Wednesday, February 22, 2017

Training and Events, Fannie/Freddie Legal News Not Helping Stockholders



Are you lending in areas where LOs are receiving more calls from recruiters than they are from real estate agents? Let's hope not. But here's something else that's going on: a blockchain project for syndicated loans is in the works. The R3 consortium of major financial institutions plans to unveil a blockchain-based ledger for syndicated loans in March. Transactions in this $4.5 trillion industry are still largely conducted by fax and the new system promises dramatic improvements in settlement times and efficiency.
 In wholesale news for brokers, the Product Development Team at WESTERN BANCORP is pleased to announce the release of the JUMBO 2 HIGH LTV, NO MI PROGRAM. In addition to the High LTV, No MI option, the product features multiple characteristics not typically allowed on a Jumbo Loan. Program Highlights include 89.99% LTV to $1,500,000 with no mortgage insurance ;75% LTV to $1,000,000 with credit score of 700(Purchase or Rate/Term) and Permanent Resident Alien and H1-B Visa are eligible (80% LTV or less) This product is available for both our Wholesale and Non-Delegated Correspondent Customers and guidelines and pricing are available now in LMS Xpress.
 Upcoming training & events? You bet!
 Freddie Mac is offering free CreditSmart® counselor training next month. Its multi-lingual financial education curriculum and consumer outreach initiative teaches consumers life-long money management skills. Housing counselors will learn how to help consumers build and maintain better credit, make sound financial decisions and understand the steps to sustainable homeownership. They'll be taught best practices for facilitating counseling workshops and they'll be provided with teaching tools.
 Registration is underway for the ABA Real Estate Conference (March 29-31) in Orlando, FL. This premiere conference for banks engaged in residential and commercial mortgages, offers the full range of perspectives and insights of what is affecting institutions today. This year's conference will feature Outlook from Lawrence Yun, Realtors' Chief Economist, Industry insights from Rob Chrisman, Best Business Practices and Strategies, New Technology Solutions, New HMDA Rules and so much more.
 There is still time to register for California MBA's February 23rd Social Media Compliance Webinar.
 John Seroka of Seroka Brand Development, a premier provider of brand development and marketing, PR, digital and social media services to the mortgage industry, will be conducting a webinar for members of The Mortgage Collaborative on Thursday at 11:00 entitled "Launching an Effective Social Media Program." It will cover where to be active, getting your website social-ready, content strategy and content promotion. If you would like to attend, you may register at this link.
 If you're near Albuquerque, New Mexico, in a couple weeks, or want to visit it, the New Mexico Mortgage Lenders Association is having its March Luncheon with yours truly privileged to speak.
 Valuation Expo will be held March 18th-20th at the Caribe Royale Hotel in Orlando, FL. Join lenders, regulators, and valuation professionals at the nation's largest gathering of real estate appraisers. Offering 14 hours of continuing education for appraisers with sessions on how to streamline the appraisal process and addressing emerging issues in the industry.
 For better or worse, Fannie & Freddie can't stay out of the news.
 If my daughter lived with me, and through her job she paid me, oh, let's say $1 billion a month, would I be in a hurry to have her move out? Maybe not. Freddie Mac sent a $4.5 billion dividend to the Treasury after posting a sharp profit increase in its latest quarter and having its capital buffer legally decrease on schedule. Freddie reported Q4 profits of $4.85B, compared with a prior-year profit of $2.16B and a Q3 profits of $2.33B. And Fannie was no slouch, weighing in with a $5 billion 4th quarter profit. Hey, there's money in them thar mortgages! And so we find government-backed mortgage giants Fannie Mae and Freddie Mac paying a combined $10 billion in dividends to the U.S. Treasury.
 Recall that both sweep their profits to the government. New Treasury Sec. Steven Mnuchin said at his confirmation hearing that Fannie and Freddie shouldn't be left under government control "without a fix" but also said he didn't want to limit housing finance.
 The Federal Housing Finance Agency, which regulates Fannie and Freddie, has pushed so-called guarantee fees higher in a bid to draw more private companies into the housing system. One article I saw noted that, "That move hasn't done much so far - private-label securities represented just 1% of the market for new single-family mortgage-related issuance in 2016."
But the plot is thickening! Despite their business being stronger than ever (Fannie's single-family serious delinquency rate has dropped for 27 straight quarters, for example) the stock prices of both F&F tumbled Tuesday based on news from the court system. Hopes for privatization has lifted the over-the-counter shares of Fannie, up 6.7% this year, and Freddie, up 7%. But even with Republican control of both chambers of Congress, experts say pushing through legislation to privatize Fannie and Freddie will be difficult, mostly on concerns over how such a move would impact the housing market but also because of the hit to federal coffers.
 Yesterday a U.S. appeals court upheld a dismissal of hedge funds' claims against the U.S. government for seizing the profits of Freddie and Fannie. By a 2-1 vote, the U.S. Circuit Court of Appeals for the District of Columbia said a lower court had correctly barred claims that the government overstepped its authority in 2012 by eliminating dividend payouts to various shareholders and requiring the companies to pay an amount equal to their quarterly net worth to the U.S. Treasury. But investors in F&F can still pursue breach of contract claims, the appeals court said.
 Isaac Boltansky, with Compass Point Research and Trading, offered up some thoughts on the GSE shareholder decision, aka Perry v. Mnuchin. "The Perry decision is undeniably a body blow for GSE shareholders, but this ruling does not constitute a knockout, as there are still both legal and administrative avenues for shareholders...the political and structural underpinnings defining the GSE discussion remain largely intact following this order. There are three core components that drive this view. First, GSE shareholder litigation will persist in other courts despite this defeat. Second, the path to legislative reform remains narrow and murky. We maintain our view that comprehensive mortgage finance reform legislation - meaning a bill that alters either the charters or conservatorship - only has ~30% likelihood of enactment in this Congress. Third, our view remains that the odds of administrative action addressing the GSEs remain elevated under the Trump Administration. We believe the declining GSE capital buffers (hitting $0 in 2018), the potential impact of tax reform on Fannie and Freddie's deferred tax assets (~$54B in aggregate value), and the change in personnel could compel administrative policy shifts in the year ahead."
 Mr. Boltansky ends with some thoughts on where things go from here. "There are 3 separate issues to track going forward. First, in terms of the Perry case, our sense is that an appeal to the Supreme Court should be expected. Parties generally have 90 days from the judgment to file a writ of certiorari with the Supreme Court. Second, the other flagship GSE shareholder case - Fairholme v. USA - is still being considered in the U.S. Court of Federal Claims. As a reminder, this case centers on a takings claim and the parties are expected to file a joint status report on February 21. Third, despite this legal development, we maintain our view that the odds of administrative actions are elevated under the Trump Administration and expect increasing pressure to act over the balance of 2017."
 The markets are filled with capital
 The government released final data as of the end of 2016 of major foreign holders of Treasury securities and some interesting data surfaced. By amount, Japan edged out China, with both holding over $1 trillion each. Rounding out the top 5 were Ireland ($288B), Cayman Islands ($264B), and Brazil ($259B). Meanwhile, over the full year, countries that increased their holdings by the most YOY in percentage terms were: Thailand (+69%), Israel (+52%), Korea (+25%), Netherlands (+17%) and Italy (+15%). Meanwhile, countries that reduced their holdings the most YOY in percentage terms were: Mexico (-35%), Norway (-24%), China (-15%), Saudi Arabia (-14%) and United Arab Emirates (-13%). For the record, China's decline in absolute dollar volume was the largest in history.
 As far as interest rates on Tuesday, not much happened, and the 10-year yield closed nearly unchanged yielding 2.43%. Is everyone with their kids skiing on winter break? There was some slight shifting, just as there always is, between securities, coupons, and maturities, and the NY Fed was in buying its usual $1-2 billion a day. How long that lasts is causing some concern: mortgage investors are anxious about when and how Fed tapering occurs.
 I am hearing some dramatic drops in production, depending on location, and the MBA's mortgage application reflects that. It was down 2% last week, and apps are down 21% from a year ago. Refis are down 40% from a year ago.
 Coming up at 10AM ET is the National Association of Realtors' Existing Home Sales report for January. In the early going the 10-year is perched around 2.41% and MBS prices are a shade better versus Tuesday's closing levels.

Tuesday, February 21, 2017

New LO training White Paper, Product and Vendor New, Post-Merger Psychology, Ocwen Back in CA



Last week Mike walked into a post office just before Valentine's day, he couldn't help noticing a middle-aged, balding man standing in a corner sticking "Love" stamps on bright pink envelopes with hearts all over them. Then the man got out a bottle of Channel perfume from his pocket and started spraying scent over the envelopes.
By now Mike's curiosity had got the better of him, and so I asked the man why he was sending all those cards. The man replied, "I'm sending out 500 Valentine cards signed, 'Guess who?'"
"But why?" asked Mike.
"I'm a divorce lawyer," the man replied.

Through the wonders of modern air travel, I find myself in Miami. But everywhere, in front of the grocery stores, in truly exciting news, are reminders that it's Girl Scout Cookie season. Yes, 200,000,000 packages every year made by two companies. Although many view this as a sign that March Madness will soon be here, or that baseball season is in the offing, they have their own season. Did you know Thin Mints are vegan? And those TM freeze well - buy a dozen boxes and throw them in the freezer for the summer - dinner party guests will be astounded.
 Are you executing the Top 3 Steps for Managing a Rookie? Find out by downloading this complimentary white paper from XINNIX, The Mortgage Academy. Written by XINNIX CEO Casey Cunningham and featured in The Mortgage Professional's Handbook, this powerful resource equips you with the insights you need to turn your new talent into some of the top producing members of your team. Ready to take your leadership skills to the next level? XINNIX is rolling out its newly-enhanced LEADERSHIP program on March 8th. Contact us now to sign up and learn more about how this incredible program can transform your business, and help you achieve your goals for 2017!
 Product news?
 Parkside Lending is pleased to announce the release of HomeReady. This FNMA product allows access to mortgages for creditworthy, low- to moderate- income borrowers who were previously underserved in the marketplace. Key highlights include lower down payment requirements, flexible income from non-traditional sources, and reduced MI coverage for FICOs 680 or higher that can be removed before the life of the loan. Combined with their recently expanded FHA guidelines, adding HomeReady to their product mix allows Parkside to bring their excellent service experience to that many more borrowers. Please contact your Parkside Account Executive for more information or sales@parksidelending.com.
 As of Friday, February 10, Flagstar made significant enhancements to its Second Mortgage products. The program will now allow applicants to obtain financing up to 89.99% combined loan-to-value (CLTV). A Flagstar Second Mortgage can be paired with a conventional, agency-eligible Flagstar first mortgage product to avoid the mortgage insurance requirements of a single loan transaction above 80% LTV or an alternative to jumbo financing.
 Effective immediately, NewLeaf Wholesale updated its NewLeaf 1 & NewLeaf 2 Conventional Hybrid ARM guidelines.
 Sierra Pacific spread the word of some of its Freddie Mac program changes. Businesses owned LESS than 5 years will require 2 years of business AND personal tax returns (currently, its only year of tax returns AND one full year of being self-employed). Use of business bank statements as verification of a business's existence when no other 3rd party verification exists.
The use of handwritten paystubs will be allowed with additional requirements. The use of year end paystubs and W2 transcripts in lieu of W2's will be allowed. Allowing the use of income up to 60 days AFTER the note date (example: promotion, raise, new contract, etc.). Income history and stability LESS than 12 months may no longer be acceptable (example: recent college graduate or returning mother to the work force). Verification of a business will ONLY BE required when that income is used to qualify. Clients should contact Sierra Pacific for full details.
 Ditech Approved Wholesale Clients should note the DU Refi Plus Fixed High Balance and DU Refi Plus Fixed Texas Equity products will now offer 10 to30 year loan terms in annual increments.
 Angel Oak now offers a 12-month personal bank statement program.
 Mountain West Financial, Inc. has temporarily suspended the origination of all NHF Sapphire programs in all states. Until further notice, new originations of the programs will not be accepted. MWF is actively monitoring the situation surrounding these products and will update its position as new information arises.
 HomeXpress is offering loans up to 1.5MM. Interested in details? Contact Andrew Goldthorpe.
 As detailed last week in this commentary, Finance of America is launching its new division, Finance of America Commercial which will provide single-property, portfolio and short-term bridge loans to real estate investors across the country. Jordan Capital Finance CEO Mark Filler will serve as president of the new business unit. Jordan Capital SVP Ben Fertig and B2R SVPs Joe Hullinger and Matt Soto will continue to lead sales efforts and oversee operations for the organization.
 Post-Merger or Acquisition Psychology
 A fair number of lenders, both depository and non-depository, merged or were acquired in 2016, and 2017 is expected to rival it. Owners are aging, tired of the maze of rules and regulations keeping them from helping their borrowers, or tired of watching costs mount. So much thought and work is put into planning for a merger or acquisition, but how much is put into what happens afterward? Do half the LOs go to lunch and not come back after the acquisition?
 I received an e-mail from Jeri Yoshida, founder of Yosh Communications (provider of PR & marketing for the mortgage industry) who is moderating a panel at the MBA's Mergers and Acquisitions Workshop this week in Dallas. Regarding M&A communications, Ms. Yoshida observes, "Loss is almost inevitable if a company doesn't control M&A messaging. Internal and external communications are one of the most overlooked aspects of M&A transactions. Ineffective communication increases the risk of employee turnover, reduced productivity and weakened client and partner relationships. Most companies communicate too little or too late, or they don't communicate at all. They need to take control of communication with messaging that stabilizes the organization and establishes the company culture moving forward. Silence is like a petri dish for rumors, which tend to undermine employee commitment and morale.
 "Even though mergers and acquisitions look attractive in theory to management and investors, the reality of their execution is that organizations are composed of employees who generally view such organizational changes as a threat. Accordingly, many merger and acquisition (M&A) deals have inherent retention issues resulting from negative attitudes often felt by employees, including, but not limited to: uncertainty about the future organizational direction, feelings of loss of previous organizational culture, uncertainty about personal job security, perceptions of lack of leadership credibility, feelings of confusion due to a lack of communication, survivor guilt due to downsizing of other employees, and perceptions of increased job stress and workload.
 "In essence, employees often lose trust in their organizations and feel betrayed by leadership. Consequently, in an attempt to regain control over individual job situations, many employees begin to contemplate 'jumping ship' as the merger or acquisition is implemented. During a merger or acquisition, however, it is essential to keep employee turnover low for two significant reasons. First, business continuity is key to realizing the benefits of a merger or acquisition. And second, there can be large financial implications from the cost of hiring new employees, the loss of knowledge/ intellectual capital, and the loss of client relationships." Thank you, Jeri!
 Speaking of large financial implications, Ocwen will pay $225 million to settle allegations it violated mortgage servicing rules. The $198 million in refund and loan forgiveness money goes to Californians over the next three years, and settles & terminates the January 2015 Consent Order between Ocwen Loan Servicing, LLC and the State of California Department of Business Oversight (DBO) - without Ocwen admitting any wrongdoing. The DBO has lifted its prior restriction on Ocwen's ability to acquire mortgage servicing rights associated with California properties. It also terminated the engagement of the independent auditor Fidelity, which was previously in place under the prior Consent Order in California.
 What's new with vendors out there?
 Lendsnap allows lenders and brokers to automate document collection for all the borrowers they work with whether they need conventional, non-agency, or FHA/VA financing. We gather original bank statements, W2s, paystubs, tax returns, and more, directly from the source institutions delivering the actual statements to our clients. Just ask our customers what they think: "Lendsnap has improved our signed application conversion almost overnight because of its speed and ease of use. Once clients send us the documents and we can deliver a full Pre-Approval, they are more likely to stay with us and use us to satisfy their mortgage needs." - Jared, Access Mortgage Partners. Click here to schedule a demo or email Mike Romano to learn more.
 eValuation ZONE Inc., a business specializing in real estate appraisal management services, received national certification as a Women's Business Enterprise by the Women's Business Development Center- Chicago, a regional certifying partner of the Women's Business Enterprise National Council (WBENC).  "We are thrilled to receive WBE Certification and honored to be a part of this wonderful community of women-owned business. The Certification brings many great opportunities for our company, opening doors to compete in both public and private sector projects," commented Inesa Tomaszewski, president.
 Equator, a default software solutions for servicers, real estate agents and vendors,released its end-of-year performance metrics. Equator's REO, short sale and loss mitigation modules have now processed transactions totaling more than $315 billion since its inception with more than 2.2 million distressed properties sold to date. 2016 saw the launch of new EquatorSaaS and data services aimed at helping Equator customers improve their operational efficiency. Equator increased its nationwide network of active real estate agents to over 60,000 and unveiled a new data-infused product called Equator Agent Elite.
 Interest rates & business days
 That's right, yesterday was a holiday. Some lenders were open yesterday, some offered floating holidays (mixed up with others days like Veteran's Day, the day after Thanksgiving, etc.), and others took it off entirely. Yesterday bond market was closed, no funds were wired, no fundings took place, bulk trades executed, and the IRS, Federal Reserve, & Social Security Administration Service Centers were closed. And yesterday is not considered a specific business day for purposes of Closing Disclosure delivery/waiting period or rescission timeline calculations.
 Ahead of yesterday (looking back to the markets on Friday), not much happened. Investors are still hopeful that fiscal stimulus and tax cuts are forthcoming - remember the Laffer Curve telling us that with tax cuts comes more money, with more money comes more spending, and with more spending comes economic activity. Number-wise, on Friday the 10-year's price rallied about .250 (and the yield closed at 2.43%) whereas the 5-year note and agency MBS prices improved about .125.
 And now we're into Tuesday already! And it's a light week for economic news, with little of substance scheduled for today. Tomorrow we'll have the MBA's read on applications for last week, along with Existing Home Sales and the FOMC meeting minutes. Thursday holds Initial Jobless Claims, the FHFA (overseer of Freddie and Fannie) House Price Index, and some other secondary reads on the economy. Friday the 24th we will see New Home Sales for January and a bunch of University of Michigan numbers of varying & questionable importance. We start the week with rates nearly unchanged: the 10-year is hovering around 2.45% and MBS prices are little changed versus Friday afternoon.

Monday, February 20, 2017

Legal Stuff, Title Companies and Blockchain, Electronic Notarizations, When Are Signatures Required, Is An E-mail a Contract?





Folks always wonder where the money goes when the CFPB penalizes companies. What about the money that hackers steal? And how are they stealing it? Here's a story that only an IT person would savor about hackers pinching bitcoins using phone numbers.

 What about wrongdoing via forgery... what are the trends in the legality of documents & signatures? Electronic signatures and automatic signature verification are crucial yet often overlooked components of check fraud detection. A single signature clearly has far-reaching ramifications. A direct correlation exists between front-office operations such as capturing customer signatures, and back-office operations such as confirming signature authenticity and check verification to prevent forgery, one of the top three types of check fraud.

 This week the American Land Title Association (ALTA), the national trade association of the land title insurance and real estate settlement industry, sent a letter to the National Association of Secretaries of State (NASS) offering support of efforts to promote the understanding of remote electronic notarizations. ALTA offered eight suggestions to help guide the development of clear statutes, regulations and standard practices that authorize and recognize remote electronic notarization. The guidance is necessary to give certainty that remote and video notarizations will be accepted as valid transactions by county recorders, state courts and bankruptcy trustees.

"'The title insurance and settlement industry seeks assurance that a remotely electronically notarized document will receive the same legal certainty, and provide effective constructive notice, under state law as a traditional, wet-signed, face-to-face, personal appearance notarization,' said Michelle Korsmo, ALTA's chief executive officer. 'Though states have long accepted traditional notarizations conducted in other states, it is currently unclear as to whether remote electronic notarizations will receive the same treatment.'"

 "ALTA believes the following elements should be included in remote electronic notarization statutes: Adequate safeguards to protect the public and the parties relying on notarization from fraud. Proven methods of authenticating identity of the signer through a multi-factor identification process. Confidence that a remotely electronically notarized document is recordable in the local land records, and that once recorded will serve as effective constructive notice upon which the public can rely. A determination of whether the state will recognize remote notarial acts performed by out-of-state notaries. Require an indication on the notarized document to specify how the signer appeared before the notary. Tamper-evident technology is used to assure the integrity of a remotely electronically notarized document. Require the retention of records for a remote electronic notary for a period of at least seven years. Clarity and consistency within statutes that require the use of notaries and witnesses to give guidance as to the impact of remote notarization on these other processes." For more, you may download ALTA's letter.

 And this note on signatures in general. "We are constantly worrying about getting consumer signatures on our TRID disclosures. In fact, we are unsure of signatures on several consumer disclosures. It seems like a minefield at times to determine if we should be getting disclosures signed. Here's our question: what are some of the disclosures that we need to get signed by the consumer?"
 Jonathan Foxx with the Lenders Compliance Group opined, "At Lenders Compliance Group, we get this question regularly, especially when there is a transition to a new disclosure protocol. It can be confusing. Here are a few notice upon which the public can rely. A determination of whether the state will recognize remote notarial acts performed by out-of-state notaries. Require an indication on the notarized document to specify how the signer appeared before the notary. Tamper-evident technology is used to assure the integrity of a remotely electronically notarized document. Require the retention of records for a remote electronic notary for a period of at least seven years. Clarity and consistency within statutes that require the use of notaries and witnesses to give guidance as to the impact of remote notarization on these other processes." For more, you may download ALTA's letter.

 And this note on signatures in general. "We are constantly worrying about getting consumer signatures on our TRID disclosures. In fact, we are unsure of signatures on several consumer disclosures. It seems like a minefield at times to determine if we should be getting disclosures signed. Here's our question: what are some of the disclosures that we need to get signed by the consumer?"
 Jonathan Foxx with the Lenders Compliance Group opined, "At Lenders Compliance Group, we get this question regularly, especially when there is a transition to a new disclosure protocol. It can be confusing. Here are a few disclosures on which consumer signatures may or


 The Loan Estimate (initial or revised): Not required. Optional. [1026.37(n)(1) & (2)]

The Closing Disclosure: Not required. Optional. Signature(s) for documenting receipt of the Closing Disclosure is at the lender's option, in order to evidence receipt by borrower three (3) business days prior to closing. [Commentary ¶37(n); Commentary ¶38(s)]

Loan Estimate with signatures versus Intent to Proceed: Signature(s) for confirming receipt of the Loan Estimate may not be used as replacement for signature(s) required by Intent to Proceed. [§1026.37(n); 78 FR 79813]

Closing Disclosure (non-borrowing spouse) three (3) business days prior to closing and at closing: Not required. Optional. Signature(s) for documenting receipt of the Closing Disclosure is at the lender's option, in order to evidence receipt by borrower three (3) business days prior to closing. [Commentary ¶37(n); Commentary ¶38(s)]

 "There are many caveats, but here are a couple to consider. You should determine if consumer signatures are required by a specific loan program or investor. Also, the Loan Estimate or Closing Disclosure can be transmitted in accordance with E-Sign compliance standards; but, there is no regulatory requirement that either the Loan Estimate or the Closing Disclosure must actually contain signature(s). [§1026.37(o)(3)(iii); §1026.38 (t)(3)(iii); 15 USC 7001 et. seq.] To appropriately implement the E-Sign process for consumer signatures, and to review other caveats, it is a good idea to seek the guidance of a compliance professional."
 In addition, Mr. Foxx wrote, "The Electronic Signatures in Global and National Commerce Act (E-Sign Act) provides a general rule of validity for electronic records and signatures for transactions in or affecting interstate or foreign commerce. The E-Sign Act allows the use of electronic records to satisfy any statute, regulation, or rule of law requiring that such information be provided in writing, if the consumer has affirmatively consented to such use and has not withdrawn such consent.

 "Prior Consent is required from the consumers in order to implement the E-Sign Act procedures. Prior to obtaining their consent, financial institutions must provide consumers, a clear and conspicuous statement informing the consumer: of any right or option to have the record provided or made available on paper or in a non-electronic form, and the right to withdraw consent, including any conditions, consequences, and fees in the event of such withdrawal; whether the consent applies only to the particular transaction that triggered the disclosure or to identified categories of records that may be provided during the course of the parties' relationship; that describes the procedures the consumer must use to withdraw consent and to update information needed to contact the consumer electronically; and that informs the consumer how the consumer may nonetheless request a paper copy of a record and whether any fee will be charged for that copy."
 Jeff R. asks, "How does the title industry view blockchain technology? Perhaps I'm missing something obvious, but it seems that blockchain's ability to create a digital, public ledger that is inherently resistant to alteration and is ultimately transparent could and should remove the need for title insurance in the future. But will it happen? Will local politics and lobbyists get in the way? 

 "Title insurance - of all verticals within the greater real estate industry - seems to be the slowest to react to change and is perhaps, in fairness, the hardest to change due to the very decentralized and localized nature of insurance. Take Texas, for example, where title insurance rates are set by regulators, presumably to 'protect' consumers (or, rather, to protect title company margins). Ironically, Texas title insurance rates are among the highest in the nation.  Will such "consumer protection" strategies employed by local regulators get in the way of disruptive blockchain technologies that could ultimately make title insurance obsolete and thereby dramatically reduce the cost of borrowing, buying, and selling?
"Ultimately, it will be up to individual counties to decide how they're going to participate in blockchain technologies that could transform the industry. Will counties be smart enough to leverage some type of standardized platform for the recording of all instruments so that the cost of maintenance of the network could be shared by all? If so, who will create that? Here's hoping that regulators and lobbyists under the guise of 'consumer protection' don't get in the way of such advancements." Thank you, Jeff!I sent this note along to Andrew Liput with SecureInsight who responded with, "This is an excellent point and it highlights the perception that title industry insurance premium pricing, despite massive improvements in technology and changes in buying habits, has not changed with the times. Thirty years ago, searches were done manually, visiting clerks' offices and reading through massive recoding books.

 "Today the availability of online property data makes searches much more convenient and expeditious. In addition, whereas most people stayed in their homes for 20 years or more in the 1960s, 1970s and even 1980s, today people are moving constantly and so properties are changing hands on average every 5 years. This means that title searches are not as extensive and are repetitive. Finally, the accuracy of electronic recording and public databases means fewer errors. I read somewhere that title claims (not claims or litigation regarding settlement errors and theft) represented only 5% of overall policies written. These changes are not reflected in the cost of title insurance today. In New Jersey, a loan for $300,000 will on average cost the buyer and seller approximately $4,000 in insurance and related fees this year. Any solution that reduces the expense of title insurance while maintaining the reliability of property records is great...you just have to convince ALTA and the state insurance regulators."

 And are thoughts about signatures & legal contracts changing? Law firm BucklySandler reports that, "On December 22, in an unpublished decision, a Texas Court of Appeals held that an email exchange constituted an executed contract between two individuals under the state's enactment of the Uniform Electronic Transactions Act ('UETA'). Khoury v. Tomlinson, No. 01-16-00006-CV (Tex. App. Dec. 22, 2016). The dispute involved an email sent from Appellant to Appellee, which outlined terms of an agreement to repay investment funds. Appellee responded to the email, stating 'We are in agreement,' but did not type his name or include a signature block at the end of his message. A jury found that an electronic contract was formed by this exchange, but the trial court granted the Appellee's motion for judgment notwithstanding the verdict on the basis that the electronic contract violated the state statute of frauds. On appeal, the Appellant invoked the UETA, arguing that the email satisfied the writing requirement of the statute of frauds because it was an electronic record and that the header, which included a 'From:' field bearing the Appellee's name, constituted Appellee's signature because that field serves the same 'authenticating function' as a signature block. The appellate court agreed that the email was an electronic record sufficient to satisfy the writing requirement in the statute of frauds."
BuckleySandler reported that, "On February 17, a U.S. District Court held that home sellers who use contracts for deed are required to comply with CFPB Civil Investigative Demands (CIDs) asking for information about possible illegalities in selling or collecting residential property purchase loans. CFPB v Harbour Portfolio Advisors, LLC et al., [Order] No. 16-14183 (E.D. Mich. Feb. 17, 2017). Specifically, the Court found that the Bureau is not "plainly lacking" in jurisdiction to look into contracts for deed, and the CIDs were not unduly burdensome. Back in November, the CFPB had petitioned the court to enforce CIDs served on Respondents. At issue before the Court was whether the Bureau's investigative authority extends to the selling, marketing, and servicing of a financial product called an Agreement for Deed ("AFD"), otherwise known as a "contract for deed" or a "land installment contract." Respondents thereafter petitioned the Bureau to set aside the CIDs, offering three reasons why the CIDs should not be enforced: (i) the CFPB exceeded its authority in issuing the CIDs; (ii) the companies had not been given fair notice that contracts for deed could be covered by federal financial consumer protection laws; and (iii) the CIDs were unduly burdensome and should be modified.