2017 | ISSUE 5
The
Pronghorn Press ~ A WYOMING AGENCY NEWSLETTER ~
W HO’S O N F I R S T ? By: Amie Voss, VP, Wyoming, Colorado and Montana State Agency Manager
The 2017 Major League Baseball season began on Sunday, April 2, 2017 and runs through October 1, 2017. In baseball and in business, the strength of a deep bench can be a game-winning advantage that leads to success. Below are a few personal and professional stats of our Wyoming Underwriting all-star heavy hitters who are committed to providing an exceptional level of service to help you gain a pennant-winning advantage in your business.
Sandy Plaven Senior Underwriter, Colorado and Wyoming (O) 303.305.3361 | (C) 720.626.3802 splaven@firstam.com Sandy has been in the title insurance industry for thirty-nine years and has seen our resilient industry change and adapt to market challenges over the years. She has extensive knowledge in all aspects of the industry, including residential, commercial, land acquisition and development, sales and escrow. Sandy and her husband, Lou, live in Strasburg, a small town on the eastern plains of Colorado, and enjoy the peace and quiet. She has a grown son and daughter and two grandsons who enjoy spending time with the family in Strasburg and also has a furry, four-legged family member who is a Border Collie mix. They love to camp and experience the beautiful scenery that Colorado has to offer. Sandy also volunteers her time helping women and children at the local domestic violence shelter.
Page
In This Issue
1-2
Who’s On First?
3
High Liability or Special Risk Authorization Requests
4
New Twist on Wire Fraud
5
Economic Center
6
Make Sure You Are Using the Updated 1099-S
7
AgentNet® Content Library
Our office will be closed in observance of the following holidays: MEMORIAL DAY Monday, May 29th INDEPENDENCE DAY Tuesday, July 4th
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: 04/2017
©2017 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
W HO’ S O N FI R S T?
(CONT.)
Bobbi Espinosa, Associate Underwriter, Colorado and Wyoming (O) 303.305.3363 | (C) 720.288.1790 | bespinosa@firstam.com Bobbi’s title insurance industry adventure started in 2001 pulling documents. Since then, she has held numerous positions in the field and has been employed with First American Title for the last 7 years. During her industry career, Bobbi has been an examiner, builder title officer and title manager. In April of 2016, she joined the Agency Division as an Associate Underwriter and has thoroughly enjoyed working with all of our wonderful agents. Bobbi and her fiancé, Brandon, and children, Adriana and Cristian, are huge mountain lovers and spend a lot of free time biking and hiking. Her summer goal is to try paddle boarding!
Paul Newton, Underwriting Counsel, Mountain Region (O) 801.316.0616 | (C) 801.592.9626 | panewton@firstam.com A knowledgeable and customer-focused professional, Paul has over thirty-nine years of experience in the legal and title industries. His background includes experience as a recorder, searcher, examiner, closer and owner. Paul recently left the agency side of the industry and joined First American Title as Mountain Region Underwriting Counsel. Paul enjoys spending quality time with his wife, Kathy, his 5 children and their spouses, and twenty-three grandchildren.
Cindy Guanell, Underwriting Counsel, Mountain Region (O) 208.321.5184 | (C) 208.390.5764 | cguanell@firstam.com Cindy’s career in the title industry started twenty-six years ago and includes thirteen years of direct agent experience and thirteen years underwriting experience with First American Title Insurance Company. Her background provides a unique perspective when working through agent transactions and she has developed a broad range of knowledge in claims management, operations, training, customer service, regulatory issues, risk management and underwriting complex commercial transactions. Cindy has been actively involved in the Idaho Land Title Association since 2003, currently serves on the ILTA Executive Board as immediate Past President and has also been a member of the Montana Land Title Association since 1998. Born and raised in southeast Idaho, Cindy and her family have spent many years skiing and snowboarding on the beautiful mountains of Jackson Hole, Snow King and Grand Targee Resorts. She and her husband, Eric, currently live in Boise, Idaho and have two grown children and two grandchildren. When she is not behind the desk, Cindy enjoys skiing, boating, hiking, biking and spending time with her husband and family (especially her granddaughters). The day-to-day interactions of underwriters can sometimes be reminiscent of the old Abbott and Costello routine. Who’s in title?...What’s on the mortgage… and I don’t know is on the note. Agents can rest assured they will have the home field advantage when they choose to work with the Wyoming Underwriting Team whose expertise, knowledge and problem-solving ability has all the bases covered, regardless of the complexity of the transaction. First American Title | The Pronghorn Press | 2017 - Issue 5
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TOP TIPS
High Liability or Special Risk Authorization Requests
The First American Title Agency Agreement requires policy-issuing agents to seek underwriter approval prior to the issuance of policies that exceed their specified Policy Issuing Authority limit or for transactions that have special risks. Underwriter approval is also needed for any transaction involving a principal of the agency.
Here Are Five Top Tips To Help You Simplify And Streamline Requests For Approval 1.
Know your agency’s contracted Policy Issuing Authority limit. If you are unsure, contact your Agency Sales Representative.
2.
You can submit requests for approval using the Underwriting Request feature in AgentNet® or by sending an email to your local First American Title underwriter.
3.
Provide sufficient paperwork and information to assist the First American Title underwriter in reviewing the request, as applicable: • Authorization Request Form – Available and easy to find in the Content Library on AgentNet • Mechanic’s Lien Risk Assessment (MLRA) information, if mechanic’s lien risk is involved in the transaction • Information about the proposed rate to be charged for the policy(ies) for the proposed transaction • Prior policy, if any
4.
The complete file number on the authority request must match the complete file number on your remittance report.
5.
Sometimes transactions start out below your authority limit, but then the requested policy amount changes at or immediately prior to closing. Under these exigent circumstances, follow the same procedure outlined above and make a notation of POST-CLOSING in your submission.
To View Online Training Videos And Guides Log in to AgentNet> Access the User Guides tab> Select My Files-Underwriting Requests For instructor led training on utilizing the Underwriting Request Feature in AgentNet, contact your local First American Title Agency Sales Representative.
The information contained in this document was prepared by First American Title Insurance Company (“FATICO”) for informational purposes only and does not constitute legal advice. FATICO is not a law firm and this information is not intended to be legal advice. Readers should not act upon this without seeking advice from professional advisers. First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates.
First American Title | The Pronghorn Press | 2017 - Issue 5
AMD: 02/2017
www.firstam.com
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©2017 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
NEW TWISTON
WIRE FRAUD By: Michele A. Green, SVP, Senior Business Counsel - Agency Division
Over the past few years, First American Title has communicated with its settlement professionals that they are targets for fraudsters due to the large sums of money they are responsible for disbursing in the course of closing real estate transactions. These fraudulent schemes to divert funds continue, and losses to the parties involved are often devastating. In the classic scheme, the closing professional receives an email that provides disbursement instructions regarding the seller proceeds or loan payoffs. These emails appear to come from a party in the transaction, but are actually from fraudsters who have hacked into the email traffic associated with the transaction. Most settlement professionals now employ call-back procedures to confirm any instructions received via email, but mistakes are sometimes made and funds are lost.
THE NEW TWIST
WHAT CAN WE DO?
The latest evolution in this theft epidemic occurs after a closing professional has already wired funds to a fraudster’s account having relied upon fraudulent wire instructions.
Settlement professionals should institute and unwaveringly follow protocols that require verification of all disbursement instructions.
The fraudster then initiates contact with the closing professional and poses as the receiving bank for the wired funds, often using a spoofed caller identification to increase the appearance of legitimacy. The fraudster communicates that the funds were sent to an account flagged as being suspicious - and assures the settlement professional that the funds will be returned within a few days. This assurance tricks the closer into not contacting the true receiving bank to freeze the funds, and provides the fraudster sufficient time to move the funds beyond the reach of the parties.
• Most settlement professionals require at the very least outgoing call-back procedures utilizing a known, safe telephone number to confirm any instruction received via email. • Incoming telephone calls are not a substitute, due to the known risk of call spoofing. • Closing professionals should also take care to confirm direct contact with the funds recipient where possible. Funds have been lost when a closer relies on a call-back made to counsel for a recipient, but the confirming contact between the recipient and his/her counsel was via compromised email. • Many settlement professionals now require inperson, wet signature disbursement instructions from parties who have presented valid identification.
AS TO THE NEW TWIST Upon any indication that funds have or might have been misdirected, settlement professionals should initiate immediate, direct, outgoing contact with both the wiring and the receiving bank. Never rely on an incoming call to provide confirmation of contact. BE CAREFUL OUT THERE!
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 | The Pronghorn Press | 2017 - Issue 5
AMD: 02/2017
www.firstam.com
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©2017 First American Financial Corporation and/or its affiliates. All rights reserved. NYSE: FAF
E C O N O M IC C E N T ER By: Mark Fleming, Chief Economist
What’s Behind the Surge in Real House Prices? First American’s proprietary Real House Price Index (RHPI) looks at February 2017 data and includes analysis from First American Chief Economist Mark Fleming on the impact of under-supplied markets on real house prices. “Real, purchasing-power adjusted house prices increased 11 percent in February compared to a year ago. The lack of homes listed for sale is causing unadjusted house price growth to remain strong. Additionally, increasing interest rates are reducing consumer purchasing power. The result is a substantial year-over-year increase in the real price of homes,” said Mark Fleming, chief economist at First American. For Mark’s full analysis on affordability, the top five states and markets with the greatest increases and decreases in real house prices, and more, please visit the Real House Price Index.
What makes it a Real House Price Index? House prices are typically reported nominally. In other words, without adjusting for any inflation. The price of a house today is not directly comparable to the price of that same house 30 years ago because of the long-run influence of inflation in the economy. The RHPI helps provide an alternative view of the change over time of house prices in different markets across the country.
Why does the RHPI tell a different story than other house price measures? When incomes rise and/or mortgage rates fall, consumer house-buying power increases. Traditional measures of house price affordability are dependent on the assumption of specific loan terms and the choice of income level. The RHPI is not dependent on any of these assumptions and so it more broadly reflects the real price experienced by consumers regardless of their income level or the loan terms specific to their situation.
The main story in most markets this spring is the lack of supply. Combined with unfaltering demand, the lack of supply continues to pressure unadjusted prices higher in one of the strongest spring sellers’ markets seen in recent memory. - Mark Fleming, Chief Economist
First American Title | The Pronghorn Press | 2017 - Issue 5
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Make Sure You Are Using the Updated 1099-S Title agents and attorneys closing certain reportable transactions could face fines of $250 per incident if they are not using the updated IRS Form 1099-S. The new 1099-S form went into effect Jan. 1 and added a new checkbox to report the transfer of real estate by a foreign person. The IRS has provided instructions for the 1099-S, which is used to ensure that sellers report the full amount of capital gains on each year’s tax return. The penalty for filing an incorrect form is $250 per failure and up to $3 million per calendar year. Penalties can be reduced if the correct 1099-S is filed before certain dates. Title agents and attorneys will want to ensure their title production software has been updated with the new form. Generally, transactions must be reported that consist in whole or in part of the sale or exchange for money, indebtedness, property or services of any present or future ownership interest in any of the following:
1. Improved or unimproved land, including air space 2. Inherently permanent structures, including any residential, commercial or industrial building 3. A condominium unit and its appurtenant fixtures and common elements, including land 4. Stock in a cooperative housing corporation 5. Any non-contingent interest in standing timber The following is a list of transactions that are exempt from being reported: • If the seller certifies that the sale price is for $250,000 or less and the property is for their principal residence • If the “transferor” (seller) is a corporation or a government unit • Any transaction that is not a sale or exchange including a bequest, a gift and a financing or refinancing that is not related to the acquisition of real estate • A transfer in full or partial satisfaction of a debt secured by the property. This includes a foreclosure, a transfer in lieu of foreclosure or an abandonment • If the total money, services and property received is less than $600
Reprinted with permission of the American Land Title Association. Copyright © 2004-2017 American Land Title Association. All rights reserved.
First American Title | The Pronghorn Press | 2017 - Issue 5
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AgentNetÂŽ Content Library ALTA Endorsements The Content Library in AgentNet is a great resource available to agents and provides quick access to bulletins, manuals, guidelines and a library of information. The Content Library is also a great tool for accessing information about ALTA Endorsements associated with specific types of loan and real estate transactions. Log onto AgentNet https://agencymyfirstam.com 1. Enter User Name and Password 2. Select Content Library under the Services tab 3. Type name of ALTA Endorsement (e.g., ALTA 9) in the search field 4. Locate Colorado-specific items by selecting Wyoming from the menu on the left 5. Refine the search by using the Sort tab to select Best Match, Name or Date The First American Title ALTA Endorsement Issuing Standards provide details regarding the purpose of the endorsements, whether underwriting approval is required and the steps to follow to issue the endorsement. Please contact the Wyoming Underwriting Department if you have any questions about the issuance of endorsements and the coverage they provide.
First American Title | The Pronghorn Press | 2017 - Issue 5
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