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Cover Story: REBA vs. NREIS . . . . . . . . . . . . . . . . . . . . . . . .6 Is this litigation truly about violating UPL statutes and court decisions or is it the broader issue of deďŹ ning a real estate closing?

REBA Fails to Enforce its UPL Stance in Massachusetts . . . . . . .4 There are no Excuses for a Bad Corporate Web Site . . . . . . . .10 Working with the Trade Press . . . . . . . . . . . . . . . . . . . . . . . .12 A Conversation with Kevin Gugenheim . . . . . . . . . . . . . . . . . .14

About TAVMA Founded in 1998, TAVMA is a non-profit trade association tasked with enhancing public awareness and promoting ethical conduct to settlement services industry vendors and service providers. The Association acts as a forum for the exchange of vital information and presents the positions of its member companies to media, government, user groups and vendors. TAVMA member organizations are committed to promoting excellence and integrity while adding customer and consumer value to the settlement process.

Find this and more at Spring 2009 — TAVMA 3


REBA Fails to Enforce its UPL Stance in Massachusetts By Jeff Schurman n this issue of the TAVMA newsletter, we take an in-depth look at one of TAVMA’s core issues: the Unauthorized Practice of Law (UPL), and the proliferation of statutes and state bar association regulations concerning what constitutes the practice of law in real estate settlements. UPL is an issue that the government affairs committee and board of directors have been working for more than a decade. In fact, one of the reasons that TAVMA was formed back in 1998 was to address this very issue. All this hard work seems to be paying off.


transaction violates the Dormant Provision of the Commerce Clause of the United States Constitution. Judge Tauro has subsequently denied REBA’s motion for reconsideration which is customary. NREIS has filed a Motion for Fees and Costs which has been opposed by REBA. If NREIS is successful in this Motion, REBA would be required to reimburse NREIS for part or all of its fees and costs expended which by the court records reflects the significant sum of $879,300. As of this date, the Judge has not ruled on this claim for reimbursement. TAVMA lauds this Court’s decision since it was unwilling to accept the argument put forward by the Bar Association in the several “attorney states” and it helps to promote the “level playing field” of settlement services. Too often the condemnation of non lawyer in-

Jeff Schurman

e Real Estate Bar Association of Massachusetts (REBA) was dealt a seTAVMA offers its congratulations to rious setback on April 13, 2009 when NREIS on its successful defense in this Federal District Judge Tauro ruled litigation especially when the real issue against them and in favor of TAVMA continues to be the unwarranted atmember National Real Estate Infortempt to protect the business interest of mation Services (NREIS). e professional groups. TAVMA is lawsuit was brought by REBA also very pleased that the Court TAVMA lauds this Court’s decision since determined that the United as part of its “ongoing effort to it was unwilling to accept the argument protect homeowners and put an States Constitution is violated end to non-lawyer conveyancing by such protectionist practices. put forward by the Bar Association in in Massachusetts”. With this Federal Court decithe several “aorney states” and it sion TAVMA is optimistic that helps to promote the “level playing field” In granting NREIS motion the attorney restrictions in other of selement services. for Summary Judgment the states can be reviewed and Court took issue with REBA’s hopefully dissolved. contention that the law in Massachusetts has been well settled volvement in the real estate services inI invite you to read our feature artithat all phases of the real estate trans- dustry is sounded in the name of cle on the UPL matter and share it action are the practice of law. Judge consumer protection as it has been by with your colleagues in the title insurTauro ruled that the law in Massa- REBA. e reality is that neither ance and settlement services industry. chusetts did not support this con- REBA nor any other Bar Association tention and further that the position has been able to establish a connection You’ll find more information about of REBA requiring a Massachusetts’ between non lawyer involvement and TAVMA and our programs on the ❍ lawyer to handle the entire real estate consumer harm or fraud. Web, at 4 TAVMA — Spring 2009

Cover Story

REBA vs. NREIS A lawsuit about the UPL or is a closing the sum of all its parts? By Edward J. Krug, Esq.

The lawsuit alleges that NREIS engaged in the Unauthorized Practice of Law in Massachusetts by performing real estate closings in that state using non lawyers and or hiring lawyers to perform functions which constituted UPL violations.

n February 2007, the Real Estate Bar Association of the Commonwealth of Massachusetts (REBA) filed a lawsuit against National Real Estate Information Services (NREIS), a vendor management company located in Pittsburgh. e lawsuit alleges that NREIS engaged in the Unauthorized Practice of Law (UPL) in Massachusetts by performing real estate closings in that state using non lawyers and or hiring lawyers to perform functions which constituted UPL violations. Is this litigation truly about violating UPL statutes and court decisions or is it the broader issue of defining a real estate closing? is article will review this question by looking at the history of real estate transactions and the role of the attorney, as well as the evolving environment of such transactions in the twenty-first century.


REBA vs. NREIS In February 2007, REBA filed its Amended Complaint (current litigation) in the Suffolk Superior Court in Massachusetts. e case was removed to the United States District Court for Massachusetts on February 6, 2007 upon motion filed by NREIS that federal jurisdiction applies to the matters raised. e complaint alleges that NREIS has violated the standing law in the state by engaging in real estate conveyancing, a task reserved to Massachusetts licensed attorneys. NREIS denied the same and filed a Counterclaim alleging that the allegations of Plaintiff ’s complaint and interpretation of state law if enforced constitute a violation of the Dormant Commerce Clause of the United States Constitution. e complaint alleges a violation of state law and the counterclaim 6 TAVMA — Spring 2009

alleges that such law if upheld violates the Interstate Commerce provisions of the U.S. Constitution such that no state shall erect barriers to interstate commerce. In a recent Brief filed by NREIS, the issue of a “unitary theory”has been raised. According to NREIS, the position of REBA is that it asserts that all of the functions of the real estate transaction are a part of conveyancing and therefore a single unitary act. It is this “unitary theory” that NREIS argues will bar interstate commerce since absolutely no function of “conveyancing” can be performed by anyone other than a Massachusetts attorney. It is under this

argument that NREIS asserts that the dormant Commerce Clause is violated by Massachusetts law if the same is upheld. REBA has argued in its rebuttal Brief that the “unitary theory” is a “straw man” argument and has no basis in prior court opinions. REBA points out that the phrase “unitary theory” is a creation of NREIS and the use of this concept is in clear avoidance of the equally clear directives by the courts that conveyancing in all functions constitutes the practice of law. REBA rebuts the unitary theory and states that there is much precedence in Massachusetts court decisions that prohibits the management of legal functions

by non lawyers such as the role of vendor managers. Finally, it further argues that no violation of the dormant Commerce Clause has occurred under REBA’s view in that no burden has been created on interstate commerce as a result of prior court decisions. ough the case has proceeded through discovery, part of which established that NREIS had performed 7000 transactions in the state, there are currently Motions for Summary Judgment and Cross Motions for the same filed by each party. In a fairly recent development, the Massachusetts Bar Association (MBA) has filed a Motion to present an Amicus Curiae Brief in support of REBA’s Cross Motion for Summary Judgment.e Motion states that it is filing the same to provide the “Public’s View”of the nature of the lawsuit and the danger of NREIS’practices upon the public of Massachusetts. It does appear to be a curious basis for filing the Motion in light of the fact that the MBA purports to represent a perspective, the public’s interest, not being represented by REBA. If the Motions for Summary Judgment are not granted, the case will proceed to trial in the next several months. Regardless of whether this case is decided by motion or at trial, the consequences of the decision will be historic and may redefine a real estate “closing” or conveyance and what part of the same if any constitutes the “practice of law.” The early real estate closing industry In order to evaluate the significance of this case and the ultimate impact of the court decision, it is helpful to review the current state of the real estate closing industry, as well as its history. From the birth of this nation, real estate conveyancing has been rooted in the traditions and guidance of English Common Law. Almost all states adopted constitutions based upon the principles of English Common Law with Louisiana being the notable exception with its

Napoleonic Code. ese state constitu- industry, the majority of home purchases tions in many cases defined the practice were financed through transactions hanof law and the requirements to be a dled by attorneys. Even when this author member of the Bar of such state. ey commenced the practice of law in the early would further define certain actions as 1970’s the absolute majority of real estate being within the definition of the Prac- transactions were handled by attorneys tice of Law. In some states, terms such as and especially those who enjoyed some form of exclusive rela“performing abstracts tionship with the of title” and “conThe consequences local bank or building veyancing” were used and loan. In the late to describe some of of the decision will 70’s and the boom pethese activities. From be historic and riod of the next three the late 18th century may redefine a decades the residenand for over 100 real estate “closing” tial real estate indusyears beyond, courts or conveyance. try changed radically would enforce certain with the emergence activities as reserved of the secondary marto only those trained in the law, namely attorneys. Eventually, ket with such participants as FNMA and based upon these centuries-old concepts, FHLMC. It also signaled a significant the “unauthorized practice of law” be- rise in title insurance agents many of came the subject of many state statutes which became independent non-attorney title insurance agents many of which beand court decisions. For over 150 years, the handling of a came multi-state licensed agents such as real estate transaction was performed by a vendor management companies (“VMCs”). licensed attorney in that particular state. The emergence of the Titles were searched in the counties or “One Stop” providers of towns where the appropriate public proptitle and closing services erty records were maintained typically by the attorneys themselves or by “abstractors” ough some of these “one stop”shops who performed the searches for the attor- can trace their origins to the late 60’s and ney. A local bank would make the mort- early 70’s when services were provided to gage loan and the local attorney would attorneys and finance companies, the macomplete the transaction by drafting the jority developed in the early 80’s. No legal documents, examining the title and longer were the several functions perproviding an opinion of the same and han- formed in real estate conveyancing handling the settlement which was the execu- dled by one individual but now the various tion of the documents and disbursement functions were segmented and completed of the proceeds. In certain areas of the in an assembly line process. Vendors were country, scriveners and abstractors, both hired as independent contractors to non lawyers, would be utilized in some of perform appraisals, title searches, tax these functions. According to Ladner on certifications and the actual settlement. Conveyancing in Pennsylvania, this be- Additional former back office lender funccame the common practice in Philadelphia tions such as flood reports were added to circa 1870. It might be noted that the title the process. e VMCs would “manage” insurance industry was born at this time these various functions while, as a title inand also in this locality. surance agent, retaining the ultimate rerough much of the 20th century this sponsibility for examining the abstract and remained the common activity of local at- issuing the title commitments and policies. torneys. After World War II and the dra- Many VMCs operate in several states and matic growth of the residential real estate continued on page 8 Spring 2009 — TAVMA 7

Cover Story

continued from page 7

therefore offer their services to multi-state lenders as a one stop solution geared towards speed and uniformity in processes and pricing. Mortgage lending moved from the local banks and building and loans to large national mortgage companies who operated in all 50 states utilizing centralized processing. e major shift in lending practices needed a partner who also operated on the same principles of a centralized platform and hence the VMCs filled that role. Vendor management companies would operate a single platform of segmented services and uniformly provide services in the same fashion from state to state, except for the so called “attorney states” where the role and function of a state licensed attorney required “variations on a theme”.

pendent non attorneys, the definition of the practice of law in several states forced a closer attorney management or supervision of this task. In North Carolina, an attorney must examine the title search and The inevitable collision supervise the title opinion. In South Carbetween attorneys and vendor olina, the role of the attorney in supervismanagement companies ing not only the search but also the As the residential mortgage industry opinion of title is much more compregrew and consolidated from the mid 80’s hensive. In these states vendor manageon, vendor management companies grew ment companies would have to make proportionately to meet the demands of changes in their processes to accommothe new central processing theme. In an date these requirements. An attorney attempt to provide uniform services on a would have to be hired to perform some multi-state platform VMCs encountered of the functions performed internally in resistance in several attorney states most vendor management. Some companies notably in the southeast and northeast. failed to comply with attorney state ree essence of vendor management is strictions which led to UPL complaints to break the real estate closing process being lodged against them, followed by into several “pieces” and to outsource “cease and desist” orders. those pieces to vendors whose services VMCs, which stressed the one stop would then be managed. ese “pieces” aspect of their business with an emphasis would include appraisals, tile searches, tax on turn times and pricing, have struggled searches, title clearance and actual settle- to adapt to these attorney state restricments or closings. In the process of a tions. As the incidents of violations grew, mortgage refinance transaction this seg- and complaints about the competition mentation could create a very efficient rose from the real estate attorneys, the work flow. e purchase could also adapt state bar associations became more agto this type of segmentation but the gressive in their efforts to confront the number of additional parties involved, as vendor management practices. In North well as the control of the transaction, led Carolina, the outside company would be to a more cumbersome process. charged with the unauthorized practice of Although the title search or abstract is law. In South Carolina, the individual performed almost exclusively by inde- members of the bar who participated with 8 TAVMA — Spring 2009

VMCs would face disciplinary action thereby making it more difficult to recruit attorneys for any of the outsource functions. Currently a handful of states have attorney restrictions on the real estate transaction forcing VMCs to modify their involvement and in some cases cease doing business in that particular state. Is this conflict about the law or economic competition? e argument rages in each state where the UPL issues exist in real estate transactions. e Bar Associations say that the issue is quite simple - the advice and counsel required in a real estate transaction demand that a licensed attorney in that state provide the same. e VMC responds that it is really an issue of the Bar protecting its turf and blocking competition. In those states where attorney involvement is mandated, are the laws of that state involving real estate ownership or financing of such a nature that an attorney must be consulted? It is doubtful that any of these states have statutes, customs, or practices that truly demand that an attorney be involved as counsel in order to interpret the law or protect the consumer, as is often argued. Due to the standardization of documentation used in the secondary market, it is highly doubtful that an attorney’s involvement would protect the consumer’s interest. is is not to suggest that the real estate client would never need to consult with an attorney, since in fact many transactions contain complexities that attorney involvement is quite prudent. With about 85% of the nation’s states not requiring an attorney’s involvement and with mortgage financing having become standardized, it is hard to imagine that the continuing state mandate for an attorney’s involvement is not some form of protectionism. at having been said, however, many states do continue to enforce age old requirements for attorney involvement and it is clearly the law in those estates, whether egregious or not to vendor management.

What is a closing…….Does the answer to that shed light on the controversy? In 2002 at a hearing before a special committee of the North Carolina Bar Association held in Raleigh, it became rather apparent that the North Carolina attorney and the vendor management companies saw the term “closing” much differently. At that hearing members of TAVMA testified in favor of permitting lay or non attorney closers in North Carolina. Naturally members of the Real Property section of the state bar vigorously opposed the non-attorney proposal. During that testimony at which this author participated, it became readily apparent that vendor management’s use of the term “closing”differed significantly from that of the members of the Real Property Bar. Rather than a segmented event at which all of the parties to the transaction executed documentation, the members of the bar viewed the “closing” as a comprehensive set of tasks. ey testified that a closing is the entire process from the initiation of the title search order right on through the execution of the documents. ey

stated that if a client requested that they perform a closing for a particular real estate transaction that necessarily meant that they would order the title search, examine the same, perform all title clearance activities, prepare all documentation and finally hold the settlement. Accordingly they believed that permitting non attorney closings meant that the entire process would or could be handled by a non attorney. ere are those in the vendor management industry that argue that such an interpretation is merely a convenient way of restricting all non attorney involvement. Does REBA believe that the closing is indeed the sum of all its parts? It may be a total over simplification to state that the litigation between REBA and NREIS is really about “wha is a closing?”. If one reads the authority for REBA’s position echoed in the Colonial Decision or the Opinion of the Justices however, it appears that the courts never envisioned that a real estate transaction could be segmented into so many parts and yet be performed correctly without

jeopardizing the lender or borrower’s interest. eir references to the transaction are comprehensive and generally surround the issuance of a legal opinion as to the status of the title. In the 21st century, vendor management has broken the real estate transaction into many pieces in a way never contemplated by the Constitutions, Statutes or court decisions of these many states. Vendor management has created an assembly line process utilizing outsource vendors to provide services. By so doing, they have standardized a series of tasks that were once held sacred by the members of the Bar. As the financing of real state transactions exploded in volume in the last 30 years, vendor management responded to the demand from state to state in a uniform manner. Most states do not require the use of attorneys to close loans, and there has been a distinct lack of allegations indicating adverse impacts upon consumers, based upon the non-attorney closings in those states. ❍ Edward J. Krug, Esq. is with Commercial Loan Services, LLC, Moon Township, PA

Court Case Update ust before this issue went to press, the Court handed down a judgment in favor of NREIS.e Court rejected REBA’s theory of the practice of law, calling it a “novel construction of the practice of law as encompassing all the interconnected steps of a real estate conveyance.” e Court also rejected REBA’s unsupported and “conclusory allegation”that the attorneys engaged to attend residential real estate closings are “mere notaries,” and explicitly held that the issuance of title insurance, as an agent of an insurance underwriter, does not constitute the practice of law in Massachusetts. e Court also found that REBA’s theory of conveyancing as the practice of law violated the Dormant Commerce Clause of the U.S. Constitution and was therefore unconstitutional. In addition, the Court found that REBA’s “overbroad definition” of the practice of law would likely drive up expenses for consumers engaging in residential real estate transactions and “‘deprive[ ] the citizens of


[Massachusetts] of any benefits arising from competition.’” Accordingly, the Court held that: NREIS is entitled to a declaratory judgment that REBA’s interpretation of the practice of law as encompassing all the interconnected steps of a real estate conveyance violates the Dormant Commerce Clause. Because NREIS has satisfied the requirements for a permanent injunction, NREIS is also entitled to an order enjoining REBA from enforcing its construction of the practice of law. NREIS has prevailed on the merits. NREIS would suffer severe economic hardships if REBA were able to enforce its interpretation of the practice of law so as to preclude NREIS from performing real estate conveyancing and title insurance services in Massachusetts. NREIS’s economic hardships would outweigh any harm that REBA would suffer in being precluded from enforcing its overbroad interpretation of the practice of law. And the public interest would be best served by preserving competition in the markets for real estate conveyancing and title insurance services. Spring 2009 — TAVMA 9


There are no Excuses for a Bad Corporate Web Site A good URL doesn’t always have to blink, flash or hum. It just has to say something. By Brian Rieger hen talking about marketing communications, some tend to focus on the direct options, like mailers or e-mails. Others focus on public relations and social media (LinkedIn, Twitter, Facebook). When it comes to new business, however, there’s no easier—or more fundamental—way to dot your corporate “I’s and cross your corporate “T”s than having an effective corporate Web site. If your URL is not your prospect’s first impression of your business, it probably is the first place he or she will go to kick the tires after you’ve delivered your pitch. You wouldn’t walk the exhibit floor at a conference wearing sweatpants and sandals. You wouldn’t refer a prospect to your most disgruntled former customer. So why would you send that prospect to a Web site that isn’t professional? No time to do it right? Too expensive? Can’t get around to it? Too much “real” business to attend to? Below are a few of the common myths preventing too many good companies from having good Web sites. As you’ll see, there’s really no excuse for failing to upgrade the face of your business on the Internet.


Web design costs too much and takes way too much time. is is often true if you expect a stateof-the-art, e-commerce engine in two weeks time. e best sites can run above 10 TAVMA — Spring 2009

and beyond $20,000 when you include nothing but the latest design and the fanciest tricks and have a national design agency doing the work. But does your business really need all of that to maintain a professional and effective appearance? What do you want your prospects and customers to get from your Web site? Do you want them to place orders there? Do you want them to learn about your products and people there? All of the above? It may seem simple, but this

may be the most challenging element of the project. What will the function of your Web site be? Now, it’s time to pull together the design… the “look and feel.”ere are many affordable agencies or even free-lance designers who can put together a solid site at a fraction of the cost you expect.Be aware, however,that virtually every freelancer believes he or she can design a Web site. Many of them,in reality,can’t. Be sure you vet them carefully. Look at past work. Ask how much input the client or other vendors had in the design. Have your potential designer explain the look and functionality of previous work, and how it tied into the client’s goals. You may even want to hire a reputable Web design or marketing expert to help you review your

potential designers. By the way, if you are not having your own development team build the “back end” of the site (the programming that makes the design a reality on your URL), make sure your designer can. If you are leaving the back-end to your team, be sure you have a key team member corresponding with the designer from the start. You really don’t want a design or function that can’t be brought to life on your URL for technical reasons. Once you have your plan and your designer, it is time to populate your site with award-winning copy. Although it sounds easy enough, do not fall into the trap of doing it yourself, unless you’ve written Web copy before…and done it well. Why? Even experienced copy writers can struggle with Web copy. For whatever reason, the human eye and brain get lazier when they come across Web text. at means you need the most concise, powerful verbiage possible. Bad copy can drive away good prospects. Once a person views a bad, boring or confusing Web site, he or she is very unlikely to go back there again. Ever. If your designer claims he or she has people or can even write it himself/herself, go through another vetting process. Good layout and imagery will fade quickly if your language says nothing or means nothing to your viewers. Remember, a bad first impression will be your last. Now, and only now, are you ready for a timeline. Your designer and copywriter should be able to help you with this. Hold

their feet to the fire, but be realistic. Just as you won’t (generally) be able to turn a full title search in 2 hours, a complex Web site will not be “live” in two weeks. Nobody in this industry really checks out Web sites. It’s all about relationships and the quality of my sales people. Maybe. Maybe not. But the industry is changing quickly and dramatically. ere is still likely a wave of change coming. Your customers today may or may not be your customers tomorrow. A Web site can help future customers find you, even before your sales team is out there looking for them. And you would be surprised how many of your existing customers need to check your Web site occasionally for information. A bad or useless site can improve, or harm, your relationship even with existing customers. ere is no doubt that relationships and direct sales strategies will always have a critical place in the mortgage industry. But just as you wouldn’t send a sloppy sales person out to meet a new prospect, you really don’t want to have a sloppy Web site waiting to greet that prospect either. So, what makes for a sloppy Web site? Boilerplate copy: Make sure your text says something that means something. It should be clear, concise and say something your competitors’ sites don’t. Stay away from the clichés. ey make your copy seem less credible. Don’t just talk about your customer service. Describe what makes it different! Bland or cliché stock images: e models in business suits shaking hands over a laptop really don’t say anything about your business other than that you haven’t taken the time to think through your Web design. If you can’t find photo-

graphs that differentiate your company, use icons or abstract images. Nothing says “me too”like overused stock photography. Typos, bad grammar, poor copy or bad functionality: Links should work. Emails should go somewhere. And someone—in fact, many people—should proof your site. You wouldn’t reply to an RFP in broken or casual language. You don’t (hopefully) send sales letters that aren’t well-written. Your Web site represents you to people you may not even know yet. Make sure you’re well-represented. I can’t afford to have flashy imagery and wouldn’t even know where to begin with videos, podcasts, etc. en don’t. ere are plenty of professional and effective corporate Web sites in the industry that don’t blink,flash or make noise; don’t show first-run videos and don’t require Adobe Flash Player Version 14.0. e flashy

stuff can be nice, but stay within yourself and your budget. You’re seeking new sales or better brand awareness, not a creative award. With that in mind: Don’t have a blog or corporate news release section unless you plan to keep these updated—frequently—with content that will be of value to the viewer (not to your marketing VP, but your viewer). Outdated news or blog sections are worse than having none at all, and make your

company look out-of-date or, worse, so overwhelmed and understaffed that it has no time to maintain its Web site. Don’t go for incredibly flashy applications unless you are sure the majority of your viewers will be able to view them. If you do use something cutting edge, make sure it doesn’t take the viewer’s attention away from the key message. Give them the option of skipping the 45-second intro. Let them turn off the theme song to Miami Vice that plays in the background. A short, well-produced video can support your message effectively. A short, wellproduced video that says nothing is a waste of time. In other words, don’t use the tech tricks just to have them. Don’t make your site any bigger than it needs to be. If you’re only looking to provide the corporate basics, your viewer shouldn’t have to click ten times to get to the information necessary. Keep the copy lean, the functionality simple and the look professional. ere are a number of small businesses in the mortgage industry using their Web sites effectively without funding fancy agencies to do so. Like any piece of marketing material, keep it professional,keep it tied to your marketing goals and brand, and keep it lean. With competition getting tighter, you can’t afford not to. About the author Brian Rieger is the principal of True Impact Communications (, a full-service marketing and public relations agency serving the mortgage and settlement services industry. He has served as a trusted advisor to large and small firms in the industry for seven years. Brian was also the Vice President of Seminars and Studies at publisher October Research Corporation for five years. You can contact Brian at (330) 348-1678, or at brian@trueimpact ❍ Spring 2009 — TAVMA 11

New Media

Working with the Trade Press By Rick Grant or any company that sells its products or services primarily to other businesses, working with the trade press is vital to long term success. While many executives are uncomfortable reaching out to reporters and editors, a good understanding of their work is essential, whether media relations is delegated to an internal team or outsourced to an outside service provider. Spending more than a decade as a trade press reporter and editor, I can tell you how these companies generally operate, what their typical needs are and best practices for getting more coverage for your company.


Differences between the trades and the mainstream press Over the years, I have encountered many executives who hold a low opinion of the trade press and the media in general, discounting its benefit to their organization. Top 10 US banks are particularly wary of the press and prefer to be quoted directly from their SEC filings, if at all. But for the majority of businesses that earn revenue from serving the larger firms within an industry, the trade press is perhaps the most effective way of coming to the attention of qualified prospects. Companies that want to succeed today are largely of the opinion that “any press is good press.”ey are right! While that can be a dangerous attitude when dealing with the mainstream media, in the trade press, where publishers live by selling advertising and other services back to their readers, it’s not really as risky. In fact, in my experience, companies intent on rising to the top of their industries must foster strong relationships with reporters and editors in the trade press.ose that don’t will be at a competitive disadvantage. I don’t mean to suggest that the trade 12 TAVMA — Spring 2009

press will never publish a negative story about a company. It certainly happens. Web-based publications, in general, tend to be more dangerous here because they have lower overhead and can afford to take risks with their readership and advertising base. But if a company has a good story to tell, the trades will be far more likely to consider it at face value than the mainstream media will. In addition, since the trade press exists specifically to serve the needs of the industry, they will be much more likely to cover news from a firm competing in their space than the mainstream press. During good times, when ad sales are up it can be very easy to get good stories published about a company. When times are lean, it becomes more difficult, but even then publishers are looking for new ways to generate revenue, and that can open up new avenues of promotion for companies that have a relationship with the publication’s personnel. And that’s really the key to making a good trade press PR effort work, having good relationships with the people who work in these companies. e keys to building these good relationships are first knowing how the trades work and second building a machine that makes it easy for you to stay in touch with these important target publications. The people who make the trade press work One of the first lessons that a freelance writer learns about his business is that publication editors are very busy people and they get very annoyed when they are disturbed for something that cannot benefit them in their work. I always thought that was a crude generalization, but after working in the trades for many years and

eventually becoming one of those editors, I realized that the myth was grounded in solid reality. Building a good relationship with these folk requires an understanding of who these people are and the job they are trying to do. Many professional journalists are of the opinion that working in the trades is only one step above writing for the local paper. at’s not fair, of course. Some local papers are really great. And so are the best trades. Like community newspapers, the trades cater to a well-defined audience of readers who all share a common set of characteristics and have many of the same information needs. Instead of geography, trade publication readers share

a common industry. Reporters and editors that cover the trades for the most part are dedicated professionals that have spent many years understanding how an industry works and who the key people are that keep it working. Generally, they don’t know this from actual work experience within that industry. ey get this information from experience attending industry events, working with public relations firms and from conversations with executives working in the business.e best reporters I have worked

with were on the phone with someone from their industry most of each day. Writers that work for big, glossy consumer publications can pretty much write anything that strikes their fancy and only a fraction of their audience will ever question their conclusions. We were all shocked to learn that a reporter for the New York Times, the country’s self-proclaimed journal of record, was just making things up for that paper. at doesn’t happen in the trade press because too many people know what’s going on in their industry. It’s their business to know. is means that reporters and editors have to work harder in the trades to earn their reputations.Lying to a trade reporter to get your story published will work exactly once.ese professionals simply can’t afford to make mistakes that will jeopardize their status. Errors occur, certainly, and corrections or retractions are printed. But

when the mistake comes from bad information from a source, that company is no longer considered a source and the coverage they enjoy comes to an end. Making matters more difficult for these reporters is that they rarely start off in the industry they eventually specialize in. e risk is that a reporter will bring too many lessons learned from a previous industry to his reporting, making mistakes because things are not done the same way in the new industry. Reporters are forced to start with a clean slate and learn everything again if they hope to report the news accurately and intelligently for their new readership. Reporter’s primary goal: learn the industry Working among other reporters is a great way to learn and many great lessons are shared that way, but ultimately every

reporter has to reach out to industry experts to get the lay of the land. When I started writing about mortgage technology, my goal to was to talk on the phone with two industry experts every day. Many days I exceeded that goal.e vast majority of what I learned never made it onto the page for any of the publications I worked for, at least not right away. But over time, I learned my industry from the people working there who were willing to visit with me. ose people became my primary sources and many remain my friends to this day. So how do you work effectively with the trade press? Drop your friendly neighborhood trade industry reporter a line and tell them the truth, about your company, your offerings and the industry from your perspective. ey’ll appreciate it and you’ll be on your way to building a great relationship. ❍

Spring 2009 — TAVMA 13

Q & A

A Conversation with Kevin Gugenheim About Kevin Gugenheim


How did you get into this business?

A: I started out in wholesale lending with North American Mortgage in 1985, and over the next 15 years had management positions in retail lending, secondary marketing & servicing. I got into the title side of the business when I joined Stewart Title as President of their Lender Services group in January, 2000.


When did you come over to ServiceLink?

A: I came over in October of 2007.


It sounds like you’ve had quite a career in the industry.

Kevin Gugenheim, Executive Vice President and Chief Strategic Officer Mr. Gugenheim is responsible for the management of ServiceLink’s Business Development, Marketing, Product Development, Legal, & Human Resources teams. Prior to joining ServiceLink, Mr. Gugenheim spent seven years with Stewart Title Company, most recently as President and Chief Operating Officer of Stewart Lender Services, Inc. He began his career in 1985 in mortgage lending and has a deep knowledge of retail and wholesale origination, as well as secondary marketing and servicing operations. 14 TAVMA — Spring 2009

A: I’ve been lucky enough to be given many different opportunities on the lending side of the house. When I jumped over to the title and settlement side, it helped that I knew the lenders’ side of the business. I think that this lender perspective really helps our company better partner with our customers.


What do you think is the best part of your job now?

A: I work with many different departments at ServiceLink and a very broad base of customers and business lines. Most of the areas that I am involved with in our company are focused on both short & long-term growth. I think that’s number one. Number two would be the good friends and people that I’ve met in this business. It’s a competitive business but I have found everyone to be very friendly and willing to help each other in any way possible and I have many very good personal friends in our industry.


Most of our readers know about ServiceLink, but can you could give us an overview of the company. A: ServiceLink is a leading provider of origination and default services and is the national mortgage services platform for the Fidelity National Financial family of companies. ServiceLink was acquired by FNF in August, 2005 and we

subsequently acquired ATM Corporation in August, 2007. We offer a complete suite of title, settlement, appraisal, default and asset management related products and services. Our technology group really makes us unique among most vender management companies. We have built a large number of joint venture settlement service companies over the years that are all operating on our proprietary, industry leading technology, Vision. We have operation centers in Pittsburgh, Denver, California, Texas and Kansas City.

A: TAVMA has always done a pretty good job of having conferences and good panels that share best practices for those vendor management companies and other TAVMA members that have found a way to survive and/or thrive in these tough times. All of our members are more than willing to help each other, which I believe is fundamental to any good trade association. On the valuation side, one of the biggest challenges—and we’re all seeing this, particularly in light of the HVCC—is that we’re under attack for what we do and how we do it.ere is a perception that the work we do as appraisal management comI know that a lot of folks around panies doesn’t contribute any value. We all know that our work the industry are still suffering through brings value.e perception is that we’re just using unqualified the downturn. From your perspective, what is appraisers and we exist to mark up fees. I think we have to work the most important obstacle that the to bring some public awareness to the value that we bring in. industry must overcome in order to get We handle the additional steps required for effective quality everyone back on track? control and ensure efficiency through the investments we’ve all made in the vendor management and appraisal management A: A few things…. First, claims that were caused by certain businesses. Our technology has given us the ability to automate title companies and agents cutting corners and doing work for the quality control process and that allows our lender partners their customers who were demanding “faster, cheaper, quicker” to remove costs from their own operations. Again, that’s thanks back in the prior refinance boom. ere were a lot of incom- to the investments that we’ve made to ensure quality work, both plete title searches and, as a result, the title industry now has a in our professional staff and in our technology platforms. at huge number of claims that is pressuring earnings. is has re- has brought huge value to the industry. cently changed, however, as there is now a much greater focus on the quality of the deal by all participants in the lending cycle What else should our readers be thinkand I expect we will see this claims problem correct itself in the ing about now? coming months and years. Additionally, customer and business diversification is critA: ere’s a continued dominance of the market by the ical – we have seen industry consolidation like never before and too much concentration among too few customers or too larger lenders, who are driving the policies and procedures that often dictate how their vendors work. We’ve seen that few business lines can be a challenge. Lastly, partnering with the right underwriter is very im- now with HVCC, where local lenders are now less able to portant. Several of the larger underwriters have significant direct how they want to do appraisal work. We’re also seeing with the refinance cycle that the larger banks investments in technology, title plants and are really the ones that are driving much of support services that can help both their direct operations and agents realize a signifithe refinance volume. Consequently, it’s imThere is now a cant reduction in cost of goods as well as portant for companies to think about demomuch greater enhance their productivity costs. From the graphics and continue to squeeze costs out of focus on the ServiceLink perspective, we operate as a ditheir systems. quality of the deal. vision of the underwriters within the FNF My advice is that vendor managers keep a family and we are blessed to be based in broad diversity of customers. ere are a huge Pittsburgh, where we have a very experienced number of local and regional lenders that are and affordable workforce. Both of these factors allow us to important business partners, but companies should also operate very efficiently. establish relationships with the top 20 lenders and servicers. ese larger companies are driving a lot business and need strong vendor partners to help them achieve their lending Is there anything TAVMA members and servicing objectives. I also think a diversification into can do to help ensure that they serving the default title, closing and valuation space is a survive the downturn, but also help natural opportunity for many of our members who are only their customers? ❍ working on the origination side.




Spring 2009 — TAVMA 15

TAVMA Newsletter Summer 2009  

The quarterly newsletter of the Title/Appraisal Vendor Management Association

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