Agency Today – A Magazine About Growth and Prosperity™ by First American Title - Agency Division

AGENCY

TODAY A M AGA ZIN E A BOUT GROW TH A N D PROSPER IT Y

Issue 2

CYBER FRAUD

BE CAREFUL TILA-RESPA OUT THERE Integrated Disclosure Rule Outsourcing: AGENT A STRATEGY FOR SUCCESS INTERVIEWS DEVELOPING A

SOCIAL IMPLEMENTING

Best Practices

Network Basics

FOR TITLE AGENTS

STRATEGY

AGENCY

TODAY Welcome to AGENCY TODAY - A MAGAZINE ABOUT GROWTH AND PROSPERITYâ&#x201E;˘, published by First American Title Insurance Company. Agency Today is a publication covering a broad range of topics focused exclusively on growing and strengthening your title business. First American Title is committed to providing you

AGENCY

TODAY A M AGA ZIN E A BOUT AGENC Y GROW TH A N D PROSPER IT Y

Issue 2

valuable content, new ideas and access to the brightest minds in our business. We believe that in an age where so much can

CYBER FRAUD

BE CAREFUL TILA-RESPA OUT THERE Integrated Disclosure Rule Outsourcing: AGENT A STRATEGY FOR SUCCESS INTERVIEWS DEVELOPING A

be lost in the digital interference of email, attachments and the internet that a well-crafted and thoughtful publication dedicated to your success is a great way to communicate our commitment to the independent title agent. It is our hope this magazine finds a home in your collection of reference materials. We commit to not only help you resolve everyday challenges but to help you achieve new levels of success in your business.

Agency Today | Issue 2

SOCIAL IMPLEMENTING

Best Practices

Network Basics

FOR TITLE AGENTS

STRATEGY

CONTENTS FROM THE EDITOR Dear Reader, On behalf of all of us at First American Title, thank you for your business and loyalty. It is with great pleasure we bring to you the second edition of Agency Today—A Magazine about Growth and Prosperity™ produced exclusively for policy-issuing agents of First American Title. The focus of the magazine is to provide articles that help you “work on” your businesses rather than “work in” your businesses. We hope you enjoy this publication, but more importantly, we hope it provides value to further enhance your organization. All the best, Louis Pontani VP, DIVISION SALES AND MARKETING LPONTANI@FIRSTAM.COM

AGENCY TODAY STAFF EDITORIAL Louis Pontani EDITOR IN CHIEF VP, SALES AND MARKETING

Lynn Lewis EDITOR/CONTRIBUTING WRITER

ART AND DESIGN Sheli Cordero DIRECTOR, MARKETING & COMMUNICATIONS

ADVERTISING Elizabeth Sarber FAPRES/SMS

4 5 8 10 11

FIRST AMERICAN: FINANCIAL POSITION OF AN INDUSTRY LEADER MEET MARK FLEMING, CHIEF ECONOMIST THREE THINGS

By: John M. Hollenbeck, Executive Vice President, First American Title

POSITION YOUR DEAL FOR SUCCESS

By: Leonard Prescott, VP, Florida State Counsel, and the Florida Underwriting Team, First American Title

EMAIL PROTOCOLS FOR BETTER BUSINESS COMMUNICATION By: Lou Pontani, VP, Sales and Marketing, Agency Division, First American Title

TILA-RESPA INTEGRATED DISCLOSURE RULE

THE QUESTIONS ATTORNEYS AND AGENTS NEED ANSWERS TO, SOME ANSWERS, AND WHY WE DON’T HAVE ALL THE ANSWERS … YET By: Ruth Dillingham, Special Counsel, First American Title

14 17 19 21 22 24 28 30 32 35 24

BE CAREFUL OUT THERE

24 44

By: Michele A. Green, VP, Senior Division Underwriting Counsel, First American Title

WHY YOUR FIRM MAY BE A TARGET FOR A MASS DATA BREACH By: CertainSafe

USING 1031 EXCHANGES TO GROW YOUR BUSINESS

By: Mary Kay Kennedy, National Operations Manager, First American Exchange Company

10 TIME-SAVING TIPS FOR 2015

By: Lou Pontani, VP, Sales and Marketing, Agency Division, First American Title

SMS - ONE SOURCE. MANY SOLUTIONS NETWORK BASICS FOR TITLE AGENTS “WAIT & SEE” IS NOT AN EFFECTIVE STRATEGY

By: Tiffany J. Whitney, Director of Learning First American Eagle Academy™

THE RELATIONSHIP BUSINESS

By: Lou Pontani, VP, Sales and Marketing, Agency Division, First American Title

DEVELOPING A SOCIAL STRATEGY

By: Sarah Shehata, Social Media Program Manager, First American Title

NEED AN ICEBREAKER? OUTSOURCING: A STRATEGY FOR SUCCESS

By: Prashant Kothari, Founder and CEO, String Real Estate Information Services

AGENT SPOTLIGHTS Cislo Title Company Counselors Title, LLC

Diversified National Title Agency Orange Coast Title Company

FROM THE FIELD — IMPLEMENTING BEST PRACTICES Stephens Millirons, P.C. Majesty Title Services, LLC

The Judicial Title Insurance Agency, LLC University Title Company

TRID COUNTDOWN — IS YOUR SOFTWARE READY?

NEW TRID CLOSING DISCLOSURE FORMS

54 56

SUCCESSFUL IMPLEMENTATION OF A CLEAN DESK POLICY

By: Terri Parnell, Senior Business Analyst, SMS

TITLEEXPRESS AND STREAMLINE

By: Scott Fairbanks, Product Manager, GreenFolders

GREENFOLDERS: THE ELECTRONIC OFFICE MANAGEMENT SOLUTION By: Lou Pontani, VP, Sales and Marketing, Agency Division, First American Title

Agency Today | Issue 2

AFitch Ratings A Moody’s Investors Service A3 A.M. Best Company

Standard & Poor’s

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A-

EXECUTIVE SPOTLIGHT

MARK FLEMING CHIEF ECONOMIST

MARK FLEMING CHIEF ECONOMIST First American Financial Corporation

Mark Fleming serves as the chief economist for First American Financial Corporation. In his role, he leads an economics team responsible for analysis, commentary and forecasting trends in the real estate and mortgage markets. Fleming’s research expertise primarily includes real estate and urban economics, applied econometrics, and mortgage risk.

As a trusted and influential voice with 20 years of experience in the mortgage and property information business, Fleming is frequently quoted by national news outlets and industry trade publications, such as The Wall Street Journal®, The New York Times®, and HousingWire, and he is a regular guest on a high-profile broadcast news channels, including CBS, CNBC, Fox Business Network and NPR. He has published research in the American Journal of Agricultural Economics and Geographic Information Sciences. His research has also been published in the book, Advances in Spatial Econometrics. Before joining First American, he developed insights and analytical products for CoreLogic™, and property valuation models at Fannie Mae. Fleming graduated from the University of Maryland with a master of science and a doctorate in agricultural and resource economics and holds a bachelor of arts in economics from Swarthmore College. He lives and works in the Washington, D.C. area.

(continued)

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MARK FLEMING CHIEF ECONOMIST Executive Spotlight (continued)

Q A

What drew you to economics? I was always drawn to math and science. In my first year of college, I thought of pursuing an engineering degree but felt it was too much math. Then I opted for physics, but found the concepts too esoteric. I ultimately landed in an economics class as part of my liberal arts requirements at Swarthmore. I found economics a discipline of logic. The concepts made a lot of sense because it’s ultimately the study of people’s behavior, how we act in the real world, how we act to get by in life. By the time I went to graduate school I started to specialize in econometrics. Econometrics is the application of statistics in economics. The discipline is very practical because it allows you to sift through mountains of data and extract simple relationships that business can plan and act on. What are your other passions outside of economics? In my heart I am a Philadelphia guy. I love the Eagles and Philly Cheesesteaks. I also like to brew beer, which is a family tradition. My father made beer and I learned the craft from him. I also do a lot of outdoor and physical activities like running and biking. I am thinking of getting into the pool and swimming so I can do a triathlon. I have also been known to hit the yoga mat. I practice Baptiste yoga, a form of hot yoga. It’s not as fast as Bikram, but the heat is cranked up really high and the classes are an hour and a half; you get a really good workout. What do you want to achieve in your new role at First American Title Insurance Company? The clear goal is to elevate First American Title Insurance Company as a well-known brand for thought leadership in the housing and financial services industry and continue to position us as a forward-thinking organization. The real estate industry is changing on many different levels. As an economist, these changes present a tremendous opportunity to develop data-driven models that

Agency Today | Issue 2

insightfully forecast future trends, but also help us do our own business differently, more efficiently, or more effectively for our customers. We must constantly be looking at ways to be more efficient, reduce risk, and ultimately differentiate ourselves from competitors, not just for First American Title, but for our agents as well.

Q A

What are the strengths and some soft spots of our real estate market today? The overall economy has strengthened over the last 6 months to a year. Job creation, reduced unemployment, low inflation, and cheap oil are all having beneficial effects. One can debate the quality of jobs being produced, but keep in mind if everything is perfect then that is a problem. There should always be a lively debate about economic issues because the debate enables us to continue to make things better. The housing market is also strengthening and in the process of self-correction. Many of the hardest-hit markets have skyrocketed out of crisis with high levels of appreciation. The housing market is approaching new “normal” levels of transaction volumes and affordability. But what is normal? Similar to Aesop’s fable of The Tortoise and the Hare, when the market raced ahead like the hare was that normal? Or is the slow and steady approach of the tortoise more normal? We are returning to the tortoise’s slower pace, and an economic fundamentally supported sustainable housing market that will ultimately win the race. A surprise development is the recent decline in oil prices. Currently, we have more supply relative to demand due to a number of factors including: more efficient energy usage, reduced demand because of slowing economic growth globally, and increased production in the United States. A short-term decrease in the price of oil won’t change behavior, but if oil prices remain at low levels for

EXECUTIVE SPOTLIGHT

an extended period of time, consumers will take their additional discretionary income and spend it. That’s good for the economy and good for the housing sector. One of the soft spots, or at least points of concern, in the real estate industry is the upcoming August 1, 2015, implementation date for the TILA-RESPA Integrated Disclosure Rule—I call it form reform. This is a significant event for everyone in the business of closing mortgage loan transactions. The regulations will require changes to operations and procedures, technology platforms and business strategies throughout the industry.

Q A

In your opinion, how much short-term disruption will this cause for the industry and what do you estimate the economic impact will be, if any? A tremendous amount of effort has gone into ensuring the transition goes as smoothly as possible. However, it is no inconsequential task to make the changes required and this undertaking affects consumers, real estate agents, lenders and title companies. Software providers are working at an all-out pace to upgrade or modify systems to meet the implementation deadline, industry professionals are learning a new set of processes for loan and closing disclosures, and consumers will be turning to real estate agents for guidance and assistance in navigating the new landscape related to closing these transactions. Summer is a critical time and hopefully the results of all the hard work will pay off. Estimating the economic impact is hard because we can’t model what we don’t have a track record for. There are costs associated with a change of this magnitude and they will be felt across the industry. The ALTA Best Practices provide a framework for complying with the new regulations, but again, making these types of changes involves significant expenditures of effort and money. It will be easier to attribute the economic impact and consumer benefit of the integrated mortgage

disclosure process once more information is available.

Q A

What pieces of data do you think a title agent should follow to get a directional feel of where their real estate market is heading? Two things I like to look at are the month’s supply of homes for sale and the changes in home prices. The relationship of supply to demand affects home price changes; best measured by the number of months it would take for the inventory of homes for sale to be sold at the current pace of home sales. If the months supply of homes increases typically above 6, one may expect flat growth or falling prices because of excess supply relative to demand. Conversely, when inventory is limited as indicated by a months supply typically below 4, prices often increase. When looking at home prices, how the home values are changing over extended periods of time is important. Year-over-year change is better than month-over-month because of the seasonality of housing markets. Housing markets tend to shift slowly. For example, while a Ferrari can accelerate from 0 to 60 in just a few seconds, housing markets are more like semitrucks that take a while to get up speed, but once they do they have lots of momentum and it requires a lot of market friction to slow them down. A good source of data is often the local Multiple Listing Services (MLS). First American Title is also an excellent resource, with multiple tools available, to provide agents with a more in-depth analysis of the direction their market is heading. In the coming months, as I work to elevate the brand and position us as a forward-thinking thought leader, you will see more economic and data-driven resources available to agents to better understand the housing and financial services industry.

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Three Things Call it the drip system—all these little tidbits of information about the impending TILA-RESPA Integrated Disclosure Rule, effective on August 1, 2015. Here are three personal observations to consider as you ponder the effect of the new Rule: 1. 2.

Notwithstanding the constant drumbeat to the contrary, the new Closing Disclosure is not exactly a replacement for the existing HUD-1 Settlement Statement. Most lenders will produce and deliver the initial borrower’s Closing Disclosure. Most lenders will also produce later versions of the Closing Disclosure, but may rely upon the settlement agent to deliver an amended Closing Disclosure. Working your files early will be important.

The Closing Disclosure is not exactly a replacement for HUD-1 Settlement Statement

Currently: the HUD-1 Settlement Statement is mandated by Regulation X, the federal regulation implementing the Real Estate Settlement Procedures Act, or RESPA. It requires the settlement agent to issue the final HUD-1, which reflects what happened at closing. The key here is the HUD-1 is a settlement statement. Under the new Rule: the lender, not the settlement agent, is obligated to issue the borrower’s Closing Disclosure three days prior to consummation. Sure, the lender may delegate responsibility to the settlement agent, but the lender remains liable for its content, and the basic character of the Disclosure remains the same—that it is a lender’s pre-closing disclosure, dare I say an estimate, even an approximation, of what will take place at closing. Point 1. The Closing Disclosure is a lender disclosure, not a settlement agent accounting. Point 2. The Closing Disclosure is pre-closing by its very character, and not a representation of what actually happened at closing. Point 3. The Closing Disclosure does not necessarily accurately account for the funds passed through the settlement agent’s escrow trust account, nor does it properly reflect charges to buyer and seller in all instances. Here are three examples:

By: John M. Hollenbeck Executive Vice President First American Title

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1. The Closing Disclosure requires the real estate commission to be shown as one fee. Fair enough, but what if the settlement agent’s payment of the real estate commission nets out an earnest money deposit held in a broker’s trust account? This should be reflected on a settlement statement, but will not appear on any Closing Disclosure. 2. The Rule requires title insurance premiums to be oddly reported on the Closing Disclosure for reasons not discussed here. The Closing Disclosure is not reliable for reflecting the accurate charges to the buyer and seller for title insurance in a clear and easily understandable way. 3. The Closing Disclosure does not adequately provide for reflecting the charges of the various documents that may be recorded in the transaction. It provides for the recording charges for a deed, a mortgage and a total. What about other documents: releases, assignments, subordination agreements, and so forth? CFPB may not have intended this outcome, but the reality is that while the TILA-RESPA Integrated Disclosure Rule ushers in new forms, it leaves a gaping hole. It did not replace the settlement statement; rather it required new disclosures of lenders while vacating a federal mandate that a settlement agent issue a settlement statement in most loans.

Settlement agents will nevertheless continue to issue settlement statements, in my opinion. I don’t see another alternative. Buyers and sellers are entitled to an accounting from their settlement agent. What happened to all of the money? Who was charged for what, and so forth? Many states’ statutes require settlement agents to issue a settlement statement. These statutes are still on the books. First American Title will continue to issue

Expect ALTA to promulgate a standard form of settlement statement later this year. This form will be voluntary, of course, but will likely be adopted on a widespread basis and lenders may even require its use.

Most lenders will produce and deliver the initial borrower Closing Disclosure

Several large and mid-sized lenders have already announced their intention to assume complete control for the preparation and delivery of the Closing Disclosure. However, the settlement agent may be utilized, not to produce but to deliver any amended Closing Disclosure at closing. Why are lenders thoughtfully reaching this conclusion? Is this decision good or bad for settlement agents? From a lender’s perspective, it makes complete and perfect sense. Remember that under the law, the lender is 100% responsible for the contents and timely delivery of the borrower’s Closing Disclosure. If the lender outsources this responsibility to the settlement agent, but the agent makes errors by either fat-fingering the wrong fees into the form or delivering it too close to closing, the lender could suffer losses. The risk is too big. Furthermore, the lender is responsible for maintaining evidence of compliance in its records for a variety of facets of the Closing Disclosure, including timely delivery. Unless the lender controls delivery, it’s hard to see how that evidence can be produced and efficiently maintained.

settlement statements when we act as settlement agent, although it’ll be a different form than the existing HUD-1.

I am perfectly fine with this arrangement. It does not hurt settlement agents in the least. Lenders still need settlement agents, and so do buyers and sellers. The fact that lenders will take charge of the borrower’s Closing Disclosure is not the camel’s nose under the tent, as the metaphor goes. Lenders will not next want to take over the entire closing. It’s not a realistic scenario. Challenges are in front of us, however. If the lender will produce every version of the Closing Disclosure, lenders must be ready to make changes as the settlement agent makes changes at or near closing. Conversely, the settlement agent will never be able to make last-minute changes at the closing table without the lenders involvement. Last-minute changes involving the borrower must be communicated to the lender, and the lender, if it has decided to do so as a matter of company policy, must produce a new Closing Disclosure. It’ll be interesting to see how all of this plays out.

Working your files early will be important

By now you know that the lender must deliver the borrower’s Closing Disclosure three business days prior to “consummation.” Think of this, loosely, as three days prior to signing. At least in the early days of implementation, many if not most lenders will deliver the Closing Disclosure via the United States mail, which adds another three days because the Rule provides for “deemed delivery” three days after mailing. Add another three days for right of rescission if it’s a refinance, and a day or two in escrow states since signing occurs prior to closing. I think you get the point; the lender must deliver the borrower’s Closing Disclosure well before closing. Lenders will compete based upon getting deals closed on time. It follows that lenders will want to find the optimum point to mail the Closing Disclosure. This may well be 10 days or so before the scheduled

closing date. In order for this to occur, lenders need the settlement agent’s figures early, much earlier than is generally available today. That leads me to this point: Settlement agents should vigorously work files early. Once an order is placed, processes should be organized so that, at the earliest practical time, you’ve accumulated all of the information needed to close—payoff demands, HOA demands, tax information, etc.—and input the information into your production software. You will no longer be able to time things so that you are doing the majority of the work at the tail end of the closing. The information should be in your system early so it can be given to the lender when they need it.

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Position Your Deal for Success How to Make Your Underwriter Love You 1.

PRESENT A SPECIFIC OR FOCUSED QUESTION INSTEAD OF A GENERAL INQUIRY WHENEVER POSSIBLE For example, “I am concerned about the notary block on the deed” is much more effective than “Can you review this and let me know if it is okay?”

GIVE US THE WHOLE STORY The #1 rule of underwriting is to "know your deal." Even the most technical questions should be answered within the context of your transaction and a brief summary/narrative. Providing the Who, What, When, Where, and Why is essential to a successful resolution. Don't forget to include your own role in the transaction and disclose all relevant facts that may or may not be favorable to the parties or yourself as agent.

PUT IT IN WRITING Phone conversations are welcome and often essential, but an email with a brief summary of the transaction and issue, whether before or after the conversation, is often just as crucial to a careful analysis and appropriate response.

PROVIDE COPIES OF ALL RELEVANT DOCUMENTS Yes, we are the title company and can get our own access to the public records; but forwarding copies of the relevant documents lessens the potential for miscommunication or mistakes and speeds review and response time. Many times a quick review of documents will reveal the

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By: Leonard Prescott VP, Florida State Counsel and the Florida Underwriting Team First American Title

appropriate solution or will allow us to determine if the questions being asked include the only or most pressing issue that needs to be resolved. Include any prior title evidence and prior policies. 5.

OFFER POTENTIAL SOLUTIONS OR YOUR DESIRED OUTCOME FOR DISCUSSION You are our "eyes and ears" and will often have significant information regarding the full circumstances, personalities, and balance of power within your transaction. Your practical insight and preferences should inform the decision-making process to narrow the potential solutions to the most desirable and workable; allowing us to be your advocate and saving everyone time and effort.

BUILD A RELATIONSHIP In your relationship with the underwriter, as in any relationship, transparency is necessary to build trust and loyalty. Don't cry wolf or fail to disclose that you have already discussed this same issue with another underwriter. Remember that we are constantly prioritizing and re-prioritizing our time in order to meet the demands of our position. A relationship based upon trust, honesty, and an authentic balance of give and take will guarantee that your underwriter is as responsive as possible.

Email Protocols for

BETTER Business

Communication

By: Lou Pontani VP, Sales and Marketing Agency Division First American Title

Email communication began as a helpful tool to exchange information and is quickly evolving into a leading cause of information overload. If your inbox has become a dreaded repository of unclear and unnecessary messages, utilizing these tips to streamline and improve the flow of information will result in a decrease in frustration and an increase in productivity. COMMUNICATION

• • • •

Accurately reflect the content of the email in your subject line. Add a qualifier such as Action Needed, Question, or FYI in subject line to help the receiver prioritize communication. Keep emails brief and to the point. Use bullets or sub-headers to make email easy to scan.

PRODUCTIVITY

• • •

Don't use your inbox as a to-do list; there are better taskmanagement tools. Empower people to do their jobs by insisting they not copy you on items they can handle without your input. Add names to the CC or BCC lines only if all recipients need the information.

COURTESY

• • • •

Include your contact information in all emails and replies. Use proper spelling, grammar and punctuation. Reply in a timely fashion. Do not send confidential information via unsecured email.

• • •

• •

Modify the subject line to reflect the conversation’s direction in lengthy exchanges. Use email for sending information that may need to be referenced later. Use the telephone for lengthy conversations or situations that need immediate attention.

Move all read messages to organized folders or delete. Limit your use of Reply All and encourage others to do the same. Reduce unnecessary responses by putting No Reply Necessary at the top of the message.

Refrain from discussing sensitive issues in an email; tone and intention can be misunderstood. Initiating a five-minute phone call can often resolve email exchanges that go on for days and weeks at a time.

Using email in an effective and efficient manner decreases the volume of unnecessary communication and increases your capacity to process important information, prioritize tasks and focus more clearly on high-value, business-building activities.

Agency Today | Issue 2

CFPB

TILA-RESPA Integrated Disclosure Rule The Questions Attorneys and Agents Need Answers to, Some Answers, and Why We Don’t Have All the Answers … YET

By: Ruth Dillingham Special Counsel First American Title

Is this really going to happen? Isn’t a Republican Congress going to repeal Dodd-Frank? It is going to happen; it begins on August 1, 2015, and no, Congress is not going to repeal the law. 1.

WHAT IS THIS REALLY? JUST A NEW HUD-1? No, it is not a new HUD-1. The CFPB has created two forms that combine the current Truth-in-Lending disclosures with the current RESPA disclosures (the Good Faith Estimate and HUD-1 Settlement Statement). The new forms are a Loan Estimate (given by the Lender to the loan applicant 3 days after application) and the Closing Disclosure that must be received by the borrower 3 business days before closing. The big issue is not the fact that there is a new form or even the new timelines, although those are important, but rather the liability of the preparer of the form to the borrower for its accuracy. WHY ARE THE LENDERS SO CONCERNED ABOUT THE NEW FORM BEING CORRECT? Two reasons: First, due to the requirements of the Ability-to-Repay and Qualified Mortgage (QM) Rule that started in January 2014, lenders have to know much more about the financial terms of both the mortgage transaction and the purchase transaction, and more information about the property. For example, an adjustment made between a buyer and a seller (such as a seller credit for a betterment that changes the loanto-value ratio) can impact the ‘salability’ of the loan on the secondary mortgage market. Lenders are already feeling the costs of non-Qualified Mortgage (QM) loans and are looking to tighten controls around changes to the settlement costs without their consent.

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With regard to the Integrated Disclosure Rule, the lender, and only the lender, is responsible for the accuracy of the entire Closing Disclosure, which contains components of both the RESPA and TILA Disclosures. This differs from the current (2014) situation, where the closing/settlement agent is responsible for the HUD-1 and the lender is responsible for the TIL. This Rule was issued pursuant to TILA, which changes the financial liability dramatically. 3.

WHAT DOES THAT FINANCIAL LIABILITY MEAN? Currently, if there is an error on the HUD-1 (an incorrect tax adjustment, the wrong amount of a payoff figure, etc.) it is a violation of Section 4 of RESPA—but there is no penalty for non-compliance. While the statute does allow for administrative actions against a violator (such as by HUD or the CFPB) there is no private right of action (the borrower or seller can’t sue the closing/ settlement agent or attorney). Under TILA, if there is a violation, the borrower can sue the lender for statutory damages (up to $4,000) as well as bring a private lawsuit for actual damages, and the penalties in an administrative action under Dodd-Frank can go from $5,000 to $1 million per day.

WHAT WE DON’T KNOW YET? The impact of this Rule on potential CFPB actions against lenders and the potential for private lawsuits. This is why lenders are taking the issue of ‘who prepares the Closing Disclosure’ so seriously.

WHEN WILL IT IMPACT ME? The specific impact will be felt by settlement and closing agents in a few stages: First: Some lenders have already begun telling their closing/settlement agents that they plan to exert much more control over the current closing process once this Rule takes effect. The most notable example is Wells Fargo which sent a notice* to all its agents on September 24, 2014, stating it plans to prepare the Closing Disclosure.

WHAT WE DON’T KNOW YET? What other lenders will decide. We expect that most lenders will have decided how they want to handle the issuance of the Closing Disclosure and control over any changes in the first few months of 2015. Every settlement/closing agent and attorney should be reaching out to their lenders to see what their thought process is at this point. Second: As lenders decide what level of control they will keep over the final Closing Disclosure and what changes will be permitted, we expect that they will be revising their Closing Instructions. WHAT WE DON’T KNOW YET? What those changes will look like. We do think some lenders will use this change in the Rule about conducting a closing to revisit who they use for closing services and their controls over them, and that it may also cause some to incorporate vendor management criteria (such as ALTA Best Practices) into their decision making.

WHEN WILL I GET TRAINING FROM FIRST AMERICAN TITLE, MY LENDER AND SOFTWARE VENDOR? Since most lenders are still making management level decisions about implementation of the Rule, First American Title training programs, and theirs, will be coming as they reach those determinations; many software vendors are awaiting specific information from lenders as well. First American Title has created training on the complete new Rule and a tab has been created in AgentNet ® for updates on the Rule, as well as links to resources that we create to assist agents. Ask your representative for more information. We can assure our agents that we, as a company, have reached out to all of our lender contacts and have a presence at all of the industry discussions taking place regionally and nationally through ALTA, the Mortgage Bankers Association and other trade groups. Further, we have reached out to software vendors (such as SoftPro, RamQuest) and have confirmed that they and the First American products (TARA, TSS and StreamLine) are on target to have all upgrades ready in time to do training for agents using them in early 2015.

*To read the Wells Fargo Settlement Agent Communication, visit: http://www.alta.org/advocacy/news.cfm?newsID=26035

Agency Today | Issue 2

BE CAREFUL OUT THERE By: Michele A. Green VP, Senior Division Underwriting Counsel First American Title

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2014 was a good year for First American Title – a year of growth in the midst of a challenging market. In the realm of claims losses, it certainly wasn’t a terrible year. The number of new claims coming in the door was way down, and the number of dollars out the door was even down a bit too. When we take a look at why we had the claims we had, however – 2014 was the year of fraud, forgery, identity theft and email-based cyber fraud. There are stories enough to fill this entire magazine of colorful and complicated impersonations, intricate forgeries and very simple lies, with losses to First American Title equalling more than virtually any other type of claim, and 2015 hasn’t started off any differently.

Email-based cyber fraud, in particular, has been downright startling in its pervasiveness, and our entire industry is under attack. Commercial transactions are at risk along with residential. Big cities and small towns, the attacks do not discriminate. How do you know if you are at risk? In our world, if you are involved in real estate transactions, money and financial information are changing hands, and parties are communicating by email – YOU ARE AT RISK! Even if you are positive that your own email security is top-notch, please keep reading.

Exactly what are we talking about? Picture this scenario: your office is engaged to act as title and settlement agent for a transaction which is the sale of a small commercial building. You order your title search and learn that, as part of the settlement, your office will be paying off a large institutional mortgage and a smaller ‘hard-money’ mortgage held by an LLC in the amount of $250,000. The address of the LLC lender is actually local – they even have a website – so your office calls and orders a payoff statement, which is duly received the next day via email, along with wire instructions for the LLC’s local bank account. A few days later, as the final details are being wrapped up for closing, you receive another email from the LLC indicating that they are having trouble with their local bank account, and they provide you with wire instructions for a different bank account. You replace the old wire instructions with the new and proceed with closing – the payoffs are wired out, the deed recorded. Sounds like a good day, right? Your office has earned a nice fee. Seller is happy, buyer is happy. What could be wrong? What if, two days later, you receive a phone call from the principal of the LLC and he’s looking for his payoff? You confirm to the principal that your office complied with the changed wire instructions received via the second email and had duly wired the $250,000. The principal tells you, “I never sent a second email; I never changed our wire instructions. I’m going to need my money, or we are going to start foreclosure!” What would you do? What about this scenario: your office is conducting a transaction which is a residential sale. The buyers are a wonderful couple who had been saving for years to buy a house in an area with great schools for their growing family. At their income level, they knew they’d need a large down payment to afford the monthly mortgage payment, but they’d done it. Their real estate agent found them the perfect house for $500,000 and they had $200,000 saved.

As the time for closing approaches, your office emails information about closing requirements, including wire instructions for your trust account, to the buyers. When the day of closing arrives, you notice that the buyers haven’t wired in their down payment and you call them to see what’s up. They confirm with you that they had received your second email indicating that you were having a security issue with your trust account, and providing wire instructions for a different trust account. They assure you that they have complied exactly with that second email. You never sent any second email. What would you do?

Email-based cyber fraud, in particular, has been downright startling in its pervasiveness, and our entire industry is under attack. Sadly, these scenarios are not hypothetical; both are true stories. The fact that they are just two of many like them is downright heartburn-inducing. In the first story, the LLC’s email account had been hacked into by criminals who monitored email traffic, waited until just the right time, and sent the email misdirecting the wire to their own account, where it immediately bounced to an overseas account. The fraudulent email was actually sent from the LLC’s email account, so that even if the person receiving the email hovered a computer mouse over the sender’s address, it appeared legitimate. In the second story, the real estate agent’s email account had been hacked by cyber-criminals. By monitoring emails exchanged about this transaction, the criminals not only learned of the large down payment but the identity, email address and logo of the closing agent. The fraudsters then created a completely fake email that appeared to be from the closing agent (a “spoof” email) and sent it to the buyers misdirecting the wire. Different stories with the same result – the money left the country and never came back. These scenarios have played out repeatedly all over the country more times than I care to remember with the same disastrous results.

Agency Today | Issue 2

Be Careful Out There (continued)

A few more tales of woe:

•

Real estate agent’s email account hacked; spoof email appearing to be from agent sent to funding lender, misdirecting funding wire of $680,000. Without confirming good funds, agent closes sale transaction. Real estate agent, seller and buyer email accounts all hacked; fraudulent email sent from real estate agent to agent cancelling transaction, copying seller, instructing agent to return $1.4 million cash deposit to buyer; fraudulent email sent from buyer, acquiescing to the cancellation and instructing agent to wire the funds to a particular account which was NOT the buyer’s account. Numerous instances of real estate agent commissions being misdirected due to real estate agent’s email account being hacked.

As you can see, it is not necessarily the agent’s own email account security that creates the risk, but often the security of another party’s email account, so agents can’t simply rely on their own security systems. Criminals could be pretending to be parties to your transaction and communicating with you; worse, they could be pretending to be you and communicating with your colleagues and customers!

What can we do about it? You might have heard from First American Title in recent months about these issues. When we hear of a new kind of scam, we are alerting our agents to them as quickly as we can, and awareness is growing; each week there are a number of success stories—frauds attempted but not completed—but each week we are also hearing from agents who have NOT heard of this yet. And sometimes, our agent’s principal has heard of it, but hasn’t passed the word along to staff members responsible for disbursements. What can agents do to protect themselves from this kind of risk? Unfortunately, there’s no easy answer, but we do know some things that help:

99 Wire and other disbursement instructions received by email should be confirmed by telephone at a known or independently confirmed number, not the telephone number at the bottom of the email you are trying to confirm.

Agency Today | Issue 2

99 Be especially sceptical of any change in wiring instructions. Who really changes their wire instructions that frequently?

99 Confirm that the account to which you are wiring is in the name of the party that is entitled to the funds.

99 Be especially sceptical of emails from the free “public” email account domains (we’re not going to call them out by name, but you know who they are). In nearly every one of our known fraud email occurrences, at least one person involved in the transaction is using one of those email accounts, and that was the source of the risk.

99 How do you provide YOUR wire instructions to customers? Some of our agents have decided to provide wire instructions via hard copy only, with a notation along the lines of “With cyber crimes on the increase, it is important to be ever vigilant. If you receive an email or any other communication that appears to be generated from [agent office] that contains new, revised or altered bank wire instructions, consider it suspect and call our office at a number you trust. Our bank wire instructions seldom change.” None of these is an easy, fool-proof method, so vigilance and a healthy dose of scepticism about emails that relate to the movement of money are our best weapons. There were some difficult days in 2014, as a result of frauds such as these—many of the scams result in losses not covered by title insurance, leaving agents and customers devastated. What we know for sure is that greater awareness of what the fraudsters are doing can make 2015 a brighter year in this battle against the bad guys. So keep your eyes open. Keep your ears open for alerts from First American Title. Keep the lines of communication open with your staff and customers. And BE CAREFUL OUT THERE!

why

TARGET MASS DATA BREACH

YOUR may FIRM be a for a

First American appreciates the literary contributions of independent vendors and the opinions stated herein are solely those of the author.

2014 has been tagged as “the year of the data breach.” There is good reason for this moniker; each week, news of the latest cyber-intrusion is being reported. It seems, no matter the amount of exterior layers of protection in place, such as firewalls, internal as well as external exploitation continues to occur. Companies of all sizes and By: Steven R. Russo Executive Vice President specialties should be protecting Secure Cloud Systems themselves should a data breach O: 719.323.6680 Ext: 120 occur. Fear of punitive actions C: 847.613.0486 F: 888.344.6556 from regulatory agencies, loss of srusso@securecloudsystems.com reputation, or possibly even the www.securecloudsystems.com destruction of an entity’s ability to continue in business are among a few of the risks associated with storing valuable information in a modern society. Discussions within the cyber arena indicate businesses have two different thought patterns regarding cyber security. A business either strongly believes they have been hacked or they believe they have not been hacked, when in fact; there has been an undiscovered breach in security or loss of data. Email continues to be the primary method utilized for business communication. Over time, cyber experts have learned that securing sensitive and confidential communication, data exchanges, and information that travels through email is a complicated challenge. By default, email is “open” as it maneuvers through the Internet as well as intranets. Email, not encrypted or protected in a secure manner, can potentially be read, intercepted or altered while in transit and before it arrives to its destination. To stop these exploitations from happening, end-to-end encryption of email was introduced and widely adopted in the business marketplace. Because email protection is a critical requirement for most business, the decision is not whether to implement email protection services, but rather what the best methodology is and how fast it can be best implemented with the easiest user effort.

There are two common methods currently provided in the marketplace for securing emails:

•

The first method, End-to-End Encryption, is similar to writing email in a coded sequence known only to you and the receiving party. This offers some protection for data in transit between point A and point B. The second method is the utilization of a platform or system, Enterprise Accounts, to execute and manage the overall communication process, providing some protection for data in transit as well as data at rest. Typically, the platform or system an organization implemented was chosen due to personal preference of the IT department; however, the possibility may still exist for exploitation of sensitive data without a user or an organization ever knowing that the loss occurred.

Communication containing sensitive information requires protection against unwarranted disclosure due to legal reasons, issues pertaining to personal privacy, or proprietary considerations and MUST be secured not only while in transit but at rest as well. While end-to-end encryption provides a layer of security for data in transit, it does absolutely nothing to protect the data at rest which is where a major security gap exists. To add perspective, a firm’s data at rest may be 50 times greater than the amount of data in transit. There are currently extensive vulnerabilities within systems of organizations who believed they had deployed the necessary safeguards to protect emails. Stemming from a lack of understanding, this is where Trojan Horse misconceptions and other types of exposure occur. A majority of email-encryption providers support integration into platforms such as Microsoft ® Outlook®. When an email is sent, an unsecured, open and accessible copy of the communication is immediately stored within the “Sent” folder on the local device. For Enterprise Accounts, a copy of the same information is simultaneously duplicated within their devices and also in the Cloud. Although appearing safe at first glance, a deeper inspection reveals exposure to significant threats.

Agency Today | Issue 2

Few Microsoft Outlook users open and close their email accounts more than once per day; some may not close the program for weeks or months. When Outlook® is left open, what is protecting files that have been left for extended periods of time in a “Sent” folder or in other file folders that have been created? The answer is, VERY LITTLE. At best, their system network provides protection, but only if the user and device is located in the office. Adding to the challenge, there may be hundreds of thousands of individual devices containing malware which allow outside threats to access the device and the sensitive information in the Outlook® folder system. Additional vulnerability also exists because we live in the age of mobile devices. The portability of laptops, tablets, and smartphones and the ever-expanding mobile access can result in the complete loss of the protection afforded by traditional network facility solutions.

•

A WiFi hacking device can be purchased quickly and easily for less than $100 and allows access to a vast majority of wireless local area networks within seconds. A hacker with very little experience can gain access to a device within 30 feet of a coffee shop, restaurant, airport, or while driving down a highway or residential street. Wireless Intrusion Prevention System (WIPS) offer some defences; however, few individuals make use of them. Turn-key packages are available allowing hackers to listen in on Internet traffic, obtain email sitting at rest or ask for credit card information in the standard payfor-access request. Recent studies found over 56% of laptops were broadcasting the name of their trusted WiFi networks and 34% were willing to connect to highly-unsecure WiFi networks. By sending a simple text message, hackers are gaining the ability to access information and change control settings, and the user would have no indication a breach has occurred. A firm specializing in mobile security recently highlighted this vulnerability in a demonstration using information found on a typical business card.

The security provider you choose plays a key role. Use caution when dealing with individuals or entities posing to be cyber experts who, in reality, are reselling products for other companies. When you do business with these types of firms, you are subcontracting your most sensitive security needs to an entity that is subcontracting to another security provider. Does this sound like a good business practice for your firm? Choose wisely and place your trust in those who are truly experts. If you require any guidance with this vetting process, please contact CertainSafe® for assistance.

or “No passwords needed, access your email quickly and easily without any need for additional authentication.” If the system is simple and requires limited authentication, hackers can waltz right in and retrieve your firm’s most valuable digital assets.

The portability of laptops, tablets, and smartphones and the everexpanding mobile access can result in the complete loss of the protection afforded by traditional network facility solutions. While some forms of automated credential methodologies can be more safely deployed, it is advisable to proceed with a high level of caution, ask additional questions and apply some oldfashioned common sense when you encounter these claims. Industry experts continue to provide education regarding the need to take action to protect digital assets at a much higher level. Businesses and individuals are beginning to respond and those that act sooner have a better chance of avoiding any negative impact. If you are relying on email encryption services or an Enterprise Account to provide the level of security outlined in Pillar 3 of ALTA Best Practices, the possibility may still exist for exploitation of sensitive data without a user or organization ever knowing that the loss occurred. There are solutions, some of which are provided by CertainSafe®, that can mitigate if not eliminate the challenges mentioned above. The utilization of an external platform or system to execute and manage the overall communication process protects data in transit as well as data at rest simultaneously. The premise is that if no sensitive communications exist or reside on the local device, then information cannot be taken or exploited from that device. Some feel this added security is too burdensome because it requires a little more effort on the user side. The cost associated with the loss of sensitive data is a significantly greater burden. Most would agree it would be best to protect against hackers and not have to deal with the ramifications of a data breach associated with standard email encryption solutions. Is your company unnecessarily at risk today? It is essential that you protect your firm’s sensitive information “One Byte at a Time!” Please contact CertainSafe® for more information. ®

Also prevalent in the marketplace are email providers who make statements such as; “There is no need for extra credentialing” 18

Agency Today | Issue 2

719.323.6684 | www.certainsafe.com

FOR SALE

Using 1031 Exchanges to Grow Your Business There has never been a better time to take advantage of the tax deferral benefits of 1031 exchanges The commercial and residential real estate markets are active, prices are up and investors are selling their properties at a substantial gain. Investors are also focusing more on holding property for investment purposes rather than for immediate sale. Moreover, the taxes that are due on the gain are significant. Depending on your income level, federal capital gains taxes are 15% to 20% of the gain, and you may also owe an additional net investment income tax of 3.8%. Some states also impose state taxes on the gain, so a seller can owe 15% to 35% in federal and state capital gains taxes.

How can title agents use 1031 exchanges to grow their business?

•

If you are handling a commercial sale, or a residential sale in which the seller doesn’t live in the property, ask the seller whether they plan to reinvest the proceeds. Some sellers don’t know that they can reinvest the proceeds in replacement property and avoid paying the capital gains tax. The tax is not due until the new property is sold, and can be deferred again if the seller does another exchange at that time. This benefit is only available to a seller who sets up an exchange on or before the closing and follows the other rules and timing restrictions, however. For example, the properties that are sold and purchased must be held for investment purposes or used in the seller’s business. Be prepared to discuss exchanges with the seller prior to the closing. Discussing exchanges with the seller may give you more knowledge of what the seller is planning in the near future, and could give you an opportunity to provide them with title and settlement services for the purchase they are planning. Educate your clients on 1031 exchanges. First American Exchange Company has brochures and articles you can use, a monthly emailed newsletter and monthly webinars. We can also provide in-person seminars to

•

By: Mary Kay Kennedy National Operations Manager, First American Exchange Company

educate you and your customers about 1031 exchanges. Increase your knowledge about 1031 exchanges. Understanding the basics of exchanging will differentiate you from your competitors and give you an additional tool to help your customers and their businesses. First American Exchange can be a resource to educate you on the basics and we are available when you have more complicated questions. Understand the importance of working with a strong, financially-secure exchange company. In an exchange, the intermediary must hold the proceeds of the sale. First American Exchange is a member of the First American Family of Companies and holds each person’s proceeds in a separate bank account. We never invest the proceeds in any securities. Always set up the exchange before the sale property closes. The rules require that the seller sign the exchange documents on or before the closing. When your client is ready to plan an exchange, we discuss the rules, ask for a copy of the contract and title commitment, and we use that information to create our exchange documents.

Exchanges are easy to accomplish, particularly when you work with the knowledgeable, customer-focused people at First American Exchange. If you would like to speak to a local representative, please go to our website (www.firstexchange.com) and click on the Locations tab. Agency Today | Issue 2

Insurance Solutions for The Business Professional E&O | Bonds | Property Office Liability/Business Business Auto | Workers Compensation

(877) 848-6147 WWW.FAPCIA.COM

Agency Today | Issue 2

TIME-SAVING TIPS for 2015

By: Lou Pontani, VP, Sales and Marketing, Agency Division, First American Title

Time is like money and once it is spent, it is hard to get it back. The better we spend our time, the more freedom we have to focus on the things that matter most. More often than not, the biggest gains in life come from spending time on things we didn’t have to do. For example, I didn’t have to write a handwritten note thanking a real estate agent for their business, or I didn’t have to dedicate 30 minutes a day to going to the gym.

Here are 10 time-saving tips to help you be more efficient:

Use a smart phone or upgrade to a better device.

Don’t multitask; focus on completing one thing at a time.

Text more.

Use your phone as a data hotspot to enable internet connection to other devices when you are on the road.

Use email inbox filters to keep communications organized.

Divide your to-do list into two parts; things you have to do and things you didn’t have to do. Make sure you spend 10% of your day on things you didn’t have to do.

Call people, it’s faster than typing emails.

Block out time for you on your calendar before someone takes it from you.

Invest in a headset for your desk phone.

If you’re a slow typist, invest in dictation software. You’ll get words onto your screen faster than any court stenographer.

Agency Today | Issue 2

YOUR SUCCESS IS OUR PRIMARY MISSION. That’s why we offer you more products and services than any other provider. From title and escrow production systems and natural hazard disclosures to commercial evaluations, we deliver solutions that span the entire real estate closing process—seamlessly integrating front office tasks with back office processes to make your life easier and your business stronger. We understand that real estate is a constantly changing, always challenging industry. Nothing is more important to real estate professionals than having someone on their side—an expert team with extensive experience,

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• SMS Vault – Online Data Backup Service

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• Rizolv – Consumer Complaint Management System

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Agency Today | Issue 2

800.767.7832 firstamsms.com Agency Today | Issue 2

Your network is the backbone of your business. Not only does it allow your company to effectively communicate and function, but it has the tough task of securely transmitting and storing sensitive financial and personal data. Compliance guidelines give the network an even tougher task, one that can result in serious repercussions, if not met. Ensuring your network is up to the job starts with an understanding of network basics. These include the main components of a network, network data storage, and network vulnerabilities as well as their solutions.

Agency Today | Issue 2

Main Components of a Network A companyâ&#x20AC;&#x2122;s computer network is a collection of hardware devices and systems linked together in order to communicate and share information. Sharing can be controlled and made possible for different files, software, operating programs, and hardware devices such as scanners and printers. The network also allows for seamless communication through methods such as email, instant messaging, and video conferencing. While networks can become as vast and as complicated as a company chooses, the main components remain the same. Each network contains various hardware and software components that form the framework necessary for the network to properly function. Hardware Components Four main hardware components make up the hardware end of the network. They are the firewall, router, switches, and hosts. Firewalls are security devices that protect your network from unwanted internal and external infiltrations. They serve as the entry point into your network with all incoming traffic encountering the firewall before going through any other stages. Likewise, all outgoing traffic leaving your network encounters the firewall as the last point of contact. Firewalls can perform multiple functions, the most basic of which are responsible for packet filtering: examining the protocol and IP address of each incoming and outgoing packet. The router is responsible for linking your computers to the Internet and hereby connecting networks so information can be shared between them. Routers take on the task of choosing the optimum path the information should follow to ensure the most rapid and seamless delivery. Switches are responsible for creating networks, sending information from a device directly to an endpoint. Switches can be used to connect printers, computers, and servers within a specific office or building, allowing the networked devices to communicate with each other. Hosts, also called end nodes, are the devices connected to the endpoints of the network. They can include PCs, handheld devices, laptops, and any other user device that sits at the end of the wired or wireless network. A networkâ&#x20AC;&#x2122;s server falls under this category, although it differs from other computers due to its role and large storage capacity. The server functions as the network administrator, controlling the other computer activity and access to network resources. Software Components Software components within a network include protocols, applications, and system software. A protocol is a common set of instructions and rules computers follow to communicate with one another. Because computers can communicate in dozens of different ways, there are dozens

of different protocols. One of the most common is http, which stands for Hyper Text Transfer Protocol, the primary protocol used for browsing and linking on the Web. Applications, also known as application software, are the network services users can enjoy within the network. Each application consists of a software program or group of programs that enable the user to perform specific tasks. Examples include word processors, spreadsheets, and database programs. Applications would not be able to function without system software, low-level programs that run in the background and enable application software to work. Examples include file management tools, compilers, and the computer operating system.

Overview of a Network and Data Storage One of the most vital functions of the company network is its ability to securely and efficiently store large amounts of data. Not only do special precautions need to be taken to ensure all compliance regulations are followed, but the data also needs to be easily accessible to authorized users. The most reliable data storage options will also provide some type of automated backup program to prevent the loss or destruction of critical data. The network storage option typically used for business networks is what is known as Storage Area Network or SAN. This storage option consists of a specific network designed to allow storage devices to communicate with computer systems and each other. While the earlier means of SAN interconnection used to be fibre channel technology, advances have allowed other viable interconnection options. Types of storage devices can also vary, consisting of disk arrays, tape drives, file servers, and other libraries or subsystems. SANs allow every single computer and server within the network to share all data as allowed and needed. This universal connectivity is a major benefit for business that need to share the same data on more than one computer at a time. It also allows for data created on one computer to be shared with another computer without the hassle of copying the data onto the second computer. Data from one computer is instead easily transferred to the storage devices, which is then accessible to other network computers and servers. Each server within the SAN can access the shared storage as easily as if the storage device were attached directly to the server. If a computer or other host needs access to a storage device within the SAN, the host sends out a request for the storage device. In addition to the actual storage devices, the main components of the SAN are cabling, switches, and host bus adapters or HBAs. Cabling consists of the physical cables that connect the Agency Today | Issue 2

Network Basics (continued) components within the SAN. Examples include coaxial cable, telephone twisted pair cable, and optical fiber. The switches and storage systems within the SAN must all be interconnected with cabling that can handle the bandwidth levels during peak data activities. Switches consist of the same hardware used within the regular network, devices responsible for sending information among the components to create the network. An HBA is a circuit device, often a circuit board, which is integrated into the SAN to process the input/output (I/O) and provide the physical connection between a storage device and a server. The HBA additionally takes on the data retrieval and storage tasks normally reserved for the server’s microprocessor which can enhance the server’s performance time. The ability to connect with all data stored within the SAN comes with multiple benefits. Unlike traditional storage solutions that involved storing data on multiple servers, you no longer need to transfer data between servers. You also no longer need to wonder if data being used by two computers on different applications is the most recent version of the data, as both computers are working off of the same copy of data. Because the SAN is holding every single shard of data, it requires high availability and built-in protection to ensure data is never destroyed, lost, or otherwise obliterated. Scalability is another must with the ability to add more end user computers and more storage as needs expand. A quality SAN will be able to handle an increased number of devices without compromising high data transfer rates or overall efficiency. It’s easier to establish a SAN that offers opportunity for expansion than it is to replace a SAN that is no longer viable for the company’s size and needs.

Network Vulnerabilities and Protection Business networks typically have vulnerable areas, although you can substantially decrease the risks of malicious invasion with careful analysis and protection. Vulnerable areas in most networks include weak passwords, allowing unused systems to remain active in the background, and routers and switches. Weak passwords are user passwords that are easy for hackers to guess, especially if hackers are aware of how many guesses they can launch before they’re blocked from entering. Regular password audits can help pinpoint weak passwords and ensure all admin accounts are configured properly. Using passphrases in lieu of simple, user-created passwords can also help keep hackers at bay. 26

Agency Today | Issue 2

A vast number of unused services can be running on your server. Because the services are not being used, security measures are typically not in place, protecting them from infiltration. The end result is an open door for invaders who know where to look for unprotected access into the network. Shutting down unused services can help as can regularly using a vulnerability scanner to pinpoint areas that need immediate attention. Routers and switches are other potentially vulnerable areas that are often overlooked. These devices typically come with Simple Management Protocol, or SNMP, with two default passwords in place. Hackers know this. This makes it possible for them to use the protocol to steal information, examine your traffic, and even control your network. Changing the default passwords can drastically reduce your risk.

Firewalls The job of the firewall is to protect the network, but there are still ways to get around them. Common techniques include phishing, password theft, errors in firewall management, or physical access to the firewall. Malicious intruders may bypass the network security perimeter by ferreting out an exposed path traveling only over routers. Rogue wireless access points or cables, or those installed without the authorization of the network administrator, can often create a clear path of entry that avoids the firewall altogether. Invaders may also create an account and then find a way to change the password of a connection server or the actual firewall itself. Intruders can then enter the network with the revised password to wreak their havoc. Keeping any firewall-related hardware in a secure area automatically reduces risk as does ensuring that any cables or wireless connections are known and authorized by administrators. Regular security updates, security patches to correct known vulnerabilities, two-factor authentication, and the use of encryption provide additional protection. Firewalls can be also be supplemented with additional security measures such as intrusion detection and prevention systems for the network as well as the hosts.

Image Workstations, Image Backup Image workstations refer to workstations that have been duplicated and contain the exact same information as the workstation from which the information has been copied. This practice can provide an efficient way to ensure all end users are using the same workstation setups while providing protection against data loss or destruction. The use of image backup gives you a strong combination of

data protection and disaster recovery with a single tool. Unlike the often slow and tedious traditional backup process, disk imaging software works by quickly capturing images of the hard drive for fast and easy recovery. Quality disk imaging programs will have high-end backup features, rapid recovery and restoration features, and the ability to auto-schedule and provide reports on the backups you perform. In addition to being incredibly simple to use, image backup is known for being fast, thorough, and incredibly flexible. You can restore a workstation from scratch or pick a later point prior to infiltration. You can also backup in a variety of means, such as physical-to-virtual, virtual-to-physical, virtual-to-virtual, and physical- to-physical.

Managed IT Security Firms Outsourcing your network security functions to a managed IT security firm is another option for strengthening your network security. Rather than investing in and managing the security functions yourself, you can choose a reputable firm that already has extensive experience and tools in place to keep your network safe.

Using a managed security service provider, or MSSP, frees up internal employees while boosting efficiency and cutting costs. Because security is their business, MSSPs are generally more adept at providing top-notch solutions to overall security and compliance. Another benefit is the up-to-date insider information MSSPs have on existing and emerging threats. Individual title and settlement companies typically don’t have the time, employees, or resources to perform the same type of in-depth security functions an MSSP can provide. Now that you have a firm overview of network components, data storage, vulnerabilities, and protection, you can take the next step to ensuring your network is up to par. You may need to change existing solutions, implement new ones, or otherwise make adjustments to suit the needs of your company, clients, or the ever-changing cyber landscape.

New Lending Disclosure Timeline Effective for loan applications received on or after August 1, 2015

Loan Estimate

Home Loans

2 Mandatory Disclosures

Revised Loan Estimate (if needed) 3

Meet with Lender

3 Business Days (Includes Saturdays if Lender is Open)

3 Loan Estimate

Permitted Changes:

3 Business Days

• Rate Lock • New Information

(Includes Saturdays if Lender is Open)

Revised Loan Estimate MUST be Minimum 4 Business Days Before Closing

Closing Disclosure in person

Constitutes Receipt

3 Business Days

Lender

Constitutes Receipt

mail

3 Business Days

Closing Disclosure

Changes require a new Closing Disclosure

3 Business Days

Settlement/Closing Agent (if Deligated by Lender)

May be earlier if actually received earlier e-delivery (proof of receipt as determined by lender)

Consummation

Changes require a new 3 Business Day waiting period if 1. APR changes beyond allowable limits; 2. Loan Product changes; 3. Pre-payment penality is added.

Agency Today | Issue 2

“Wait See” IS NOT AN EFFECTIVE STRATEGY

Agency Today | Issue 2

By: Tiffany J. Whitney Director of Learning First American Eagle Academy™

Regardless of what you’ve heard, waiting to see if you really need to implement the ALTA Best Practice Pillars or a Compliance Management System is a losing proposition. It’s not often, in our industry, that the crystal ball is as clear as the compliance demands that lenders will and must require from title and settlement service providers. If you have already implemented the ALTA Best Practice Pillars, you are no doubt reaping the rewards of good compliance with your lender clients. You are growing trust and securing the future for your firm. We applaud your efforts and hope to be counted among your trusted partners. It’s encouraging to see many agents have taken the difficult first step of writing policies and procedures. Don’t stumble at this point, move to implement because implementation can be a nightmare! It has more pitfalls than most changes because lack of adoption by just one employee could mean a program failure for you and your firm.

There are hundreds of different change approaches that may be used to launch a program, but there is one approach that works again and again in a fast-paced agency environment. The approach is simple and it starts right after writing policies and procedures. To create your implementation plan, begin by asking, “What do they need to know and when do they need to know it?” It sounds simple and it is. The first step is identifying all the impacted parties in your firm. This includes everyone impacted directly or indirectly by the policy, including employees and customers. Next, identify what the impacted parties need to know, followed by when they need to know it and how will they learn. Finally, confirm understanding and continue with ongoing confirmation.

Using a Consumer Complaint Policy as an example, here is a simple plan with the comprehensive implementation approach.

STEP 1

STEP 2

STEP 3

STEP 4

STEP 5

Impacted Party

What Do They Need To Know?

When Do They Need To Know It?

How Will They Learn?

How Do I Know Confirm They Understand? Compliance

Reception

How to receive, log and route a complaint

Day before policy effective date

Office Manager to train and test

Test 30 days after training

Escrow Officer/ Paralegal

How to receive, log, respond to and resolve a complaint to comply with company policy

Pass test Day before the Vendor to deliver policy effective date live training that includes policy and procedure training and use of new tracking system

All Employees

Understand the Complaint Within 30 days of Policy the policy effective date

Manager

Vendor to train Understand the Complaint 30 days before policy effective date Policy and procedures. How to respond, resolve, manage and read report logs to maintain compliance with policy

Mobile Notary

Where to submit a complaint

All Customers

How to submit a complaint N/A

Day before policy effective date

Via recorded webinar

STEP 6

Train and re-test Annually Annual training and testing

Completion certificate

Annual training and certificate

Pass test

Annual refresher training and testing

Instructional memo Sign receipt and job aid

Annual memo with signed receipt

N/A

Using this simple approach, you will be able to develop a road map containing the ‘who, when and what’ details for implementing your firm’s policies and procedures. Contact First American Title for assistance with your ALTA Best Practice compliance management program. Agency Today | Issue 2

The

Relationship Business By: Lou Pontani, VP, Sales and Marketing, Agency Division, First American Title

Agency Today | Issue 2

How many times have you heard the phrase “We are in a relationship business?” Real estate agents, title and settlement agents, loan officers, title insurance sales representatives and even home inspectors all use this phrase; but what does it really mean? Does it mean we are friends with all our referral sources? Required to live in the same town? Have kids in the same school? Attend the same community events? Perhaps, or, does it mean we built a healthy rapport and have their trust? Yes, but that’s not all of it.

No matter what business you are in or what job you hold, all of us have the same job responsibility; take the current state to the future state. To me, “being in the relationship business” means having enough trust with referral sources to have an open and honest conversation about how to make their business better. It also means being able to show a client something new about their business and getting them to take action to implement it. In a world where the number of competitors is tremendous and the core product is commoditized, the creation of differentiating your value requires not only being a flawless provider of competitively priced services, but to help your referral sources become better at what they do. It becomes the difference of working well in their business as opposed to working well on their business. Looking at real estate-related businesses from this angle; we’re not so much in the relationship business, as we are in the “success business.” We say we’re in the relationship business but I disagree, the “relationship” is simply the by-product of being in the “success business.” When we are in the success business, we:

• • •

Are experts not only in our business, but in the referral sources business too. We can show our customer something new about their business that is compelling enough to make them change. Help our customers navigate issues before they become a problem by offering perspective.

When we take this approach in highly commoditized businesses, the differentiator is less about the core services provided and more about the individual sales person, their insightful solutions and the overall service experience of the firm. As you probably already know being in the “success business” is not easy. Unlike a product that can be redesigned and rolled off an assembly line, our product is people, their actions, and the consistency of their actions. Our best sales people deliver action and provide insight because we are in the success business. Good customer relationships come our way because it is the natural byproduct of helping people and organizations become better at what they do.

Agency Today | Issue 2

DEVELOPING A

SOCIAL

STRATEGY The question is no longer “Is my target market on social media?” It's now, “Which social platforms are best to engage with my target audience?”

Agency Today | Issue 2

By: Sarah Shehata Social Media Program Manager First American Title

Social media is continually expanding and many of your customers are already there. It's important to keep up with customers and be ready to engage them online whenever the opportunity arises. However, if you aren’t cautious with how these new technologies are used, valuable time is spent without meeting the goals you set out to accomplish. What are your goals for social media? What tactics will you use to be successful and meet your goals? What measurements will determine if you are successful? This article walks you through these components and assists you in getting the most out of using social media for business purposes.

Set Your Goals The foremost question you want to answer is, “Why am I using social media?” Next, determine the ideal outcome you’d like to achieve for you and your customers. Begin by setting goals that are specific and measurable so you can identify tactics that work. A few examples: • Three new orders per month using social media. • Identify three industry-related Groups and participate in discussions twice a week. • Arrange one new-client meeting per week using social media.

Action What are your goals? 1.

________________________________________________

Identify Your Strategy Strategies will help you bridge the gap between your goals and the specific actions you need to take for success. What needs to change to accomplish your objectives? Here are some ideas to get you started: Create Awareness of Products and Services Raising awareness around your brand as well as your products and services helps people know what solutions you offer and how your company can serve them. Be Visible and Top of Mind Connecting with customers and prospects via social media is a great way to stay top of mind and remain on their radar when there is a business opportunity.

Get Referrals Social validation and acknowledgment can be a powerful influence. If you receive constant shout-outs of recognition from your customers, they are more likely to refer you to others. You can try to stimulate this activity online by asking for feedback from your satisfied clients. Listen and Learn Many great opportunities come from simply listening to your customers. By listening, you can learn more about customers and their challenges before jumping in to engage them. Build and Strengthen Relationships Relationships with your customers are the foundation of your business. In the course of conducting business, you socialize with customers every day. Social interactions build the framework for more meaningful relationships. Outﬂank the Competition Your competition is no doubt on social media. Investigate their pages on each social media network to see how much of a presence they have. It’s important to analyze their existing pages to determine their strengths and weaknesses in using social media. Become an Informed Expert Position yourself as an industry expert by keeping informed of the latest news affecting the industry. Follow news sources and see firsthand what topics are addressed, how they are posing discussions, and how receptive followers are to the information. Decide what you want to achieve using social media and select 1-3 strategies before moving on to the next step. 1.

________________________________________________

Agency Today | Issue 2

Research Your Marketplace Now that you have set your goals and selected your strategy or strategies, you will want to go out to the social platforms you are exploring and validate your decisions. Social Listening and Customer Analysis More often than not, people are so eager to get started they completely miss one of the most significant factors for success: Listening. Without this important foundation, how will you be sure you have selected the correct strategies to engage your customers? Go out to a few social platforms and listen to what your customers are saying. Learn what is keeping them up at night. What are their challenges and struggles? How frequently do they engage? How well-informed are they about current issues? How can you contribute and help? Market Trend Similar to the above, it’s important to learn what is currently trending in the headlines. A good way to learn is to find all your industry influencers (individuals, organizations, publications, news sources, etc.) and follow them. Study what they are sharing, how they are interacting with their audience, and what topics create more interest and engagement. These information sources are a good resource and enable you to reuse and share content with your friends and business contacts. Competitor Insight Gaining competitive insight will give you a head start on discovering what resonates with your target market. Find your top 3-5 competitors and research their activity. Jot down all the information you learned from this exercise. It will be used later in discussions about messaging and content sharing.

Plan Your Approach The research phase prepared you and provided you with information to help flesh out the tactics and approach you are going to take to achieve your goals. Next, identify specific steps you can take to support each strategy: 1. ________________________________________________

• • •

Develop Your Content Strategy All of the work you’ve done in the previous steps should enable you to develop a comprehensive content strategy for your social media campaign. Your content strategy should include: • What type(s) of content you plan to post and promote via social media • How often you will post • Target audience for each type of content • Who will create the content • How you will promote the content As part of your content strategy, you should create an editorial calendar. Your editorial calendar lists the dates you intend to post blogs and other content you plan to use during your social media campaigns. Your content strategy may also involve creating posts in advance, to be posted later. An internet search will reveal multiple tools available for scheduling posts to as many social media sites as you’d like. While developing a messaging strategy, make sure it is meaningful content that is aligned with the needs of your audience, relevant and appropriate to your brand, and supports your objectives. Give your audience a reason to want to follow your posts. This is your chance to build trust and credibility. In the above section, you collected information on competition, customers, and trends. Utilize this information and work it into your messaging.

Identify Success Metrics Identify what metrics you are going to use to measure success. A few examples:

•

2. ________________________________________________ 3. ________________________________________________

•

Some recommended tactics might include: • Listen as a tactic. Stay visible by interacting (liking and commenting) with others posts and sharing relevant

•

Agency Today | Issue 2

updates of your own. Identify three influencers and share posts from them that are relevant and helpful to your potential clients. If you have business contacts’ email addresses, send them a personalized email inviting them to join you on the social platform you are on. Search #hashtags around specific topics and join the conversations. (This is specific to Facebook and Twitter only.)

If one of your goals is getting referrals, your metric might be: How many new people (per week/month/ quarter) connected with you. If one of your goals is product/service awareness, your metric might be: How many people (per week/month/ quarter) mentioned you in their post and gave you a shout-out. If one of your goals is to stay top of mind, your metric

might be: How much engagement you get on posts divided by the number of your business contacts. Once you’ve begun your social media campaign, don’t sit back and keep doing the same thing over and over. Instead, check your analytics frequently to see how your campaign is performing. The next section will walk you through monitoring your strategy to ensure it is working and adjusting your strategy accordingly. Each audience responds to different content; you will need to experiment to see what resonates with your business contacts. Monitor How are people responding to your posts? Are they engaging? Is the content relevant for them? During the first 3 months, document the number of engagements you receive on posts and learn which topics get the most responses. Measure Set the above as a benchmark for you to compare with the following 3 months. This will help you determine how successful your content has been. Report Crunch your numbers and pull them together in a report you

can refer to and analyze what worked best and what didn’t work at all. Measure the effectiveness of your campaign based on the goals and metrics you set up when you began.

Adjust Your Strategy Once you have analyzed your current campaign, make sure you do more of what’s working and revise those items that aren’t getting results. Keep developing your strategy and content and continue using analytics to guide you throughout your social media campaign. If you are not seeing results, it may be attributed to any of the following reasons: • You may be in the early stages of building your book of online business contacts; make sure you are adding more connections regularly. • The more you interact with a specific person and the more they interact with you, the more likely they are to see your posts. • Your content might not be resonating with your target audience. Try changing the topics and make sure you are remaining authentic and real. • Questions tend to get higher engagements. Try posting short questions on specific, industry-related topics to increase interaction with your customers. • Video and images tend to receive much higher engagement than text updates. Try incorporating more videos and images in your posts.

Need an Icebreaker? Unless you have the most unique product in the world, nobody wants what you’re selling ... until they know you, like you and trust you. Oftentimes, getting the opportunity to make those first three connections with your new referral source means you need an icebreaker. Here are a few questions to start up the conversation.

• • • • •

What keeps you busy outside of work? How did you get involved with this event/organization/group? What’s the number one challenge in your business? How did you get into being a real estate attorney/agent/banker? What other groups do you find valuable?

Keep in mind two things always be smiling and people typically like to talk about themselves.

Agency Today | Issue 2

Outsourcing: A Strategy for Success

First American appreciates the literary contributions of independent vendors and the opinions stated herein are solely those of the author.

Is there a more volatile industry than the title insurance industry? One of the big problems facing the title industry is the “feast or famine” structure caused by the huge, often unpredictable, fluctuations in transaction volumes and the resulting impact on revenue.

By: Prashant Kothari Founder and CEO, String Real Estate Information Services ppkothari@stringinfo.com www.stringinfo.com String is a premier provider of back-office, technology and consulting services for the title industry. All along, String’s overriding mantra has been “inch-wide, mile-deep”. Over

Title revenues wax and wane with mortgage volume, which are in turn mostly dependent on an uncontrollable and volatile external factor— mortgage interest rates. Alas, no one—media’s talking heads, economists and assorted pundits—has yet come up with a reliable interest-rate forecasting model.1 For instance, mortgage refinance volumes plummeted in 2013 due to an uptick in mortgage interest rates. So much so, many title agents, especially those focused on refinance transactions saw their revenues fall precipitously—in some cases as much as 70% in two quarters.

the mortgage purchase market has its own issues with volatility, whether its secular swings (the housing bubble and bust we saw in the last decade) or seasonal variability (the sluggish first two quarters of 2014 being a prime example). Here is the rub: while revenues are hugely volatile and unpredictable even in the very short-term (less than 20 days), the expense side of a title agent’s P&L is mostly fixed over the medium-term (6 months or so). The single biggest expense is payroll given the laborintensive nature of most title processes such as production, curative, closing and post-closing. At the risk of sounding facetious, it would be fair to say most title companies are optimally staffed a dozen days per year– the rest of the time, they are over-staffed or under-staffed visa-vis their volumes.

the last 11 years, String’s team has helped clients process over 14 million transactions, saving

Good news: mortgage purchase volumes are not as volatile as refinance volumes.

Most title agents do not want to hire and fire staff every time volume fluctuates. However, to maintain profitability and even ensure longterm survival, agents need to come up with a new strategy.

Bad news: refinances have constituted 60% to 90% of mortgage volume over the last 13 years. If the title industry were to rely on mortgage purchase volume alone, the industry would shrink to 40% of its current size. And besides,

VARIABLIZE, VARIABLIZE, VARIABLIZE2 “Variablizing” costs by outsourcing back-office processes such as typing, title and tax searches, post-close review and recording is a solution many title agents have adopted with success.

You might argue, “But we aren’t a refi shop. Our forte is the resale and purchase market.”

them an estimated $110M.

Agency Today | Issue 2

Outsourcing enables title agents to maintain a core staff of critical employees and variablize the cost of everything else.

•

Many title agents equate outsourcing with offshore outsourcing. However, onshore outsourcing options exist as well. String Real Estate Information Services provides both offshore and onshore outsourcing solutions for title agents.

•

Checklist for Approaching Outsourcing 1.

1 2

What tasks would you potentially like to outsource? If you’ve never outsourced before, start with the simpler tasks like order entry, tax certificates or commitment typing. While evaluating outsourcing vs. doing it inhouse, make sure you’re comparing apples to apples. How important are cost considerations? If you want savings and variable costs, look for offshore options. If variable costs are the only consideration, onshore outsourcing might be the way to go. Who should I outsource to? Ask your peers and colleagues in the title industry, who have used outsourcing, to recommend a vendor based on their experience. Another great resource is LinkedIn. Screening an outsourcing vendor • Check the vendor’s data security standards. Do they have an ISO certification and an SSAE16 attestation? If so, the ALTA Best Practices Pillars relevant to outsourcing are already covered. • What is the outsourcing firm’s track record? You want someone with proven experience and expertise versus a fly-by-night operator. If someone is offering you a price too good to be true, beware. There are dozens of offshore data entry shops masquerading as title processing experts. Be circumspect, be cautious. • How familiar is the vendor with the intricacies of title processes, and with the technology platforms within the industry? • How quickly can the outsourcer handle the transition and scale up? If you have to train them from scratch, that’s defeating the purpose. • How does the vendor train their staff and what is

•

their attrition rate? High turnover rates can lead to increased training time/cost and fluctuations in the quality and consistency of their work product. Perform a small pilot-test to assess quality of work and communication protocols, and to synch expected outcomes on both sides. Once you’ve finalized the vendor, define performance metrics and scorecards; the more specific, the better. Make sure you have a well-structured agreement and statement of work. Ideally, you want a vendor incorporated in the United States (US), so you have recourse to US laws. If you are looking at significant volumes, you should consider visiting the outsourcing firm’s operations centers and doing an on-site audit of the company, people and processes, as well as its technology and infrastructure.

If done with the appropriate planning, outsourcing can help title agents effectively manage the inevitable spikes and troughs of our industry. Three points to keep in mind:

• •

•

It takes time and effort to select the right partner with the capabilities and best cultural fit with your firm. Getting your internal “ducks” lined up, key decisionmakers as well as the appropriate processes and workflow, will assist in determining the best solution for your outsourcing needs. An outsourcing partnership is an ongoing, two-way street that requires constant communication—daily, weekly, monthly, quarterly—between parties to return the greatest benefit.

If anyone could really predict mortgage interest rates, they’re going to be buying options and futures contracts, not at a title agency. With all due apologies to Messrs. Merriam and Webster, this is a word we’ve coined.

Agency Today | Issue 2

AGENT

SPOTLIGHTS C 38

COUNSELORS TITLE, LLC

Agency Today | Issue 2

AGENT SPOTLIGHT

Counselors Title, LLC Q A

Q A

How did you get started in the title business? It was 1992 and my wife was pregnant with our first child. I had earned my Real Estate license while in college and was selling new homes. I had to work every weekend at the sales site but had a few days off during the week. So in order to make a few extra bucks, I became an assistant to a processor at a friend’s title company where I was making $10.00 an hour. This was at the beginning of a “refi boom.” My 5th day on the job, our lobby was getting backed up with customers waiting to close. Not needing to be licensed back then, I grabbed a file and had the customers sign documents. It turned out I was a good fit for the company and I really enjoyed the work. I have been fortunate to stay with the same company (or its successor) for my entire career in the title business. What is the #1 goal your company is looking to achieve in 2015? Profitability. At the end of the day, this is what matters. We need to streamline our processes and continue to service our clients at the high level they have come to expect. Profitability enables us to be an employer of choice; we attract and retain the highest calibre of employees in our area.

TIMOTHY C. MULLIN, CLTP MANAGING MEMBER Counselors Title, LLC Office Locations: DC, MD, VA www.ctitle.net

Counselors Title, LLC is a dynamic, independently owned and operated Title and Escrow Company serving Washington, DC, Maryland and Virginia. Experience, integrity, service and community are the core principles of our company, and through which we have built a reputation as an industry leader in one of the most active and competitive real estate and mortgage markets in the country.

Q A

What words does a client think of when they hear your company name? “Yes”, “I know them”, and “They are great.” We have spent a great deal of time, energy and money to build a “brand” in a very crowded market.

Q A

What area of your company would you like to improve? Management. I need to continue to get better to keep up with my partners, employees and clients. As the leader, it is my job to create our vision and to ensure we make the time to invest in planning and training. We are on the cusp of major changes in how we conduct our business. We need to be ahead of the curve and ready to perform our core functions based on an ever-changing regulatory environment.

Q A

In 10 years, how do you think the title and settlement business will look? I believe the next eighteen months will be a good bellwether as to what the next 10 years will bring. Once the new rules for doing business are vetted thru production, we will be able to determine the role of the title agent in the process. I believe we will see a change in who controls the referral of business to a title company. The lender is going to have a much greater say in who is going to conduct a closing. I believe there will be more national title companies that are owned and controlled by the loan originators. I also see lenders getting into the real estate brokerage field. If the regulators are going to hold them liable for the entire process, the banks are going to need to control who is doing the work and how it is being done.

Q A

Why do you do business with First American Title? Golf balls. It’s 1994, I now have two kids. I am in the title business so I am broke. I get invited to play golf with the president of my company and one of our largest clients. I had a hand-me-down set of clubs, an ugly swing, and no golf balls. We did not write with First American Title at the time, but it just so happened that an agency representative came cold calling with a few sleeves of Titleist golf balls. We had a nice conversation and began a relationship that resulted in our company signing an agency agreement within six months. That began a relationship that has lasted over 20 years. Golf balls only go so far, particularly with my swing, but the resources First American Title has been able to provide thru underwriting support, technology advances and local knowledge are unsurpassed in our market.

COUNSELORS TITLE, LLC Agency Today | Issue 2

AGENT SPOTLIGHT

Diversified National Title Agency Q A

How did you get started in the title business? I began my career in the title industry when I was 16 years old, by working part time learning the basics of the title industry at the First American Title office in St. Johns, Michigan. As I observed my mother grow in this industry, I decided I wanted to follow in her footsteps and 28 years later Iâ&#x20AC;&#x2122;m still in the title industry.

Q A

What is the #1 goal your company is looking to achieve in 2015? The number one goal for me this year is to continue to be CFPB compliant and grow market share through acquisition and marketing strategies.

Q A

What words does a client think of when they hear your company name? The first thing people think of when they hear Diversified National Title is commercial title leader. We have built a great commercial team here in Lansing, and pride ourselves on being part of some of the largest commercial title transactions completed in the greater Lansing area. As our clients continue to expand outside of the greater Lansing area, we hope to expand this model into other areas throughout the coming years.

Q A

What area of your company would you like to improve? I would like to improve upon how we produce the title commitment and deliver it to our clients. With all the products that First American Title makes available, I would like to increase our opportunities to use these products in an effort to become more efficient.

Q A

In 10 years, how do you think the title and settlement business will look? It is difficult to pinpoint what the title industry will look like in 10 years, but if I had a crystal ball I would say it would be more like the P&C industry with the underwriter producing the commitments and the agent being more of an escrow agency than a title agency.

Q A

Why do you do business with First American Title? We choose First American Title for many reasons, but foremost because of their strength in the industry. With all of our commercial clients, it is important we have the strength of the First American Title paper behind us. It is my belief that their strength will become even more important going forward.

BRENT E. WARNER OWNER AND PRESIDENT Diversified National Title Agency 500 East Michigan Avenue, Suite 203 Lansing, MI 48912 www.DiversifiedNational.com

Diversified National Title Agency offers a complete range of commercial and residential title insurance products and other real estate fulfillment services to individuals, brokers, lenders, and real estate agents throughout Michigan and beyond.

Agency Today | Issue 2

AGENT SPOTLIGHT

Cislo Title Company Q A

How did you get started in the title business? While attending the University of Michigan in Ann Arbor, I worked for my girlfriend’s father, John Cislo, who managed a First American Title office. Together, we opened Cislo Title Company in 1990.

Q A

What is the #1 goal your company is looking to achieve in 2015? We have two goals of equal importance at the top of our 2015 list: Increasing market share through acquisitions and the implementation of procedures outlined in the ALTA Best Practices Framework.

Q A

What words does a client think of when they hear your company name? This is an easy one: Customer Service. We pride ourselves on consistently delivering a level of service that exceeds our customer’s expectations. We have been in business for 25 years and satisfied customers are directly responsible for the level of success we have achieved in the industry. It’s important to us to know that every customer who attends a closing would confidently recommend Cislo Title because they were highly satisfied with the exceptional customer service they received.

Q A

What area of your company would you like to improve? We are always striving to incorporate the latest technology to streamline our processes and improve the customer experience. The use of technology is something we are always striving to improve. The more quickly technology advances, the more difficult it becomes to know how much to invest in upgrading or purchasing new systems because there always seems to be something better coming in the near future.

Q A

In 10 years, how do you think the title and settlement business will look? I believe the title business will look much like it does today, but with much more consolidation among title agencies.

Q A

Why do you do business with First American Title? Since we opened the doors in 1990, First American Title has been our underwriter. They are a wonderful company with many resources to assist us in growing our business. Our agency representative, Diana Parker, is a helpful, knowledgeable professional and one of the main reasons we continue to choose First American Title as our underwriter.

MATT DELECKI VICE PRESIDENT Cislo Title Company 11 Office Locations www.CisloTitle.com

Cislo Title Company is a full-service title company providing title insurance and closing and escrow services for residential, commercial and new construction transactions. With offices in Flint, Fenton, Lapeer, Northville, Livonia, Bloomfield Hills, Clinton Township, Ann Arbor, Howell and Owosso, Cislo Title Company has been serving Genesee, Wayne, Oakland, Macomb, Livingston, Lapeer, Saginaw, Shiawassee and Washtenaw counties— and the entire state of Michigan for nearly three decades.

Agency Today | Issue 2

Orange Coast Title Company Q A

How did you get started in the title business? Unless it is a family business, nobody dreams about being in the title industry; but once it is in your system you cannot imagine doing anything else. Although everyone has a unique story about how they got in the title insurance business, I do believe mine is more unique than most. I was practicing real estate law with one of the top firms in Denver when I was approached about performing the legal work for a small, commercial title agency located in the Front Range of Colorado—which was planning reorganization. While I did not know much about title insurance, except ordering it and reviewing the commitments, the more I looked at the business I knew I wanted to be a part of the company. So, I purchased a 50% stake in the company and resigned from my law firm.

WILLIAM D. BURDING, JR. EXECUTIVE VP / GENERAL COUNSEL Orange Coast Title Company 26 Office Locations www.octitle.com

Since its inception in Orange County, California in 1974, Orange Coast Title and its Family of Companies has steadily grown into an operation that directly writes title insurance in 47 states and every county in California. Its ability to expand into one of the largest title agents in the country is attributable to its enduring philosophies that “The Customer is King” and “We Close Deals”.

As I walked in on my first day, I was hit by a horrible revelation: everyone at the company knew more than I did ... and I was the boss. My position as COO/General Counsel was in name only. So I put my ego aside and vowed to learn everybody’s job; receptionist, courier, searcher, examiner, sales and escrow officer. It took several years, but I knew every step along the way, could do any job in a pinch and had an appreciation for everyone’s role in delivering quality service to the customer. I think that was the best education I could have possibly received and feel very lucky to have had that opportunity. I sold my interest in the company, as I wanted to come home to California, and feel fortunate to have joined an agency the quality of Orange Coast Title (OCT) and its Family of Companies.

Q A

What is the #1 goal your company is looking to achieve in 2015? Putting the obvious goal aside that every business has every year—profit—I look at 2015 as the year of opportunity. Dodd-Frank certainly creates a new dynamic; greater than I have ever seen. But, with challenge comes opportunity. For OCT, it starts with adoption of the ALTA Best Practices and achieving an SSAE 16 SOC 1 Type 1 and SOC 2 Type 2 certification with no exceptions. We painstakingly reviewed the ALTA protocols and followed them to the letter. It has given our lender clients comfort that they are working with a company that steadfastly protects consumer information and follows the highest standards of the industry. I am proud we were on the forefront of achieving this certification. Along with that are the changes in the closing process and making sure our propriety software is ready for the implementation. Thus, our number one goal is to be prepared and ready to close deals under the new rules come August 1st. The companies that are the most prepared are the ones that will thrive through these changing times.

Q A

What words does a client think of when they hear your company name? “We close deals.” We believe our number one job is to close deals for customers; the more difficult the transaction, the better we can demonstrate our underwriting ability. That does not mean being cavalier and taking chances, but rather examining the transaction from all angles, assessing the actual risk and working to get the deal closed. We don’t believe in saying no until all avenues are exhausted, and it has been reviewed at the very highest levels of our company. 99% of the time we come up with an option to close the transaction. It is this deal-closing philosophy that cumulatively is the OCT way of conducting business.

Q A

What area of your company would you like to improve? I think every company strives to get better and more efficient in every facet of its business every year and this year is no

Agency Today | Issue 2

exception. Every one of our systems needs to be examined and reexamined and pulled apart to garner greater efficiencies. This business gets more and more competitive and if you are not progressing, you are regressing.

Q A

In 10 years, how do you think the title and settlement business will look? I wish I had that crystal ball and could tell you; we are going to see a lot of change over the next two years. I believe agents will still be a very important part of the title and escrow process, but it has to be agents who take compliance with Dodd-Frank and the ALTA Best Practices very seriously. Those companies not taking those changes to heart, and adapting their companies accordingly, will be on the outside looking in. How the next two years take form will go a long way in determining how the industry will look 10 years into the future. Why do you do business with First American Title? For us, it starts with the underwriting capability. First American Title has some of the best underwriters in the business who are willing to look at transactions in the totality instead of taking a myopic view which could scuttle a transaction. Also, our company has a long-term relationship with First American Title which we value and it improves each year.

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Agency Today | Issue 2

From the Field

Implementing Best Practices Q A

REBEKAH BEAL

Q A

How long did it take you to complete your best practice implementation? Complete? I donâ&#x20AC;&#x2122;t think we will ever be done implementing best practices so long as the CFPB is funded. In all seriousness, this was a process for us that took several years.

What was the toughest part about implementing your changes and how did your company overcome these challenges? Changing our mindsets and the mindsets of our staff was difficult. We have a large number of staff that has worked for us for more than ten years. Getting them on board with the changes was hard. However, our staff has really embraced all the changes we have made. This was not an overnight process for us and that helped. Everyone was able to accept small changes over time. Another challenge we faced was the sheer cost of implementing the type of security and technology required. Again, we purchased equipment and updated technology/security systems over time.

SHAREHOLDER Stephens Millirons, P.C. 120 Seven Cedars Drive Huntsville, AL 35802 www.smpclaw.com

Since 1973, the attorneys at Stephens Millirons, P.C., have served clients in the state of Alabama. We pride ourselves on service-oriented representations of our clients, using a team-oriented approach to capitalize on the diverse knowledge and experiences of our attorneys. Stephens Millirons, P.C., has maintained an active role in local and State civic and legal organizations, requiring its attorneys to demonstrate leadership and involvement in the communities.

Agency Today | Issue 2

When did you first start to approach implementing best practices in your company? Our firm has a large default servicing practice, so we have been under very intensive scrutiny and audits from mortgage companies for many years now. Implementing best practices has been an involved process over the last several years.

Q A

How have you used best practices to further market your company? With all the new regulations constantly coming down the pipeline, we believe that lenders are going to take a more active role in who is closing loans for them. Letting lenders know you are fully in compliance with all the regulations is key.

What type of activities has your company completed to educate your referral sources about best practices? We believe the key is letting them know you are in compliance and also advising them as to their own need to implement best practices.

A Q A

How have you communicated with your lending partners about your best practices implementation? We have undergone numerous audits from lenders over the years. An audit from a lender isnâ&#x20AC;&#x2122;t something to be concerned about. We like to think of it as our time to shine and any chance to meet someone from a national mortgage company face to face is a good thing.

IMPLEMENTING BEST PRACTICES

Q A

When did you first start to approach implementing best practices in your company? Although many of ALTAâ&#x20AC;&#x2122;s Best Practices (ABP) have been standard operating procedures of Judicial Title over the years, we have officially adopted the practices as of September 1, 2014. We are currently reviewing all of our policies as they relate to ABP and are amending and documenting them accordingly. How long did it take you to complete your best practice implementation? Many of the practices were already common place at Judicial and it has taken approximately 6 months to create the framework for all 7 pillars. We are in the process of compiling the data for HA&W, who will review our policies to confirm and attest that we are compliant. Once the data is reviewed by HA&W, there will be a remediation period to correct any deficiencies. We estimate the implementation and completion of ABP from start to finish will take approximately one year. What was the toughest part about implementing your changes and how did your company overcome these challenges? The toughest part of the implementation process was altering various security measures with respect to Pillar #4. It was the most difficult and time-consuming and our IT department spent countless hours reviewing all IT applications for their security measures and made changes when necessary. In addition to the written policies, the day-to-day implementation is difficult because our employees must be retrained on how to perform certain aspects of their job.

Q A

How have you used best practices to further market your company? We market the ALTA Best Practices through our website and our title reports. Once we achieve our certification, we plan to notify lenders and attorneys so they know we take the necessary security measures to protect the consumer.

What type of activities has your company completed to educate your referral sources about best practices? We will be creating a comprehensive mailer in the near future discussing the importance of the ALTA Best Practices and our adherence to the requirements. We also plan on scheduling CLEs to educate our clients on the importance of ABP and to discuss the impending requirements to be imposed by lenders.

Q A

RICHARD GILIOTTI PRESIDENT AND CEO The Judicial Title Insurance Agency, LLC 800 Westchester Ave., Suite S-340 Rye Brook, NY 10573 www.judicialtitle.com

Since 1978, the legal staff and in-house, company trained, title closers at Judicial Title has served clients in the state of New York. From proprietary computer applications to a cutting edge website, they offer the finest and most efficient resources to their clients.

How have you communicated with your lending partners about your best practices implementation? In the near future we will be blast emailing an electronic version of the ALTA Best Practices along with an explanation of our commitment to the security of the consumer. We believe lenders will require an attestation from a qualified 3rd party showing we have been appropriately vetted and are certified as ALTA Best Practice compliant.

Agency Today | Issue 2

IMPLEMENTING BEST PRACTICES

Q A

How long did it take you to complete your best practice implementation? We obtained the first certification for Pillars 1, 2, 4-7 in January of 2014 and the final certification for Pillar 3 in March of 2014; approximately one year from beginning to end. Itâ&#x20AC;&#x2122;s important to note that we did everything internally, except IT, using our existing resources and it was a project undertaken while we all maintained our full-time jobs. I assume the time frame could have been shorter if we had dedicated additional resources or outsourced the preparation.

What was the toughest part about implementing your changes and how did your company overcome these challenges? Two areas were challenging; (1) maintaining the momentum as we worked on the project while growing the business and (2) upgrading all workstations, servers and firewalls to be compliant. We prevailed through the long time frame by telling staff these efforts will separate us from the competition and made sure we introduced training during the process to keep them engaged. This project has no end date; itâ&#x20AC;&#x2122;s an ongoing process that involves a change in how we will constantly manage our business to identify and mitigate operational and technical risk. Staff training is a must.

VINCENT J. CASSIDY CEO Majesty Title Services, LLC Offices in Tampa, FL and Babylon, NY www.majestytitle.com

Our mission is to provide the finest, most innovative title solutions in the industry. We will support our professional clients by helping them grow and expand their businesses while serving the public with integrity. Our expertise and service will differentiate us from the competition.

When did you first start to approach implementing best practices in your company? Our company started the project in the spring of 2013. First, we reviewed all of our documentation, procedures and policies. An assessment of our technical infrastructure was performed by our IT vendor to see if upgrades were needed. I hired a CPA firm to assess Pillars 1, 2, 4-7 and an IT security company with expertise in auditing companies with federal regulation requirements for Pillar 3.

Q A

How have you used best practices to further market your company? After we obtained both certifications, we released a message to the press and sent a notification to our clients that had a dual purpose. Our first intention was to inform clients we had obtained a certification held by very few agents in the industry and country. The notification also informed them about the changes coming to our industry and eventually, this type of certification was going to become a requirement for an Agency to remain in business. We suggested to our clients and prospects that they prepare for these upcoming regulatory changes by only doing business with an Agent certified in ALTA Best Practices.

What type of activities has your company completed to educate your referral sources about best practices? We used direct communication, press releases and made changes to each staff memberâ&#x20AC;&#x2122;s email signature block to include our certification. As we provide training for bankers and real estate agents, we mention the industry trends, the initiative ALTA has undertaken to raise the bar with the Certification process and make sure training participants know we have already obtained the certification. We also make sure our clients understand these industry changes and new requirements may reduce the number of agents, as some agents may

(continued)

Agency Today | Issue 2

IMPLEMENTING BEST PRACTICES

Q A

When did you first start to approach implementing best practices in your company? University Title Company (UTitle) started the process of putting its practices on paper in February 2014 when it became apparent lenders were going to need written assurances that UTitle is a good business partner. Texas is already a highly-regulated state so many of the seven pillars of Best Practices were already in place. UTitle broadened its procedures in the protection of nonpublic personal information (NPI), but otherwise it was more a process of committing the best practices to a written version. The final draft was completed in August. Management and administrative staff are responsible for maintaining the current information, training and implementing. A folder was set up on UTitle’s shared drive in order to have one location where new escrow officers can be added, insurance updated, and other dynamic information can be easily amended. It is one place where UTitle can quickly put together the most upto-date information.

Q A

How long did it take you to complete your best practice implementation? Since the majority of the best practices were already being met or exceeded by UTitle’s current processes, implementation was minimal for the company. The enhanced protection of NPI in restricting work areas to authorized personnel only and encrypting email took a few months to implement. University Title needed the time to hire vendors to install security sensors and vet encryption software companies for email.

What was the toughest part about implementing your changes and how did your company overcome these challenges? The toughest part of implementing the changes for UTitle was finding an efficient, easy-to-understand way to commit the best practices procedures to writing. Texas Department of Insurance already ensures compliance with solid accounting, settlement and fiduciary duties with their bi-annual audits, as well and routine audits by University Title’s multiple underwriters. UTitle overcame these challenges by listening to industry leaders, the Texas Land Title Association representatives and its wonderful underwriting staff. Knowing the company was not alone in its challenge made the transition easier.

Q A

How have you used best practices to further market your company? In celebration of implementing the best practices, University Title took American Land Title Association up on its offer to create a video of the team dancing to Pharrell Williams’ “Happy.” UTitle’s team members enjoyed dancing. Clients visiting or passing by took pleasure in watching the employees boogie, and the response to the video on social media outlets was outstanding; it proved to be the company’s most popular post!

CELIA GOODE-HADDOCK CHAIRMAN OF THE BOARD, CEO University Title Company

KAREN CARROLL PRESIDENT, COO University Title Company 1021 University Drive East College Station, TX 77840 www.utitle.com

(continued)

Agency Today | Issue 2

IMPLEMENTING BEST PRACTICES

Majesty Title Services, LLC (continued) decide to forego the certification process. We suggested clients should be proactive in asking agents to confirm they have met the industry’s Best Practices by providing documentation of an independent certification.

Q A

How have you communicated with your lending partners about your best practices implementation? Our lenders were the first recipients of our communication which was provided via email, telephone and in person. Smaller lenders are not as aware of these industry changes, so we strive to educate them on the importance of doing business with Agents who are certified. Shortly after we obtained our certification, one of our lenders requested proof of documented procedures and controls in place along with proof of our participation in a risk assessment by an independent organization such as a Certified Public Accounting firm. Lenders are already looking for our compliance with ALTA Best Practices.

University Title Company (continued) University Title has used the best practices as a marketing tool by being the initial company in its market area to provide best practices information to customers.

Q A

What type of activities has your company completed to educate your referral sources about best practices? University Title began educating referral sources about best practices when the management team learned of them. With clients who comfortably expect to visit team members in the back of the office, it was necessary to notify referral sources that they would no longer be able to visit the areas of the office where NPI was available without being escorted by a team member. Encrypting email containing NPI warranted the same safeguards. Announcements were made during sales meetings at real estate offices. Email was sent to all clients, and phone calls were made to specific clients who frequented the areas that became inaccessible without escort. The completion of implementing the best practices was exciting for UTitle, so it was highlighted via the company’s social media posts.

Q A

Agency Today | Issue 2

How have you communicated with your lending partners about your best practices implementation? University Title’s local lending partners received a flash drive of the company’s Best Practices Manual along with a letter explaining its contents and relevance.

The fast track to compliance using ALTA Best Practices

Our ComplianceSuccesssm program uses ALTA Best Practices to provide a proven roadmap that helps you retain and grow your existing mortgage banking relationships.

Get Started Today. Contact Kim McConkey, Partner, HA&W ComplianceSuccess sm program kim.mcconkey@hawcpa.com 404-898-8237

ÂŠ 2014 Habif, Arogeti & Wynne, LLP

Agency Today | Issue 2

TRID Countdown

Is Your Software Ready? Big changes are coming for the mortgage, title and settlement communities in August once we start using the new TILA-RESPA Integrated Disclosure (TRID) forms. When Congress enacted the DoddFrank Wall Street Reform and Consumer Protection Act in 2010, they created the Consumer Financial Protect Bureau (CFPB) to protect By: Terri Parnell Industry Initiatives consumers by carrying out Federal Advocate, SMS consumer financial laws. Dodd-Frank also mandated the integration of the RESPA (Real Estate Settlement and Procedures Act) and TILA (Truth in Lending Act) disclosures. This mandate brought us the highly anticipated TRID forms—the Loan Estimate and the Closing Disclosure.

There are many things for a settlement agent to consider before the August deadline. They’ll need to ensure the software they use for their closings can produce the new Closing Disclosure and their staff knows how to use the program. Education on the new rules and forms is critical. National industry associations, such as the American Land Title Association (ALTA) and American Escrow Association (AEA), along with software vendors and local associations are great resources. Another key component to success is for agents to reach out directly to lenders in an effort to understand their plans and procedures. Agents should also talk to their real estate agent clients to make sure sales agents and brokers understand there is much more to the TRID rules than a few new forms.

These TRID forms will soon replace the current forms used during application and closing for most loans. The Loan Estimate replaces the early TILA statement and Good Faith Estimate and is provided to consumers by the lender within three days of the loan application. The Closing Disclosure discloses the details of the consumer’s closing costs and loan terms. It replaces the final Truth-in-Lending statement and HUD-1 Settlement Statement and must be received by consumers three business days before consummation. Much of the information on the Loan Estimate is repeated on the Closing Disclosure. The formats of the two new forms are very similar to each other so that the consumer can easily perform a side-by-side comparison.

new forms. SMS’s TitleExpress and StreamLine

At SMS, we’ve devoted an extraordinary amount of time preparing for the TRID forms and their impact on our clients. While adopting two new forms may seem simple on the surface, there are also changes to policies and processes that our clients will need to implement.

Agency Today | Issue 2

One of the ﬁrst things for agents to address is updating their software to accommodate the products will both include the new forms this spring. Upgrading software prior to the August 1 effective date of the forms allows agents time to adapt to new processes and become comfortable with the new software features and the forms themselves. As with any new rules or regulations, learning about the changes is imperative. SMS treats industry education as a vital part of our relationship with our users. Our clients count on us to help them navigate through the sea of changes ahead. We’re continually raising awareness and educating customers through monthly newsletters, software blogs, video tutorials, user guides, and release notes. SMS is also offering a series

AUGUST 1, 2015

of live and recorded training webinars for TitleExpress and StreamLine. Customized training is also available for our clients to help them appreciate the new disclosures and their impact on the settlement business. Agents should take advantage of as many sources as they can to gain a full understanding of the TRID. In addition to relying on their software provider, there are many other resources for settlement agents. The CFPB has published a guide to the new forms that walks agents through step by step, section by section, how to complete the Loan Estimate and Closing Disclosure. This guide and other tools are available on their Resources To Help You Comply website. Industry groups are another source of information with forums, classes and presentations on all aspects of the TRID rules. Both ALTA and AEA have information available on their websites and have actively been educating their members. Title agents can also look to their underwriters for guidance on implementing the disclosures. Talking to lenders about their expectations for the new closing process is another great way to prepare for the coming changes. Understanding how they’ll be using their Loan Origination Systems (LOS) with the TRID disclosures is a significant part of implementing the new rules. There are many different LOS used by Lenders, varying from those supported by national vendors to small proprietary systems. With the advent of TRID, these systems may need to implement the ability to prepare the Closing Disclosure. Much of the information lenders need to complete the Closing Disclosure is not currently in their LOS. This means data needs to be exchanged between the LOS and the agent’s closing system.

receive specific loan disclosure data with lenders, so that users can complete the Closing Disclosure in TitleExpress and StreamLine. Real estate agents and brokers may not be thinking the new disclosures will have any effect on them since they aren’t responsible for preparing either the Loan Estimate or Closing Disclosure. What they may not realize is with the new timing rules, the closing process isn’t going to be the same. Contract contingencies will need to be planned around the 10-day time period for the borrower’s intent to proceed and final figures will need to be ready 3 days prior to closing. With the additional time allotted for delivery and receipt of the Closing Disclosure, known as the ‘mailbox rule’, closings may not actually happen until 7 days after the final amounts have been disclosed. This means real estate agents, settlement agents, lenders, buyers and sellers may need to adjust their expectations regarding the closing date. Conversations with all participants in a closing will go a long way towards preventing surprises or disappointments. August is typically the busiest month of the year for closings and with the adoption of the TRID, it’s even more critical that early preparations are made. Questions on SMS’s TitleExpress or StreamLine and the new TRID forms may be sent via email to sales@iwantTSS.com or sms.info@firstam.com.

The new Closing Disclosure in TitleExpress and StreamLine uses a standard format for data which allows computer applications to share data that can be read as text even though the applications use different programming languages and databases. This allows our production systems to send and

Agency Today | Issue 2

INDUSTRY PRACTICES ARE CHANGING IN AUGUST New TRID Closing Disclosure Forms are now available in the latest version of TitleExpress and StreamLine. ÂŠ2015 First American Professional Real Estate Services, Inc. and/or its affiliates. All rights reserved.

Agency Today | Issue 2

StreamLine TitleExpress fully integrates title and settlement

For over a decade, StreamLine has been the closing

processes. Information flows seamlessly through order

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writing, escrow account reconciliation, and management reporting. It is available as both a local installation and a complete Cloud solution.

StreamLine allows for one-time data entry to produce closing and title documentation, manage trust accounting activity, monitor workflow and productivity,

TitleExpress offers four flexible solutions, which allow

and more. Scalable and customizable, StreamLine

you to select only the features that you need:

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•

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Whether you have a single office or multiple offices

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The Enterprise solution includes the features of the Professional solution with additional scanning

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Supports multiple underwriters and rate schedules

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800.767.7832 | firstamsms.com Agency Today | Issue 2

Successful Implementation of a

Clean Desk Policy When it comes to securing Nonpublic Personal Information (NPI), a common topic is email. Today, most of the email being transmitted is unsecure. But what does â&#x20AC;&#x153;unsecure emailâ&#x20AC;? really mean?

By: Scott Fairbanks Product Manager, GreenFolders

A good analogy here is the U.S. Postal System. When you send a letter in the mail, it is not unusual for that letter to be managed by a handful of different individuals. If one of those individuals decided they wanted to see the contents of the letter, what prevents them from doing so? Aside from personal moral obligations and federal law, a person could easily reveal the contents. Standard, unsecure email is similar. When an email it sent out, it bounces from server to server until it reaches its final destination. If that unsecure email is intercepted, it could easily be read and the data compromised. Secure email comes with a variety of options and can be customized depending on your organizational needs. Three of the more common solutions found in the market today are PGP, Secure Portal and TLS.

First American appreciates the literary contributions of independent vendors and the opinions stated herein are solely those of the author.

Agency Today | Issue 2

PGP stands for Pretty Good Privacy and uses a variation of the public key system. At a high level, the sender encrypts a message so it would be meaningless to any unintended recipients. The desired recipient is provided

with a decryption key which can then be used to change the text back into a readable format. More familiar to the general population is the Secure Portal Method. Instead of the email going directly to the recipient, the message (along with any attachments) is sent through a secure tunnel to a portal. A notification is then sent to the recipient prompting them to login to the secure portal with a unique username and password. Once access has been granted, the recipient is then able to retrieve the message. Last but not least, is the TLS method. TLS stands for Transport Layer Security which is a protocol that ensures privacy between communicating parties. In essence, an electronic handshake is made between sender and receiver as to the encryption code that will be used before any messages are sent. If both sender and receiver are set up with the TLS Protocol, this can be a relatively seamless way to communicate securely. Along with sending messages securely, another critical way to protect Nonpublic Personal Information (NPI) is to implement a Clean Desk Policy (CDP). A CDP is a written guide which outlines how an organization should manage their workspace in an effort to improve productivity and reduce the risk of exposing NPI.

â&#x20AC;&#x153;As with most projects, having the right tools in place makes all the difference. GreenFolders, an Electronic Office Management Solution, was created specifically for the title and settlement industry and assists with the successful implementation of a Clean Desk Policy.â&#x20AC;? Aside from safeguarding NPI, implementing a CDP offers additional benefits: Save Time and Money: According to an International Data Corporation (IDC) report, a typical employee spends 2.5 hours per day looking for information. If an employee is paid an annual salary of $60,000, approximately $18,750 can be attributed to loss from the inability to locate information. By implementing a CDP you can significantly increase employee productivity and reduce the hard costs associated with printing. Good First Impression: A clean, tidy office reassures the client that you are in control and consumer information will be properly cared for.

GreenFolders, an Electronic Office Management Solution, was created specifically for the title and settlement industry and assists with the successful implementation of a Clean Desk Policy.

Agency Today | Issue 2

I S T S S S

ALTA

BE PRAC ST TICE S #3 E

E T I N G

THE ELECTRONIC OFFICE MANAGEMENT SOLUTION 56

Agency Today | Issue 2

PROTECT YOUR CUSTOMERS AND YOUR COMPANY GreenFolders is an Electronic Office Management Solution that will minimize the risk of compromising NPI, while at the same time, helping to streamline your operations. Imagine the worry of misplacing or even losing private information â&#x20AC;&#x201D; that can be virtually eliminated by having all of your documents housed in easy to use, electronic folders. With an office management solution such as GreenFolders, you can have the peace of mind knowing your documents are off your desk and in a secure place.

THE REAL COST OF YOUR PAPER FILES WITH PAPER (240 pages + waste)

PAPER

PRINTER & TONER

COPIER & COPIES

STORAGE

TIME

COST PER FILE

WITHOUT PAPER (about 70 pages)

$2.89 $0.70

$6.38 $1.54 $4.35 $0.51

$13.10 $0.00 $10.77 $0.86

CAN YOUR BUSINESS AFFORD NOT TO USE GREENFOLDERS? GreenFolders empowers title and settlement companies, escrow firms and law practices to work without the disturbance of paper files. The system is fully

$37.49 WITH PAPER

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WITHOUT PAPER

customizable to accommodate your unique business processes and is easily scalable to any size organization. Our installation specialists tailor your GreenFolders

500 FILES PER YEAR

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$18,745 WITH PAPER

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processes when necessary. We make it easy to transition into a paperless environment in phases, or all at once.

801.747.2132 gfsales@greenfolders.com greenfolders.com

$16,940 SAVINGS IN PAPER RELATED COSTS

Agency Today | Issue 2

Getting ready is good. Preparing for growth is better. August 1 marks the beginning of a transformed marketplace. Embrace the opportunity presented by the TILA-RESPA Integrated Disclosures (TRID) to move your business forward and prosper. First American Title can help position you for growth today.  First American employees trained on TRID detail, ready to share their expertise  Reference material to educate and guide your agency  Materials you can provide your referral sources to share your knowledge

Enhance your competitive advantage. Contact us today to get started.

Agency Today | Issue 2

125 years of commitment to the title insurance industry Since 1889, First American has served its customers with title and settlement services. Today, we are proud to serve our valued agents by providing: u u u u u

ALTA Best Practices Services and Solutions Title Insurance National Search and Filing Services Local and National Underwriting Support Software and Technology Solutions

First American Title Insurance Company makes no express or implied warranty respecting the information presented and assumes no responsibility for errors or omissions. First American, the eagle logo, First American Title, and firstam.com are registered trademarks or trademarks of First American Financial Corporation and/or its affiliates. AMD: 04/2015