency Webinar are coming soon!

First American Title | Big Sky Review | 2020 - Issue 10

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FI R ST AMERIC AN T ITL E

MONTANA AGENCY TEAM

Amie Voss VP, Agency State Manager D: 303.305.3358 abvoss@firstam.com

First American Title | Big Sky Review | 2020 - Issue 10

Cindy Guanell Regional Underwriter D: 208.321.5184 cguanell@firstam.com

Lance Lewis Area Underwriter D: 208.321.5157 lancelewis@firstam.com

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