Attorneys’ Title Guaranty Fund, Inc.

33 NORTH DEARBORN ƒ SECOND FLOOR ƒ CHICAGO, 60602-3100 ƒ FACSIMILE 312.372.1501 ƒ TELEPHONE 312.372.8361

Special Bulletin – September 2002 Shareholder’s Update

Peter J. Birnbaum – President ATG members who have political contacts are encouraged to HUD’s Proposal to “Reform” Closing Process use them now. Any assistance you could give by contacting This matter merits your immediate attention: members of Congress would be particularly helpful. Congress has the ability to exert considerable pressure on In July, the U.S. Department of Housing and Urban HUD to modify or rescind regulations. ATG enjoys good Development (HUD) released proposed modifications to the relations with many members of Congress; however, regulations implementing the Real Estate Settlement politicians serve their constituents. A letter from you to your Procedures Act (RESPA). The proposed regulations, if Congressman can make a difference. The Illinois Delegation implemented, would have a devastating impact on real to Congress is listed on page two. Here is a sample of what a property practitioners. The proposed regulations would letter from you might look like: allow lenders to “bundle” all settlement services as a part of a comprehensive closing package. In its simplest terms, the Dear Congressman Smith: regulations would give lenders tremendous power in dictating the title services provider. More importantly, the I am deeply concerned about the proposed revisions to the RESPA proposed regulations would not only allow lenders to steer regulations recently released by the U.S. Department of Housing and Urban Development. consumers to captive title companies, they would allow lenders to receive kickbacks from non-affiliated companies. The proposed regulations represent special interest legislation In short, if lenders control title services, ATG and its designed to give money center banks a monopoly on the selection of settlement services required to close residential mortgage loans. members will feel the impact. The proposed regulations would allow lenders to sell all The comment period for the proposed regulations expires settlement services including title insurance to the consumer as a October 28, 2002. We are submitting a comment on behalf of part of a “package” or “bundle.” Under the proposed ATG members and are recruiting other associations, such as regulations, the lender can dictate the service provider, own the the ABA, the ISBA, the Illinois Real Estate Lawyers service provider, or receive kickbacks from the service provider. Association, and the National Association of Bar Related If these regulations are implemented, consumers will be denied the Title Insurers (NABRTI), to do the same. right to the select products and services they need to complete the largest financial transaction of their lives: The purchase of their ATG has been extremely active in opposing the proposed home. regulatory scheme. Through NABRTI, we have engaged two prominent lobbyists: Tom Ewing, former Congressman When Congress enacted RESPA in 1974, it sought to eliminate corruption in the real estate industry and to give consumers the (Illinois); and Bill McCollum, former Chairman of the opportunity to shop for the best products and services. House Banking Committee (Florida). We have separately engaged John Wyma, ’s former Chief of Should the new regulations be adopted, the entire real estate industry will be dominated by a handful of mega banks who will Staff, to specifically represent ATG in these matters. be accountable to no one for their activities. During 2002, I have personally been to Washington several The Savings and Loans were deregulated in the 1980’s and they times to meet with senior HUD officials as well as members collapsed soon after at the taxpayers’ expense. In the instant case, of Congress. HUD seems particularly entrenched in its HUD is proposing to end the homebuyer’s right to choose, permit position. Unfortunately, President Bush is supportive of kickbacks that were made illegal in 1974, and generally provide a HUD’s position. Congress seems willing to listen to our cost-raising windfall for lenders, all at the expense of your constituents. concerns, however. We will travel to Washington several times before the end of the comment period to lobby Very truly yours, members of Congress. We believe we have a good message to deliver. ATG Member The proposed HUD Regulations may ultimately exempt title great deal to work with if the regulations are implemented. insurance from the package because of opposition. However, However, this is a battle we would dearly like to avoid. obtaining that exemption requires effective lobbying as In addition to writing your Congressman, you can help our obtaining control over title insurance is the main motivation efforts in opposing these revised regulations by making a behind the lenders’ support of this proposal. Some contribution to our Political Action Committee. These persuasive arguments have been made that the HUD monies are well spent in supporting Congressional proposal exceeds its rule-making authority. Secretary candidates who are supportive of our position. Please send a Martinez has indicated he would seek legislative changes to check payable to ATG PAC today: RESPA, if necessary, to achieve the reform. We like our chances of success if Congress has control of this issue. ATG PAC ƒ 33 North Dearborn ƒ Chicago, IL ƒ 60602-3100 It is important to note that the proposed regulations, if We will fight hard to protect your interests in the coming passed, would exempt the Owner Policy from the regulation. months. With your support we believe we have a strong Because Illinois is a seller-pay state that would give us a possibility of success.

ILLINOIS DELEGATION TO CONGRESS September 2002

US SENATE ADDRESS PHONE FAX www.senate.gov All Washington, DC | Zip Codes as Provided

Peter G. Fitzgerald 355 Dirksen Senate Office Bldg. | 20510 (202) 224-2854 (202) 228-1372 Richard J. Durbin 332 Dirksen Senate Office Bldg. | 20510 (202) 224-2152 (202) 228-0400

U.S. HOUSE OF REPRESENTATIVES www.house.gov ADDRESS PHONE FAX All Washington, DC | Zip Codes as Provided District Name

1 Bobby L. Rush 2416 Rayburn HOB | 20515-1301 (202) 225-4372 (202) 226-0333 2 Jesse Jackson, Jr. 313 Cannon HOB | 20515-1302 (202) 225-0773 (202) 225-0899 3 William O. Lipinski 2470 Rayburn HOB | 20515-1303 (202) 225-5701 (202) 225-1012 4 Luis V. Gutierrez 2452 Rayburn HOB | 20515-1304 (202) 225-8203 (202) 225-7810 5 Rod R. Blagojevich 331 Cannon HOB | 20515-1305 (202) 225-4061 (202) 225-5603 6 Henry J. Hyde 2110 Rayburn RHOB | 20515-1306 (202) 225-4561 (202) 225-1166 7 Danny K. Davis 1222 Longworth HOB | 20515-1307 (202) 225-5006 (202) 225-5641 8 Philip M. Crane 233 Cannon HOB | 20515-1308 (202) 225-3711 (202) 225-7830 9 515 Cannon HOB | 20515-1309 (202) 225-2111 (202) 226-6890 10 Mark S. Kirk 1531 Longworth HOB | 20515-1310 (202) 225-4835 N/A

11 Jerry Weller 1210 Longworth HOB | 20515-1311 (202) 225-3635 N/A 12 Jerry F. Costello 2454 Rayburn HOB | 20515-1312 (202) 225-5661 (202) 225-0285 13 Judith Borg Biggert 1213 Longworth HOB | 20515-1313 (202) 225-3515 (202) 225-9430 14 J. 2369 Rayburn RHOB | 20515-1314 (202) 225-2976 (202) 225-0697 15 Timothy V. Johnson 1541 Longworth HOB | 20515-1315 (202) 225-2371 (202) 226-0791 16 Donald A. Manzullo 409 Cannon HOB | 20515-1316 (202) 225-5676 (202) 225-5284 17 Lane A. Evans 2211 Rayburn HOB | 20515-1317 (202) 225-5905 (202) 225-5396 18 Ray LaHood 1424 Longworth HOB | 20515-1318 (202) 225-6201 (202) 225-9249 19 David D. Phelps 1523 Longworth HOB | 20515-1319 (202) 225-5201 (202) 225-1541 20 John M. Shimkus 513 Cannon HOB | 20515-1320 (202) 225-5271 (202) 225-5880

Attorneys’ Title Guaranty Fund, Inc., Shareholder’s Update – September 2002 Page 2 of 2