Montana Big Sky Review

BIG SKY

2019 | ISSUE 8

Review

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

Page In This Issue

How Has the Housing Market Changed Since the End of the

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How Has the Housing Market Changed Since the End of the Great Recession?

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Agent Print Pro®

eClosings and eSignings

eClosing Insurability Matrix

By: Odeta Kushi, Deputy Chief Economist, First American Title

First American Launches Innovation Center

June marked the 10-year anniversary of the end of the Great Recession. Amid Independence Day celebrations, assessing how the American dream of homeownership has fared since the recession can provide helpful context for the health of today’s housing market. We have assembled a set of housing metrics and compared their values today with what those metrics looked like at the end of the Great Recession.

Montana Agency Team

GREAT RECESSION?

In the Housing Health chart on the next page, housing demand metrics (blue), supply metrics (green), and homeownership metrics (red) are scaled relative to their level at the end of the Great Recession (100). That means that the metrics can be interpreted as percentage gains or losses relative to that point. For example, a metric with a value of 150 today has improved by 50 percent relative to its value at the end of the Great Recession. Today’s housing market enjoys much stronger demand than a decade ago, but housing supply has slumped. 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: 08/2019

How Has the Housing Market Changed Since the End of the

GREAT RECESSION?

Increased Affordability and Greater Access to Credit Boost Demand Since the end of the Great Recession, affordability has improved, largely driven by lower mortgage rates and rising household income. Mortgage rates are even lower than a decade ago â&#x20AC;&#x201C; the 30-year, fixed mortgage rate in April was 4.1 percent, 1.3 percent lower than in June 2009. The lower mortgage rate, combined with higher household income, has increased consumer house-buying power by 54 percent since the end of the recession. At the same time, credit availability has improved by 30 percent according to the Urban Institute Credit Availability Index, increasing the number of potential home buyers. While nominal house prices are now 51 percent higher than at the end of the Great Recession, nominal house prices do not tell the full story on affordability. The Real House Price Index (RHPI), which adjusts nominal house prices for the influence of changes in household income and the mortgage rate on consumer house-buying power, is at the same level as 10 years ago. Greater consumer house-buying power has offset the increase in nominal prices. More house-buying power and expanded access to credit, along with a demographic tailwind from millennials aging into prime home-buying age, all bode well for housing market demand. The question is whether there are enough homes for sale to meet this surging demand. Continued on next page

First American Title | Big Sky Review | 2019 - Issue 8

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How Has the Housing Market Changed Since the End of the

GREAT RECESSION? Supply Deficit Grows

The short answer is no. Inventory turnover, the total supply of new and existing homes for sale as a percent of the stock of residential houses, has declined by 16 percent since 2009. A major reason for the lack of homes for sale is increasing tenure – the length of time a homeowner lives in their home. In the years following the recession, tenure has rapidly increased and it is currently more than 11 years, compared to just under seven years at the end of the Great Recession. Increasing tenure means existing homeowners, who supply the majority of homes for sale, are not selling and is the byproduct of two trends – older homeowners aging in place and many existing homeowners being locked-in with historically low mortgage rates. A natural solution to a housing supply shortage is to build more homes. Yet, for more than a decade, home building has not kept up with the demand for shelter. While housing starts, a leading indicator of new home completions, have doubled since the lows reached at the end of the recession, they remain 33 percent below their 2000 level. The home-building deficit (not pictured), which is the difference between the addition of new homes to the housing stock and new demand for homes from household formation, has been cut in half since 2009. However, the gap between supply and demand today remains high. In 2018, 1.2 million new households were formed, while net new supply of housing units was below 900,000 units. New household formation is expected to continue to grow as millennials are still forming households, so the need for more housing is likely to also grow.

Housing Largely Recovered, But Lack of Supply Lingers Despite a lack of supply, the homeownership rate has increased from a low of 63.4 percent in 2016 to 64.4 percent in 2018, which is very close to the homeownership rate at the end of the Great Recession. Our Homeownership Progress Index (HPRI), which estimates the homeownership rate given the underlying demographic and economic conditions, trended upward since 2010 and is currently 73 percent. The increase reflects the impact of millennials pursuing higher education and making other key life decisions that increase the likelihood of homeownership. After 10 years, the housing market has recovered from the Great Recession by many metrics. Demand is stronger, but a decade of building deficits has helped create a significant supply shortage. After all – you can’t buy what’s not for sale.

First American Title | Big Sky Review | 2019 - Issue 8

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Announcing the Launch of Agent Print Pro®

An online invitation-only marketing and print solution for your customers. Whether striving to create a good first impression or solidify brand recognition, real estate professionals know effective marketing is crucial to their business. This invitation-only, easy-to-use interface can be branded with your agency name, confirming your commitment to providing the tools necessary to help your real estate customers be successful. Agent Print Pro also provides invited real estate agents with access to top-quality print services at competitive prices, helping them stand out from the competition in a cost-effective and professional manner.

Variety of Formats » Property Flyers » Postcards » Greeting Cards

» » » »

Stationery Yard Signs Posters Post-It™ Notes

» » » »

Brochures Social Media Calendars And more!

Flexible Options » USPS® Every Door Direct Mail® Compatible » Personalized branding and messaging » Download high-resolution documents

Competitive Print Pricing » Flyers as low as 14¢ each » Postcards as low as 10¢ each » Door Hangers as low as 25¢

Custom Headline First Last Professional Title First American Title O: 555.121.1212 C: 555.121.1212 sample@email.com www.sample.com

For an annual cost of $99 per Agency,* First American agents will receive a unique Agent Print Pro Invitation Code to share with their real estate professionals. to Contact your First American Title account representative or visit the Pass-Thru Marketing Program in AgentNet®to request your account.

Not available in California. *Accounts set up per Agency name and billed via invoice. Subsidiaries require separate registration. 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: 07/2019

First American Title | Big Sky Review | 2019 - Issue 8

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Agent Q&A Title Agent Account Set Up Q How do title agents request an account? A Accounts can be requested by accessing the Pass-Thru Marketing Program in AgentNet®or by contacting their First American representative. Q What is the cost for title agents to offer this program? A There is an annual fee of $99 (billed by invoice), which allows First American policy-issuing agents to offer Agent Print Pro access to their customers using a unique Invitation Code. Q Is there a cost difference based on agency size? A No. The annual fee is charged per agency, regardless of size. All employees of an agency will use the same Invitation Code. Q How long does it take for accounts to be activated? A 7-10 business days. Once activated, the requester will receive an email confirmation. Q How would an agent find out if their company has already signed up for a Agent Print Pro account? A They would contact their First American account representative.

Invitation Codes Q Should title agency staff use the Invitation Code to create their own accounts? A No. Invitation Codes should only be used by real estate agents to request user accounts. Q How do agents invite real estate customers to join Agent Print Pro? A A Once the account is approved and activated, the requesting agent will receive a company-specific Invitation Code to share with their customers. Real estate agents will log onto www.AgentPrintPro.com and enter the Invitation Code to request an account. Q Are there flyers available for agents to promote Agent Print Pro and invite real estate agents to join? A Yes, links to customizable marketing flyers – with and without the Promo Code field, if applicable – will be provided with account approval notifications.

Q Is there a limit to the number of real estate agents an agency can invite to use Agent Print Pro? A No. Q Who approves real estate agent account requests? A As part of the initial account request, agents will provide a list of authorized Account Approvers. When their Invitation Code is used to request an account, all specified Account Approvers will receive an email to approve or decline the account request. When a real estate agent requests an account, they are required to provide their title agency representative’s name along with Invitation Code and contact information, which will be included in the notice to Account Approver.

Using Agent Print Pro Q What are printing cost like? A Prices vary by product, but here are just a few examples of the competitive pricing your customers will see: Sample: Flyers 14¢ | Postcards 10¢ | Greeting cards 21¢ Q How do real estate agents pay for their print orders? A Real estate agent orders are paid by credit card upon order submission. Q How are order payments processed? A Payments are processed securely using the Authorize.net credit card portal. Q Is there training material available for users? A Yes. While Agent Print Pro is designed with ease-of-use in mind, training and reference material is available for users in the Agent Print Pro platform. Q Can users download completed material as .pdf documents? A Yes. Users can download .pdf Proof documents to save and distribute by email. Continued...

Both flyers are also in the Pass-Thru Marketing Program. 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, Agent Print Pro, the Agent Print Pro logo, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates. AMD: 07/2019

First American Title | Big Sky Review | 2019 - Issue 8

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Agent Q&A Q Can users send content to prospects by email from Agent Print Pro? A There is no integrated email distribution system, but users can download completed order content and distribute to potential customers using their preferred email platform.

Shipping and Promo Codes Q How quickly are orders processed? A Most orders will require 2-3 business days for fulfillment. Q What shipping options are available? A All orders will be shipped via FedEx Express Saver or FedEx Overnight services. Q Can orders be shipped to the title agent office? A Yes. As part of the initial agency account set-up, title agents can elect to allow shipping to their predetermined offices, by use of Promo Codes. IMPORTANT: If Promo Codes are enabled, shipping charges will be billed to the title agent, and title agency staff will be responsible for receiving, sorting, handling and providing delivering services.

Additional Information Q Will this replace the Agency Pass-Thru Marketing Program? A Yes. We are currently in the process of transferring the Pass-Thru Marketing program material to the Agent Print Pro platform, so First American agents can take advantage of the competitive print pricing and enjoy a more robust marketing tool. Once the Pass-Thru Marketing Program is transferred to the Agent Print Pro platform, agents will continue to access the program via AgentNet which sets your content viewing permissions. Users who create accounts via Invitation Codes, will not see Pass-Thru material and vice versa. Q Will agents have to pay for access to Pass-Thru marketing material once it’s transitioned to Agent Print Pro? A No. The annual fee only applies if an agency would like to request an Invitation Code to allow their real estate agents to access and use Agent Print Pro.

If an agency does not elect to allow Promo Codes, orders will be delivered directly to the user and shipping charges will be billed to the user when their order is processed. Authorized shipping locations and Promo Code preferences are submitted as part of the initial account request. Promo Codes are an optional feature and can be canceled at any time, by emailing contactus@AgentPrintPro.com. Q How can a title agency employee find out if their Agency has Promo Codes, and if so, what they are? A The agency Principal and leadership team can advise if Promo Codes were set up, and if so, provide the Codes. Q If Promo Codes were not initially requested, can they be added? A Yes, a member of the agency’s leadership team would need to submit a request: contactus@AgentPrintPro.com.

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, Agent Print Pro, the Agent Print Pro logo, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates. AMD: 07/2019

First American Title | Big Sky Review | 2019 - Issue 8

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eClosings and eSignings Settlement/Title Agent to Lender Talking Points

eClosings are frequent topics of conversation in the industry and the interest around eClosing capabilities is expected to only increase in the months ahead. Below is some preliminary background information to help you better understand these important topics and discuss them in the field. We encourage you to stay informed by subscribing to First American Title’s eClosing and eSigning Real Estate Transactions Resource Center at https://firstam.com/eclosing.

What is an eClosing? »

An eClosing is any real estate closing event or process in which the buyer, seller, borrower or notary or others uses an electronic signature (eSignature) to sign some or all of the closing documents.

Where can I learn more about eClosing and eSigning real estate transactions? » »

Visit and subscribe to First American Title’s eClosing and eSigning Real Estate Transactions resource center at https://firstam.com/eclosing. It includes FAQs, educational videos, infographics and a state-by-state guide to remote online notarization.

What is First American Title’s perspective on the current landscape of eClosings? » » » »

The industry shift to a fully digital mortgage is happening and momentum is building for all the right reasons, but consumers will still want a choice. Lenders and settlement providers must prepare to offer eClosing options, eSign, in-person and remote online notary, as well as the traditional paper-based closing. Real estate closings are complex transactions that require collaboration between lenders and settlement providers. This remains true with eClosings – a Digital Mortgage needs a Digital Settlement. Settlement/title agents are best positioned to continue to handle closings, whether they are eClosings or traditional closings.

What is First American Title’s position on remote online notarization (RON) eClosings? »

All title insurance underwriters maintain a strategy addressing their tolerance for transaction risk. Some underwriters are willing to accept the risks involved in using remote online notarization in eClosings based on laws outside the property state. Lenders should determine if their risk tolerance aligns with the underwriter’s tolerances or approvals.

What is First American Title doing to support settlement/title agents that want to embrace eClosings? » »

First American Title is simplifying the complicated rules for eClosings with our eClosing Insurability Matrix located in the AgentNet® Agent Resource Center. First American Title is piloting a secure, scalable eClosing solution that helps lenders stay focused on the digital mortgage, while settlement/title agents manage the digital settlement process just like today.

Please visit https://www.firstam.com/title/eclosing for in-depth information and state-by-state eClosing updates.

First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.

First American Title | Big Sky Review | 2019 - Issue 8

AMD: 07/2019

www.firstam.com

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eClosing Insurability Matrix The eClosing Insurability Matrix is an online database that contains underwriting rules about which types of eClosings are insurable under a First American title policy within a particular state and county or other local recording jurisdiction. The eClosing Insurability Matrix includes notes about jurisdiction-specific requirements for recording eClosing documents, and also provides links to applicable underwriting communications about eClosings. Log on to AgentNet® and select eClosing Insurability Matrix from the dropdown menu under the Agent Resource Center tab.

FIRST AMERICAN

Launches Innovation Center The First American Innovation Center is a new online information resource offering insights and thoughtful posts from First American experts examining the market forces and technology reshaping the process of buying and selling property in the United States. Real estate, title and mortgage lending professionals can subscribe to First American’s Innovation Center for updates when new articles are published. First American’s Innovation Center currently features the following three articles offering fresh perspectives on some of the industry-wide innovations poised to improve the real estate transaction for all parties involved. »» »» »»

Applying Decision Science to Title Insurance Key Elements Powering the Evolution Toward a Digital Real Estate Transaction Closing Three Lessons from the Pursuit of a Better Real Estate Closing Experience

Please visit the First American Innovation Center and subscribe, and don’t hesitate to share Innovation Center posts with your industry network via social media using the social share buttons on the site, or via other channels.

First American Title | Big Sky Review | 2019 - Issue 8

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

Paul Newton Regional Underwriting Counsel D: 801.316.0608 panewton@firstam.com

Cindy Guanell

Lance Lewis

Regional Underwriter D: 208.321.5184 cguanell@firstam.com

Area Underwriter D: 208.321.5157 lancelewis@firstam.com

FIRST AM ER I C AN TI TL E

MONTANA AGENCY TEAM

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