March 20, 2017
www.thetitlereport.com
Volume 18, No. 10
Wanted: Action to improve small-business economy
INSIDE THIS EDITION Housing demand should extend industry momentum Page 4 reQuire completes Deeds on Demand purchase Page 5
Small-business owners are more optimistic about the country’s business climate than they were before last November’s election. That positive outlook, however, is not likely to translate into positive results unless Congress reins in tax costs, healthcare costs and burdensome regulations, an executive from the National Federation of Independent Business (NFIB) told members of a congressional subcommittee. Testifying at the recent “State of the Small Business Economy” hearing, NFIB Director of Research and Policy Analysis Holly Wade said the trio of taxes, regulations and the cost of health insurance have created significant barriers for small-business owners.
Title Resource Group drives Realogy’s proÀts Page 5 Attorneys Title reports best year since 2004 Page 6 Old Republic expands board Page 8 ePN network adds 25 counties Page 11
“Over the past 10 years, small-business owners have struggled to bounce back from the Great Recession. The economic recovery has been painfully slow for many, at first due to poor sales but quickly overtaken by issues related to taxes, regulations and the cost of health insurance,” Wade testified.
Hillsborough Title names president Page 12
“In response to the combination of policy constraints and anemic [Gross Domestic Product growth], few small-business owners find economic conditions supportive of investing in or growing their business and new business formation has languished,” she said.
Loan originations at highest level in three years Page 13
Continued on Page 3
Total U.S. foreclosure presale inventory rate: 0.94% Month-over-month change in foreclosure presale inventory rate: -0.46% States with the most non-current* loans: Mississippi, New Jersey, Louisiana, Alabama, West Virginia States with the fewest non-current* loans: Idaho, Montana, Minnesota, Colorado, North Dakota *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. Note: Totals are extrapolated based on Black Knight Financial Services’ loan-level database of mortgage assets.
QUOTABLE
KEY STATS
Month-over-month change in delinquency rate: -3.85%
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The economic recovery has been painfully slow for many, at first due to poor sales but quickly overtaken by issues related to taxes, regulations and the cost of health insurance. Holly Wade, Director of Research and Policy Analysis, National Federation of Independent Business
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Total U.S. loan delinquency rate: 4.25%
ABOUT US
The Title Report is a production of October Research, LLC specializing in business news and analysis for the settlement services industry and is published 24 times a year. Contact information: October Research, LLC ATTN: The Title Report 3046 Brecksville Road, Suite D Richſeld, OH 44286 Tel: (330) 659-6101 Fax: (330) 659-6102 Email: contactus@octoberresearch.com CEO & Publisher Erica Meyer Editorial & Publishing Editorial Director Chris Freeman Editors Mark Lowery, The Title Report Katherine Bercik, Esq., RESPA News Andrea Golby, The Legal Description Mike Holzheimer, Valuation Review Robert Rozboril, Dodd Frank Update Seminars and Webinars Tara Quinn, Director eCommerce Rick Harris, eCommerce Director Sales & Marketing Frank Carson, Senior Account Executive Sarah Harrington, Marketing Manager Jake Dean, Sales Support Circulation / Customer Service Kathy Hurley Business Ofſces Sam Warwar, Esq. Michelle Easter, Accounting
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Volume 18, Number 10 ISSN: 1937-3899 (print) 1397-3902 (online)
EDITOR'S NOTE What’s keeping me from flipping out? Dear Readers, Does life imitate art? Or is it the other way around? I’ve never been quite sure about that. I wrestled with that issue as I read a report from ATTOM Data Solutions on home flipping. If you’ve ever channel surfed during a weekend, you’ve undoubtedly noticed the plethora of shows devoted to the subject. There’s Flip This House, The Real Estate Pros, Flip That House, The Property Ladder, Flipping Out and House Hunters. And those are the titles that immediately spring to mind. I’m sure I’ve forgotten many others. Also huge at one time were those traveling seminars – advertised on the Internet and in newspapers – instructing would-be home flippers how to get their hands into the promised treasure chest. Television shows on the subject still abound, but many of us realized long ago that these are mostly entertainment. Home flipping can’t be that easy, could it? And there was also the foreclosure crisis forcing many get-rich-quick dreamers to consider another path to prosperity. Well, not everyone was dissuaded. In 2016, 193,009 single family homes and condos were flipped (sold twice within a 12-month period), according to the ATTOM report. That was the highest number of flips since 2006. Home flips accounted for 5.7 percent of all single family home and condo sales last year, and generated an average profit of $62,624, the report revealed. “Home flipping was hot in 2016, fueled by low inventory of homes in sellable or rentable condition along with a flood of capital — both foreign and domestic — searching for the returns and stability available with U.S. real estate,” ATTOM Data Solutions Senior Vice President Daren Blomquist said. “The combination of more home flips and a greater share of financing for flip purchases resulted in a 19 percent jump in the estimated dollar volume of financing for home flip purchases, up to $12.2 billion for the flips completed in 2016 — a nine-year high.” What’s more, ATTOM said 126,256 entities — both individuals and institutions — flipped homes in 2016, the highest number since 2007. As we speak, the television networks probably are preparing more shows on the subject. And don’t be too surprised if those seminars are resurrected. Share your thoughts,
Mark Lowery Editor mlowery@octoberresearch.com
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TOPSTORIES Continued from Cover
Wade was one of several business analysts, small-business owners and scholars who testified before a congressional subcommittee on economic growth, tax and capital access. Other speakers included Stan Veuger, PhD, resident scholar at the American Enterprise Institute; Victor Hwang, vice president of Entrepreneurship, Ewing Marion Kauffman Foundation; and Bob Bland, founder and CEO of Manufacture New York. The hearing was chaired by Rep. Dave Brat (R-Va.), a former economics professor who said subcommittee members hoped to find solutions to help small-business owners. “In the last eight years, the economy grew at an anemic 1.5 percent. This is half the rate of the historical average,” Brat said. “During this period, health care costs rapidly increased. Small businesses spent $1.89 trillion a year to comply with a tangle of regulations, and small businesses faced an effective tax rate of over 47 percent … Congress and the Trump administration have already begun to roll back the costly, duplicative and burdensome regulatory regime put in place by unelected Washington bureaucrats.”
owners optimistic about the outlook for business conditions and business expansion has increased since November. “The rosier outlook has translated into more favorable expectations for sales growth and hiring to support expected gains in sales,” Wade said. “As owners’ confidence in the economy and economic policies rises, owners will be more likely to invest in and grow their business.” Congress, she said, can capitalize on the positive outlook of small-business owners by creating a friendlier business climate. One step would be simplifying the tax code. “Most small-business owners must use a tax preparer to file their business-related taxes to ensure compliance, an unnecessary cost to provide tax revenue to the government that simplification could eliminate,” Wade said. Another problem identified by small-business owners is regulatory compliance. NFIB said one-third of smallbusiness owners it surveyed said unreasonable government regulations were a critical problem.
Hwang, of the Kaufmann Foundation, said Americans are suffering from an entrepreneurship deficit. He said the deficit was characterized by the declining rate of Americans starting new businesses.
“The volume of regulations is important in that most small employers must take on the responsibility of learning about new government requirements themselves instead of delegating the task to an employee because their staff is too small,” Wade said.
“The data indicate that entrepreneurs create economic opportunities for others in society, like a circle in the water that ripples outward, in a continuing process that facilitates upward mobility,” Hwang said. “Put simply, fewer startups mean a lower quality of life for Americans.”
When it comes to problems facing small-business owners, burdensome regulations takes a back seat to the rising cost of health care. Since 2008, the percentage of smallbusiness owners with less than 50 employees offering health insurance dropped 14 percent to 29 percent in 2015.
Small-business owners more optimistic
“Many owners annually confront the arduous task of adjusting profit expectations, insurance plans, cost-sharing and other mechanisms to help absorb often erratic changes in premium costs,” Wade said.
According to NFIB, the percentage of small-business
First American remembers CoreLogic CEO Less than three weeks after being granted a temporarily medical leave of absence from CoreLogic, former longtime First American Financial Corp. (FAF) executive Anand Nallathambi, 55, has died. CoreLogic’s announcement of Nallathambi’s death March 2, 2017, did not disclose any further details. Although Nallathambi most recently served as president and CEO of CoreLogic, he’d previously served at FAF in various executive roles for 18 years. He’d led CoreLogic since it
separated from FAF in 2010. “The news today is very sad,” FAF Chairman Parker Kennedy told The Title Report. “Anand and I worked together closely for many years and he was a great friend. Every position that he held at First American he handled beautifully. As CEO of CoreLogic, he could not have been better. Most importantly, he was an extremely good and honest man and a great husband and father. I will miss him very much.”
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TOPSTORIES FAF CEO Dennis Gilmore said Nallathambi will be greatly missed. “Anand’s passing is a tremendous loss and our thoughts and prayers are with his wife and family at this very difficult time. Anand’s vision and leadership at CoreLogic and his many contributions to First American deservedly cemented him as an icon in the real estate industry,” Gilmore said. CoreLogic, which provides real estate information to companies in real estate, mortgage finance, insurance and capital markets, called Nallathambi’s death “unexpected.” CoreLogic Chairman of the Board Paul Folino credited Nallathambi with turning the company into to a highperforming leader in the housing market. “Anand led CoreLogic from its inception as a public company in June 2010 to a high-performing leader in the housing market,” Folino said in a press release. “Anand was an outstanding leader, and we will miss his many talents, energy and can-do spirit. Our thoughts are with Anand’s family and friends.” CoreLogic named Frank Martell president and CEO on Monday and appointed him to its board. In February,
CoreLogic appointed Martell to serve as interim president, CEO, and interim principal executive officer during Nallathambi’s absence. Martell previously served as chief operating officer (COO). “Anand was truly a very special and unique man. Anand led the transformation of CoreLogic into a leader in the global housing ecosystem,” Martell said. “He was one of those extraordinary people that everyone loved and wanted to be around. I will so miss him – his great warmth, grace, integrity and our close friendship.” Survived by his wife and two children, Nallathambi served as president and COO of First American’s Information Solutions Group from 2009-2010. Prior to that, from 2007 to 2009, he served as CEO of First Advantage Corporation (FADV) and was also a member of FADV’s board of directors from 2005 to 2007. He also served as president of First American Appraisal Services, and on the board of directors of the Consumer Data Industry Association. Nallathambi earned an economics degree in India and an MBA from California Lutheran University.
Housing demand should extend industry momentum Despite expected increases in interest rates, growth in wages and declining unemployment may propel an increase in total direct premiums for title insurers in 2017, according to an A.M. Best analyst. Speaking in response to a recently released A.M. Best special report, Senior Industry Research Analyst David Blades said wage increases and the continuing recovery of the broad economy could offset any negative impact on title premiums caused by rising mortgage rates. “Overall in the last few years, except for a dip in 2014, premiums in the title insurance industry have continued to go up from a year-over-year basis,” Blades said on A.M. BestTV. “Through the third quarter of 2016, total direct premiums for the title insurance industry were up by 13 percent. Additionally, the current premium level is definitely well below that seen in 2005 at the end of the last housing boom. However, it has been increasing in the last several years.” Blades speculated that increased buying power for consumers will spur more home sales, leading to more business for title insurers and increasing premiums.
His comments followed the release of A.M. Best’s report, “Rising Mortgage Rates Could Dampen Housing Market Potential and Stall Title Insurance Market Growth.” That report speculated that rising mortgage rates driven by expected Federal Reserve Bank rate increases could slow the title insurance market in 2017 by decreasing sales of both existing and new homes. Although premiums written by title insurers have increased for three consecutive years, the report said that momentum might be stalled if mortgage rates continue to rise. According to the report, rising mortgage rates could result in fewer homes available for purchase, higher prices for those homes and declining affordability for consumers. However, A.M. Best also has forecast an increase in the Gross Domestic Product in 2017 and a decrease in unemployment. “(A) stronger labor market should correspond with buyers having more money in their pockets,” Blades said. “That could increase interest in home buying and ultimately benefit title insurers.”
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INDUSTRYNEWS reQuire completes Deeds on Demand purchase Require Holdings, LLC has completed its acquisition of Deeds on Demand, the first Internet-based deed and real estate document service, the company announced. Terms of the deal were not disclosed.
attorneys by providing a wider array of products and services they need to serve their clients,” reQuire Real Estate Solutions Chief Operating Officer Shannon Cobb said in a release.
Deeds on Demand will become part of reQuire Real Estate Solutions, LLC, a wholly owned subsidiary of Require Holdings. reQuire provides settlement agents and closing attorneys with one-stop access to document preparation, property search, title curative and lien release tracking solutions.
In 2016, Require Holdings acquired Covius Real Estate Services, LLC and Covius Technology Solutions, LLC.
“This acquisition accelerates our objective of bringing higher value to lenders, settlement agents, and closing
“We remain focused on being a preferred provider of diversified tech-enabled real estate transaction services to the industry,” Require Holdings CEO Al Will said. “We intend to continue this diversification through both organic product development and additional acquisitions to better serve lenders and settlement agents.”
Title Resource Group drives Realogy’s profits Driven by recent acquisitions and strong volume, Title Resource Group, a division of Realogy Holdings Corp., saw 2016 revenues rise 18 percent to $573 million, compared with $487 million the prior year, the company announced. TRG’s 2016 profits rose 15 percent to 463 million, compared with $48 million in 2015. “Half of the operating EBIDTA improvement was due to higher purchase refinancing and underwriting volume, and the remainder from its acquisitions of TitleOne and Independence Title,” Realogy Executive Vice President, Chief Financial Officer and Treasurer Anthony E. Hull said during a call with analysts. “Based on current market conditions, we expect a slowdown in refinance volume to be a headwind for TRG in 2017 but we should see overall growth in our title and settlement services segment.” In 2016, TRG recorded 204,000 transactions, including a 17 percent increase in purchase units and a 32 percent increase in refinance units compared with 2015. Realogy Chairman, CEO and President Richard A. Smith said the company will continue to look for attractive
acquisitions in 2017. “We’ll continue to focus on tuck-in acquisitions where it makes sense. TRG has done a terrific job of acquiring very attractive companies,” Smith said during the call. “They are really working hard to ensure that the acquisitions that have occurred up to this point are synergized, fully operating within the guidelines we established for that type of acquisition and they’ll be very selective as well.” Overall, Realogy’s 2016 revenues increased 2 percent to $5.81 billion and profits jumped 16 percent to $213 million, both compared with 2015. Smith was asked on the call about what he was looking for this year in terms of regulatory changes from the new administration. “If I’ve learned anything recently it’s not to speculate about what may be happening in Washington D.C. That said, any change in the regulatory environment that would be helpful to housing we strongly support,” he said. “Obviously the ones we pay attention to are generally Dodd-Frank related, but they also pertain to the governance of FHA, Fannie and Freddie. We’re actively involved and we look forward to a better regulatory environment for housing.”
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INDUSTRYNEWS Small businesses ‘drowning’ in regulations Nearly half of all small-business owners identify government regulations as either a “somewhat serious” or a “very serious” burden, according to research by the National Federation of Independent Business (NFIB). Of the small-business owners surveyed by NFIB, owners of businesses with between 20 and 249 employees complained the most about regulations imposed by local, state and federal officials. Thirty-eight percent of that group called regulations a “very serious problem” and 26 percent said they were a “somewhat serious” problem. “Small business owners are drowning in regulations imposed by every level of government,” NFIB President and CEO Juanita Duggan said in a press release. “It’s a major problem affecting millions of businesses, and the federal government is the biggest contributor.” NFIB Research Director Holly Wade said some regulations discourage businesses from adding jobs. “Regulations are a problem for employers in every size cohort, but the pain gets more intense with more employees. This creates a clear disincentive to add jobs, and overregulation should be the first consideration for policymakers,” Wade said. Small-business owners most often cited the cost of implementing regulations as the biggest problem (28 percent), followed by understanding how to comply with
regulations (18 percent), preparing the paperwork mandated by regulations (17 percent) and time delays caused by regulations (10 percent). More than half of the business owners surveyed said the number of regulations with which they must comply have increased in the past three years. “In simple terms, regulatory compliance uses valuable human and financial capital, which is in short supply for small employers,” Wade said. “Regulations drain trillions of dollars from the economy and the value of many is questionable. Employers and the public are not getting their money’s worth.” According to the NFIB survey: • In the past year, government officials have visited onethird of small businesses to check compliance, including examining records and/or licenses. • Forty-one percent of respondents have contacted a government agency to request help complying with regulations, with a mere 19 percent of those reporting being very satisfied with the experience. • In the past three years, less than 10 percent of smallbusiness owners were fined, sued, or penalized for regulatory violations. • Thirty-one percent of respondents say the regulations are of little or no value to customers or consumers and not worth the cost.
Attorneys Title reports best year since 2004 Driven by reduced claims and the company’s expansion into additional states, net profits for Attorneys Title Guaranty Fund, Inc. (ATGF) last year increased to their highest level since 2004, ATGF President Eric Morgan announced.
“We had a very successful year on a number of fronts, including expanding our agent base and gaining our certificate of authority to operate as an underwriter in two additional states, which is already boosting our bottom line,” Morgan said in a press release.
ATGF’s net profits for 2016 jumped nearly 700 percent to $533,870. In 2015, the company reported a $94,676 loss in net profits. The profit gains came despite revenues decreasing nearly 6 percent to $14.4 million in 2016, compared with the previous year.
Morgan said ATGF’s web-based title production and underwriting system has been the primary driver of the company’s recent success. “It has had a tremendous impact in several ways, including a dramatic reduction in claims expense in recent policy years since we moved all our agents onto the system,” Morgan said. “It’s also created tremendous efficiencies for both ATGF and our agents.”
Morgan attributed the increase in profits to reduced claims on business done through ATGF’s proprietary title software and to obtaining licenses in two additional states.
The system is provided to agents free of charge, a policy Morgan said reflects the company’s commitment to independent agents.
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INDUSTRYNEWS Black Knight profits up 129 percent Black Knight Financial Services, Inc.’s yearly revenues increased 10 percent to $1.026 billion in 2016 from $930.7 million the previous year. Driven by new clients and the introduction of new products, Black Knight’s net earnings for 2016 jumped 129 percent to $45.8 million, compared with $20 million in the prior year. “[Last year] was an exceptional year for Black Knight as we delivered strong results that exceeded the expectations that we had outlined at the beginning of the year,” Black Knight Executive Chairman Bill Foley said during a conference call with analysts, according to a transcript of the call from Seeking Alpha. “In addition, we continued to execute on our strategic initiatives to drive organic growth through selling to existing clients, winning new clients in existing markets and the introduction of new products. Our significant implementation pipeline, driven by new client wins such as with Bank of America, JPMorgan Chase and PNC Bank, provides us with the confidence to deliver on our expectations for 2017 and beyond,” Foley said, according to the Seeking Alpha transcript. Black Knight’s revenues percentage increase for the fourth
quarter of 2016 mirrored its yearly results, increasing 10 percent to $261.5 million from $237.8 million in the prior year quarter. Net earnings for the fourth quarter were up 20.4 percent to $11.8 million, compared with $9.8 million in the prior year quarter. “We are pleased with the consistent strength of our results in the fourth quarter, which included adjusted revenues growth of 10 percent and adjusted EBITDA growth of 8 percent,” Black Knight President and CEO Tom Sanzone said, according to the Seeking Alpha transcript. Black Knight is scheduled to become a fully independent company later this year. In 2015, Black Knight was spun off from Fidelity National Financial with its own board and executive officers. Last year, Fidelity announced plans to distribute all 83.3 million shares of its stock in Black Knight to shareholders of FNF Group. Fidelity held about a 54 percent share in the company, and divestiture is a tax-free distribution of shares valued at more than $3 billion. That distribution is expected to close during the third quarter of 2017.
IBERIABANK title revenues decline IBERIABANK Corp.’s title revenues decreased 2 percent during the fourth quarter of 2016, dipping to $5.325 million compared with $5.435 million earned the previous year.
be temporary compression of our net interest margin until the excess liquidity is fully deployed,” Byrd said, according to the transcript.
For the entire year, IBERIABANK’s title revenues dropped 3 percent to $22.213 million from $22.837 in 2015.
IBERIABANK’s 2016 core earnings increased to $184.1 million, up 14 percent compared with 2015. Core EPS for 2016 rose to $4.43 per common share, up 6 percent compared with 2015. Both core earnings and Core EPS in 2016 were record results. For the fourth quarter, income declined 4 percent.
However, IBERIABANK reported overall year-to-year increases in both profits and core earnings for its entire business, which includes 199 bank branch offices and 24 title insurance offices. “Despite typical seasonal softness in our mortgage and title businesses, we delivered our second highest level of quarterly core EPS (earnings per share) in our company’s history, and we demonstrated our sustained focus on efficiency,” IBERIABANK President and CEO Daryl G. Byrd said during a call with analysts, according to a transcript of the call from Seeking Alpha. “We experienced an abundance of liquidity driven by record organic deposit growth, the byproduct of which will
IBERIABANK also announced an agreement to acquire Sabadell United Bank, N.A. from Banco Sabadell for stock and cash valued at $1.025 billion. The deal is expected to close in the second half of 2017. Headquartered in Miami, Sabadell United has 26 branches in Dade, Broward, Palm Beach, Hillsborough, Sarasota, and Collier counties in Florida. Sabadell United will be merged with and into IBERIABANK.
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INDUSTRYNEWS “With a population of over 6 million people, the greater Miami area is a dynamic market with a strong concentration of commercial and industrial clients that are particularly attractive to us,” Byrd said in a press release.
“Sabadell United’s deep commercial and retail lending base, combined with strong core deposit funding and quality credit underwriting, provides an excellent fit with our unique culture and business model.”
Old Republic expands board Old Republic International Corp., the parent company of Old Republic Title Insurance Group, has appointed Steven J. Bateman as new independent director. The action was taken during the board’s regularly scheduled board meeting in February. Bateman’s appointment increases to 12 the size of the company’s board. A retired audit partner of PricewaterhouseCoopers, Bateman has more than 37 years of audit and business-advisory experience. The company’s announcement noted that Bateman’s
“wide-ranging experience in the service of a large number of organizations engaged in all major insurance fields will harmonize extremely well with Old Republic’s board governance objectives.” Also during the meeting, the board declared a quarterly cash dividend of 19 cents per share on its common stock The full-year cash dividend will amount to 76 cents per share compared with 75 cents per share in 2016. Old Republic has increased its cash dividend for 36 consecutive years.
TitleSmart moves its headquarters Since its launch in 2007, TitleSmart, Inc. has expanded from three employees to more than 60 at six locations near and throughout the Minneapolis metropolitan area. As a result, TitleSmart has moved its corporate headquarters from Maplewood, Minn. to White Bear Lake, Minn. The company now is headquartered at 4810 White Bear Parkway, No. 100, White Bear Lake, Minn. “For the past 10 years, we have worked to elevate the level of customer service in the title industry,” TitleSmart President Cindy Koebele said in a press release. “We are extremely grateful for our staff, customers, and creative
vendor partners who have embraced and supported us in our mission to transform real estate transactions into outstanding customer experiences. The relocation of our corporate headquarters allows us to accelerate our growth and continue our relentless pursuit to add value for our customers.” TitleSmart’s new headquarters includes a larger lobby, redesigned conference rooms, more workspace, a new break room and a wellness center for employees The company will celebrate its 10th anniversary with a ribbon-cutting and open house May 4.
Stewart, ClosingCorp link networks Rates and fees from Stewart’s nationwide network of title offices now are available through ClosingCorp’s SmartFees platform, the companies announced. The integration will enable SmartFees users to retrieve information from Stewart for Loan Estimates and closings. “Our lender clients nationwide now have the ability to quickly and easily obtain accurate quotes for our entire menu of title products through ClosingCorp’s SmartFees solution,” Stewart Senior Vice President Bill Sullivan said in a press release. “We are committed to helping lenders accurately estimate title rates and fees of real estate
transactions for consumers and make this information transparent and easy to understand. Our alliance with ClosingCorp is just one of the ways we’re doing this.” SmartFees integrates loan file information, transfer tax, recording data, service fees and lender business rules and requirements in a single process. “Both ClosingCorp and Stewart are dedicated to providing lenders solutions that help automate the residential real estate transaction process while increasing efficiencies, providing an enhanced borrower experience and remaining compliant at all times,” ClosingCorp CEO Bob Jennings said.
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TECHNOLOGY First American Mortgage debuts management system First American Mortgage Solutions, LLC, a subsidiary of First American Financial Corp., has introduced a collateral file management system designed to mitigate risks by identifying and curing imperfections. CleanFile Solutions combines post-closing document management, loan quality control, file perfection, lien release preparation and recording in a single, vertically integrated suite. It features document retrieval and retention, imaging, assignment preparation, title policy retrieval and replacement. “CleanFile Solutions provides lenders and servicers with a unique set of post-closing capabilities combined with
the confidence of working with First American. We now have the ability to close loan perfection gaps and complete collateral files at whatever scale needed,” First American Mortgage Solutions President Kevin Wall said in a press release. “The more we can do for our lender and servicer clients to help achieve total loan quality, regulatory compliance and file perfection, the more they can focus on driving productivity and consumer satisfaction.” Powered by First American’s real estate document repository, CleanFile also will provide users with the postclosing and document management resources which First American acquired with its 2016 purchase of TD Service Financial Corp.
CoreLogic introduces Property Tax Estimator CoreLogic has launched Property Tax Estimator (PTI), an automated solution designed to provide better data to underwriters and mortgage servicers. According to CoreLogic, PTI will improve the accuracy of Loan Estimates. It is especially useful for estimating taxes for new construction loans, in cases where taxes can increase dramatically after a sale or transfer of ownership, and in areas with caps on annual increases for existing homeowners. “The tax estimating process is critical to several stages of the mortgage cycle – disclosures, underwriting and servicing. Accurate tax estimates help deliver the right
blend of quality, performance and efficiency required for optimizing the borrower experience while minimizing compliance risk,” CoreLogic Vice President, Tax Service Operations Kirk Randlett stated in a press release. “Property Tax Estimator brings the full value of CoreLogic data capabilities in an electronic data interchange solution that can be integrated with a lender’s system,” he said. CoreLogic said PTI will help underwriters qualify the borrower’s ability to financially support all mortgage costs and improve the onboarding process for servicers. PTI eliminates the need for any specialized skills required for data procurement and provides a consistent workflow process no matter the property, exemption status, county exception complexity, and loan officer tenure.
Ellie Mae incorporates Indecomm technology Indecomm Global Services’ income calculation and analysis platform, IncomeGenius, now is available through Ellie Mae’s all-in-one mortgage management solution Encompass. The integration will enable Encompass users to improve their underwriting process by performing income analyses during the loan origination process, the companies stated. Encompass is a comprehensive mortgage management solution that allows banks, credit unions and mortgage lenders to originate and fund mortgages and improve
compliance, loan quality and efficiency. “Indecomm Global Services is delighted to partner with Ellie Mae,” Indecomm Global Services CEO Rajan Nair said in a press release. “Our secure, seamless integration with Encompass enables our clients to simplify the process of ordering an income calculation through IncomeGenius, so they can more efficiently process mortgage loans and grow their business.”
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TECHNOLOGY Premium Title integrates LendingQB Premium Title has integrated LendingQB’s end-to-end, browser-based loan origination system (LOS). Premium said the integration will help customers obtain title and settlement quotes faster, place orders with the company, and receive a title fee certificate guaranteeing fees for 30 days. LendingQB’s LOS also assists with TILA-RESPA Integrated Disclosure forms and faster disclosure timelines by maintaining Loan Estimates and any adjustments in fees associated with the loan. “Teaming up with LendingQB allows us to expand our
network by providing customers with greater access to our exceptional title services and solutions,” Premium Title President James A. Weld said in a press release. “The positive feedback from our beta customers helps confirm that this integration is adding quality and efficiency to the loan origination process.” “We are pleased to offer Premium Title’s services through our loan origination system,” LendingQB President Tim Nguyen said in a press release. “This integration is a prime example of our best-of-breed strategy that will provide lenders with the ease of researching fees, ordering title services and receiving documents directly from Premium Title.”
OurRecords compliance management system integrates North American Title Co. (NATC) has implemented the OurRecords compliance management system. OurRecords automates the onboarding, document submission, review, approval and maintenance of business partner compliance. The system keeps each business partner’s profile and all submissions and communications secure. “Our solution allows NATC to create criteria around different groups of vendors, depending on the level of credentialing needed,” co-founder and OurRecords CEO Bill Hall said in a press release. “For instance, each state or underwriter may have different prerequisites for signing services. The requirements can be easily customized to
each of those parameters.” OurRecords also notifies parties when new documentation is needed. The compliance management system will allow NATC to request and secure credential requirements, forms, manuals, procedures and policies from third-party vendors and contractors. “The title industry has always had many, complex moving parts,” NATC Senior Vice President Tiffany Bertling said. “OurRecords has met all of our criteria for a truly highperformance system that ensures all of our requirements – both internal and external – are met and verified within one system.”
Fannie Mae selects eOriginal for eVault Fannie Mae has selected eOriginal, Inc. as technology solutions provider for the agency’s electronic vault. eOriginal will be responsible for providing a secure platform for eNotes during Fannie Mae’s eMortgage process. “With eMortgage, lenders and borrowers get freedom from paper-based processes at the closing table, leading to a better borrower experience and increased operational efficiencies for lenders,” Fannie Mae Vice President of Customer Digital Experience Cindy McKissock said in a press release.
“We continually look for ways to help lenders who want to deliver an end-to-end digital mortgage experience. In addition to investing in new eVault infrastructure, we are also simplifying eMortgage adoption by transitioning to the MISMO SMART Doc Version 3.0 format in 2017,” McKissock said. “This will reduce complexity and allow lenders and technology solution providers to adopt eMortgage with greater ease.” eOriginal General Manager of Digital Mortgage Simon Moir said it’s time for all lenders to embrace the digital mortgage process.
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TECHNOLOGY “Fannie Mae’s commitment to electronic mortgage is further evidence that the industry is ready for a digital transformation that can improve the borrower experience and deliver operational and capital efficiencies to the lender,” Moir said. Fannie Mae said the selection of eOriginal – and its move to cloud-based, vendor-hosted solutions – will help it accelerate deployment and greatly reduce costs.
of eMortgages, we are investing in the digital mortgage ecosystem now to meet the needs of the industry,” Fannie Mae eMortgage Product Manager Michael Cafferky said in the press release. “The eMortgage process supports our customers’ desires to provide a better solution to borrowers, eliminate inefficiencies in the mortgage process, and increase velocity of capital through faster delivery into the secondary market. Everyone wins with an eMortgage process,” Cafferky said.
“As Fannie Mae continues to see the accelerated adoption
ePN network adds 25 counties ePN announced that 25 counties throughout the United States joined its eRecording network during January and February.
offices. They see and appreciate the true value and benefits eRecording offers,” ePN President Jerry Lewallen said in a press release.
The new counties are in Alabama, California, Connecticut, Georgia, Illinois, Louisiana, New Hampshire, Ohio, Oregon, Wyoming, Tennessee, Wisconsin and South Carolina.
“ePN is excited to have a significant role in providing a key solution.”
“Counties of all sizes are embracing eRecording in their
ePN enables closing agents to upload scanned documents to its website and submit those documents directly to county recorders.
Entrust, LandTech announce integration Entrust Property Research (EPR), a provider of municipal lien searches, has integrated with LandTech Data Services.
unrecorded municipal liens and debts on residential and commercial properties.
LandTech users now can order EPR municipal lien searches from within their closing file. “The integration with [EPR] enhances our software capabilities while adding value to the client,” LandTech Managing Partner Ben Bell said in a press release.
“This is really exciting,” EPR Managing Member Jonathan Yasko said. “LandTech is our first integration and will definitely progress us to the next step as being the preferred lien search provider. Making the customer interaction more convenient with ordering directly from the software creates efficiencies and streamlines the overall process.”
Based in Orlando, Fla., EPR services title companies and real estate attorneys nationwide. Their custom reports find
Cyberattacks top list of business fears Nearly 9 out of 10 businesses perceive cyberattacks as the top threat they face, according to a study published by the Business Continuity Institute (BCI) in association with the British Standards Institution (BSI). Eighty-eight percent of businesses surveyed by the Horizon Scan Report were extremely concerned or concerned about the possibility of a cyberattack. Data breaches (81 percent) and IT and telecom outages (80 percent) were the second and third top threats identified.
“Given the diversity of the threats out there, it is absolutely essential to adopt agile and dynamic responses. Planning to recover from a data breach is very different from planning for the aftermath of a terrorist attack, and, as this year’s report highlights, the risk spectrum can be very broad,” BCI Executive Director David Thorp said in a press release. “Malicious Internet actors, political shake-ups, and climate change are all amongst the main worries for societies around the world.”
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PEOPLEONTHEMOVE Following cyberattacks, data breaches and IT and telecom outages, businesses cited security incidents, adverse weather, interruption to utility supply, terrorism, supply chain disruption, availability of key skills and new laws or regulations as their top perceived threats. New laws and regulations were cited by businesses as a top-10 concern for the first time in the study’s history.
decrease in the businesses (60 percent) using long-term trend analysis to assess and understand threats.
When businesses were asked which disruptions had been experienced in the past year, unplanned IT and telecom outages topped the list followed by interruptions to utility supply and cyberattacks. The survey also identified a
“Ultimately, organizations must recognize that, while there is risk, and plenty of it, there is also opportunity. Taking advantage of this means that leaders can steer their businesses to not just survive, but thrive.”
“We remain concerned to see that businesses are still not fully utilizing the information available to them to identify and remedy weaknesses in their organizational resilience,” BSI CEO Howard Kerr said in a press release.
Hillsborough Title names president Hillsborough Title Family of Companies (HTFC) has promoted Amy Gregory to president. Gregory is a 10-year veteran of HTFC, the founding title conglomerate of the Florida Agency Network (FAN) that includes Hillsborough Title, Paramount Title, Tampa Bay Title, Cornerstone Title and Stronghold Title. “This is a natural fit and progression for Amy. There has never been a more committed or deserving person for this opportunity. She has been my right hand since the day she started, and has been the anchor for this organization for many years. There is no other person I would trust taking over the reins of our family business than Amy,” Florida Agency Network CEO Aaron Davis stated in a press release.
As president, Gregory will be responsible for evaluating and improving overall operation effectiveness and implementing the organization’s culture, vision, mission and values. She previously served as general manager of Hillsborough Title and as operations manager for HTFC and FAN’s title support services. “I am honored for this opportunity to lead such a talented group of people in this new role. Since starting almost a decade ago, I knew Aaron had an excellent vision for the company’s future and I felt it would be a great fit for my career goals,” Gregory said. “This company is truly a family to me. We have the most amazing team members and I am excited for what the future holds for all of us.”
Title Alliance appoints Arizona state manager Title Alliance, Ltd has appointed Robert L. Grove as Arizona state manager, continuing the company’s expansion in that state which began in December 2015. As state manager, Grove’s responsibilities will include recruiting talent; aligning the company with quality prospects; educating on compliance; and focusing on streamlining systems and processes in the Arizona operations. “Over the past 15 months, we have had a significant presence in the Arizona market,” Title Alliance Director of Sales and Marketing Lindsay Smith said in a press release. “I knew that, in order for us to provide our partners and clients with the ultimate level of service, that we needed to find a high-caliber state manager to help with our operations on the ground.” Grove has 40 years of experience in title, escrow and real
estate, including 17 years in the joint ventured environment. He began his career as an escrow officer in San Francisco, and has worked in Arizona, California, Texas, New Mexico and Nevada. “We met Bob and quickly realized that the knowledge that he brought to the table, his personal and professional belief system, and the respect that he commands in the industry would make him the perfect addition to our team,” Smith said. Grove called Title Alliance a good fit. “I spent many years in the industry and from the first moment I sat down with Title Alliance I knew that they were the people with whom I would finish my career,” Grove said. “I have a lot of experience working inside of the joint ventured arena. I know what works and I’m excited to build successful teams for our Title Alliance operations in Arizona.”
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NS3...AT THE CENTER 2017 NATIONAL SETTLEMENT SERVICES SUMMIT (NS3) JUN E 7 - 9 , 2 0 17 | SAN ANTON IO, TX
Lenders At The Center of Wednesday’s NS3 Put yourself At the Center of the real estate transaction by joining us on Wednesday, June 7 for a pair of sessions focusing on eClosings. Lenders from across the country will share why they are all-in and how more title agents can work with lenders on the eClosings initiative. Fannie Mae and Freddie Mac representatives will also be on hand to discuss the secondary market as it plays a more pivotal role, including Senior Vice President and Chief Economist Doug Duncan who will headline the day, discussing economic and consumer trends driving the mortgage and housing market. An Open Forum discussion will take place later in the day, focusing on today’s hot regulatory and compliance topics. Attendees will have the opportunity to contribute ideas and have their voices heard.
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PEOPLEONTHEMOVE AmTrust hires New York agency manager AmTrust Title Insurance Co. has hired Frank Russo as its New York state agency manager. As state agency manager, Russo will be responsible for growing AmTrust throughout New York, maximizing profitability, optimizing opportunities in technology, serving existing clients and attracting new ones. “New York is a crucial market for us,” AmTrust Title President Jason Gordon said in a press release. “We are headquartered in Lower Manhattan with an office in
Midtown and a large percentage of our clients operate throughout the Greater New York Metro area. Resultsoriented, talented, a dedicated professional and a great communicator, Frank understands our culture and is a valuable asset to our business development team.” Prior to joining the company, Russo served as director of business development for S.J. Carroll Jr., Inc. in New York, and as director of recreational therapy for Holy Family Home in New York.
ClosingCorp names senior VP ClosingCorp has named Craig Austin senior vice president of sales and business development. In his new role, Austin will lead the company’s sales organization, develop customer acquisition strategies, and service relationships with loan origination systems and settlement service portals. He will report directly to ClosingCorp CEO Bob Jennings. “Craig is a natural sales leader with strong connections to the mortgage industry,” Jennings said in a press release.
“He has an outstanding track record of developing strong customer relationships and fostering a high level of customer satisfaction. “The reaction from key clients about the change has been overwhelmingly positive, I am confident that Craig will be a vital asset to ClosingCorp’s continued success.” Prior to joining ClosingCorp, Austin held sales and account management positions at Black Knight Financial Services, Inc., including vice president of sales.
Loan originations at highest level in three years Despite a dip in the fourth quarter, the number of mortgage loans originated in the U.S. last year climbed to its highest total since 2013, according to ATTOM Data Solutions. ATTOM’s 2016 U.S. Residential Property Loan Origination Report found that 1.7 million loans were originated on residential properties in the fourth quarter of 2016. That represents a 15 percent decrease from the previous quarter but a 2 percent increase year-over-year. For the year, 7.3 million loans originated in 2016, 2 percent more than 2015. “Refinance originations continued to post strong numbers compared to a year ago in the fourth quarter, even as purchase originations decreased on a year-over-year basis for the second consecutive quarter,” ATTOM Data Solutions Senior Vice President Daren Blomquist said in a press release. “The increase in refinance originations is surprising given the rising interest rates in the fourth quarter, but many homeowners may have been trying to lock in still relatively low interest rates before those interest rates rose further,”
Blomquist said. According to the report, the areas with the largest yearover-year percentage increases in mortgage originations were Olympia, Wash. (27 percent); Memphis, Tenn. (18 percent); Bremerton, Wash. (18 percent); Spokane, Wash. (18 percent); and Kansas City, Mo. (17 percent). Areas with largest year-over-year percentage decreases in mortgage originations were Naples, Fla. (23 percent); Austin, Texas (20 percent); Fort Collins, Colo. (19 percent); San Antonio (18 percent); and Reno, Nev. 15 percent). The report listed Quicken Loans, Caliber Home Loans, Wells Fargo, Fairway and JP Morgan Chase as the top purchase loan originators during the fourth quarter. For 2016, home equity lines of credit (HELOCs) increased 2 percent from 2015 to 1,189,867, the report said. HELOCS had their biggest year-over-year increases in Flint, Mich. (26 percent); Salt Lake City, Utah (26 percent); Birmingham, Ala. (24 percent); Anchorage, Alaska (22 percent); and Dallas-Fort Worth, Texas (20 percent).
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MARKETDATA Home inventory shortage causing ‘matching-trap’ Current homebuyers were reluctant to sell homes in January because of fears they might not find a home to buy, according to First American Financial (FAF) Corp. Chief Economist Mark Fleming. Fleming said the so-called “match-trap” was caused by higher mortgage rates which made homes less affordable and discouraged some sellers and buyers. According to FAF’s January Potential Homes Sales model, potential existing-home sales decreased to a 5.5 million seasonally adjusted, annualized rate (SAAR). The January SAAR was an 81.7 percent increase from the market potential low point in December 2008. In January 2017, the market potential for existing-home sales decreased to 107,000 (SAAR) sales, 1.9 percent below January 2016. “While higher mortgage rates did reduce the market’s potential, they also will have the positive effect of moderating house price appreciation,” Fleming said in a press release.
Fleming said rising mortgage rates decreased affordability and reduced first-time homebuyer demand. “The low inventory of homes for sale, currently 3.6 months’ supply, continues to be a concern,” Fleming said. “Tight supply accompanied by rising prices is more indicative of a market reacting to a shift in the willingness of homeowners to list their homes for sale, and less indicative of a market reacting to a shortage of demand due to affordability issues. Restricted demand would result in lower quantity of homes for sale and lower, not higher, prices.”
“While higher mortgage rates did reduce the market’s potential, they also will have the positive effect of moderating house price appreciation. More troubling is the lack of homes for sale, which is causing a ‘matching-trap’ where current homeowners are reluctant to sell because of concerns about the ability to find a home to buy.” Mark Fleming, Chief Economist First American Financial Corp.
“More troubling is the lack of homes for sale, which is causing a ‘matching-trap’ where current homeowners are reluctant to sell because of concerns about the ability to find a home to buy and the likelihood that their new mortgage will have a higher rate than their existing mortgage.”
Millennials drove January housing market The percentage of mortgages issued to millennials continued to climb in January, with the group accounting for 84 percent of closed loans, according to the latest Ellie Mae Millennial Tracker. Ellie Mae said millennials accounted for 82 percent of closed loans in December 2016 and 77 percent from August 2016 through November 2016.
“It is not surprising to see millennial borrowers leverage FHA loans because they typically offer lower downpayments and lower average FICO score requirements than conventional loans. As more millennials enter the market, we expect to see the popularity of FHA loans continue to increase.” Ellie Mae’s tracker also found that the average FICO score of January borrowers was 724.
Thirty-five percent of loans issued to millennials during January were from the Federal Housing Administration (FHA), up from 34 percent in December 2016.
That was down slightly from their peak of 726 from August 2016 through October 2016.
“As the purchase market heats up, we will continue to watch the FHA purchase trend amongst millennials,” Ellie Mae Executive Vice President of Corporate Strategy Joe Tyrrell said in a press release.
Additionally, the report found, the time it took millennials to close loans during January (49 days) was a day longer than the process took during November 2016 and December 2016.
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MARKETDATA Loan defects up in January Mortgage applications with defects, fraud or misinformation increased 5.8 percent in January, according to First American Financial Corp. While the First American Loan Application Defect Index for January 2017 found an increase in problem mortgage applications compared with December 2016, the Defect Index decreased 3.9 percent year-over-year, and is 28.4 percent below the index’s high point in October 2013. First American Chief Economist Mark Fleming attributed January’s increase to a declining percentage of refinances. “The overall index increase is largely the result of waning refinance activity in the mortgage market,” Fleming said in a press release.
“Defect, misrepresentation and fraud risk is significantly lower on refinance transactions, so the increased risk of misrepresentation and fraud is due to the increasing share of higher risk purchase transactions within the mortgage market.” “As the mortgage market composition continues to shift toward purchase transactions in 2017, the risk of defect, fraud and misrepresentation will also increase,” Fleming said. The index identified Wyoming (+32.2 percent), North Dakota (+29.0 percent), Montana (+27.3 percent), Mississippi (+25.4 percent) and Louisiana (+20.3 percent) as the states with the highest increase in mortgage applications with defects, fraud or misrepresentation.
Builder confidence down in February A lack of homebuyer traffic, developed lots and labor shortages led builder confidence in the market for new single family homes to decline slightly in February, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).
sales expectations for the next six months. An index score above 50 indicates more builders view market conditions as good than poor. Regionally, builders rated the Northeast a 50, the Midwest a 65, the South a 67 and the West a 79.
The HMI decreased two points to 65 in February compared with its 67 score in January. “While builders remain optimistic, we are seeing the numbers settling back into a normal range,” NAHB Chairman Granger MacDonald stated in a press release. “Regulatory burdens remain a major challenge to our industry, and NAHB looks forward to working with the new Congress and administration to help alleviate some of the pressures that are holding small businesses back and making homes less affordable.” NAHB Chief Economist Robert Dietz attributed February’s decline to less people shopping for new homes and builders struggling with labor shortages and fewer lots ready for building. “Despite these constraints, the overall housing market fundamentals remain strong and we expect to see continued growth this year as some of these concerns are addressed,” he said. The index is derived from a monthly NAHB survey that gauges builder perceptions of single family home sales and
“While builders remain optimistic, we are seeing the numbers settling back into a normal range. Regulatory burdens remain a major challenge to our industry, and NAHB looks forward to working with the new Congress and administration to help alleviate some of the pressures that are holding small businesses back and making homes less affordable.” Granger MacDonald, Chairman National Association of Home Builders
MARKETDATA Fannie Mae: Consumer confidence at record levels The Fannie Mae Home Purchase Sentiment Index (HPSI) rose 5.6 percent in February, reaching an all-time high of 88.3. Five of the six components the HPSI measures increased in February, as the percentage of Americans who think it’s a good time to buy or sell a home both increased.
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Additionally, a higher percentage of Americans reported having higher household incomes than a year ago. “The latest post-election surge in optimism puts the HPSI at its highest level since its starting point in 2011. Millennials showed especially strong increases in job confidence and income gains, a necessary precursor for increased housing demand from first-time homebuyers,” Fannie Mae Senior Vice President and Chief Economist Doug Duncan, who will be a featured speaker at the National Settlement Services Summit (NS3) in June, said in a press release. “Preliminary research results from our team find that millennials are accelerating the rate at which they move out of their parents’ homes and form new households,” Duncan said. “However, continued slow supply growth implies continued strong price appreciation and affordability constraints facing millennials and first-time buyers in
many markets.” The HPSI found: • The share of Americans who said February was a good time to buy a house rose 11 percent to 40 percent. • Those who said February was a good time to sell a house increased 7 percent to 22 percent. • Forty-five percent predicted home prices will increase. • The percentage who said they were not concerned about losing their job (78 percent) increased 9 percent.
Home prices up in January The amount Americans paid to purchase homes increased nearly 7 percent in January, according to the CoreLogic, which is forecasting that home prices will rise nearly 5 percent by next year. The CoreLogic Home Price Index (HPI) found that home prices nationwide, including distressed sales, rose 6.9 percent in January year-over-year. Home prices increased less than 1 percent from December 2016 to January 2017. “With lean for-sale inventories and low rental vacancy rates, many markets have seen housing prices outpace inflation,” CoreLogic Chief Economist Frank Nothaft said in a press release. CoreLogic is forecasting that home prices will increase by 4.8 percent on a year-over-year basis from January 2017 to January 2018. “Home prices continue to climb across the nation, and the spring home buying season is shaping up to be one of the
strongest in recent memory,” CoreLogic President and CEO Frank Martell said. “A potent mix of progressive economic recovery, demographics, tight housing stocks and continued low mortgage rates are expected to support this robust market outlook for the foreseeable future.” According to the HPI, the states with the largest yearover-year price increases were Washington (10.8 percent), Oregon (10.3 percent), South Dakota (9.1 percent), Colorado (9.1 percent), Idaho (9 percent), Utah (8 percent), Tennessee (7.4 percent), Florida (7.3 percent) and New York (7.1 percent).
“(T)he spring home buying season is shaping up to be one of the strongest in recent memory.” Frank Martell, President and CEO, CoreLogic