The Hunt for Dark Money

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The Hunt for Dark Money February 2016 Official Publication of the American Land Title Association The Hunt for Dark Money FinCEN Leans On Title Industry to Help Snuff Out Money-laundering Schemes and Collect Information About Suspicious All-cash Deals We live it every day. If you want to know how to grow in a chang- ing market and thrive during any part of the real estate cycle, let our agent-focused team help you navigate for growth. to grow in a changing market and thrive during any part of the real estate cycle, let our agent-focused team help you navigate TitleNews • Volume 95, Number 2 10 COVER STORY The Hunt for Dark Money By Jeremy Yohe FinCEN Leans On Title Industry to Help Snuff Out Money-laundering Schemes and Collect Information About Suspicious All-cash Deals Features 7 24 Departments ALTA NEWS INSIDE ALTA How to Use ALTA’s Homebuyer New 2016 ALTA/NSPS Land 5 Guide: Rack Cards Title Survey Standards Now From the Publisher’s Desk ALTA’s Homebuyer Guide has More Than Effective 60 Resources for Direct Consumer Education Nearly All Changes Directly or Indirectly 6 Assist Surveyors, while Not Diminishing ALTA News 17 the Value of Title Insurance RUNNING YOUR BUSINESS 8 Managed Disbursement 28 @altaonline Is a Growing Trend in the INDUSTRY NEWS Settlement Arena OFAC Updates SDN and 28 By Michael Holden Blocked Persons List Industry News Several Viable Options Available in the Title and Settlement Agents Should Marketplace Scan List on Regular Basis to Ensure 32 Compliance TIPAC Contributors 21 RUNNING YOUR BUSINESS 29 38 The Value of Electronic INDUSTRY NEWS The Last Word Verification of Reconciliation Former ALTA President Integrating Banking Data with Settlement Robert Dawson Passes Away Account Software Important to Provide Robert Dawson, ALTA’s 1973-74 president, ‘Full Story’ passed away Jan. 5 at the age of 92 www.alta.org > February 2016 > TitleNews 3 calendar PUBLISHER EDITOR IN CHIEF COMMUNICATIONS 2016 ALTA CONFERENCES Michelle L. Korsmo Jeremy Yohe MANAGER March 16 Social Media Shawn Sullivan Summit ASSOCIATION OFFICERS ASSOCIATION EXECUTIVE STAFF Indianapolis, IN PRESIDENT CHIEF EXECUTIVE OFFICER March 16-18 Business Strategies John Hollenbeck NTP Michelle L. Korsmo Conference First American Title Insurance Co. Indianapolis, IN Santa Ana, CA VICE PRESIDENT OF GOVERNMENT AFFAIRS May 16-18 Federal Conference PRESIDENT-ELECT Justin Ailes Daniel D. Mennenoh & Lobby Day CHIEF OPERATING OFFICER H.B. Wilkinson Title Co. Washington, DC Cornelia Horner, CMP Galena, IL October 4–7 Annual Convention VICE PRESIDENT Scottsdale, AZ TREASURER Kelly Romeo, CAE Steven Day Fidelity National Title Group VICE PRESIDENT OF COMMUNICATIONS STATE CONFERENCES Jacksonville, FL Jeremy Yohe April 6 - 8 Palmetto Cherokee, NC CHAIR, FINANCE COMMITTEE Jack Rattikin III April 7 - 8 Tennessee Rattikin Title Company Pigeon Forge, TN Fort Worth, TX April 14 - 16 Oklahoma CHAIR, TITLE INSURANCE Catoosa, OK UNDERWRITERS SECTION Stewart Morris Jr. April 24 - 26 California Stewart Information Services Corp. Newport Beach, CA Houston, TX BOARD REPRESENTATIVES, TITLE INSURANCE UNDERWRITERS SECTION Mary O’Donnell Westcor Land Title Insurance Company TitleNews is published monthly by the Winter Park, Fla. American Land Title Association. United States and Canadian subscription rates Daniel M. Wold are $100 a year for members and $300 Old Republic National Title Insurance Company a year for nonmembers. For subscription Minneapolis, MN information, call 800-787-ALTA. CHAIR, ABSTRACTERS AND TITLE Send address changes to TitleNews, INSURANCE AGENTS SECTION American Land Title Association, Look at What You’re Missing 1800 M Street, Suite 300 S, Washington, D.C. in this month’s Digital Issue Cynthia Blair NTP Blair Cato Pickren Casterline, LLC 20036-5828. Columbia, SC Anyone is invited to contribute articles, Digital Edition reports, and photographs concerning BOARD REPRESENTATIVES, issues of the title industry. The Association, ABSTRACTERS AND TITLE AGENTS however, reserves the right to edit all SECTION material submitted. Editorials and articles William Burding are not statements of Association policy and Orange Coast Title Family of Companies do not necessarily reflect the opinions of the ALTA CEO on NPR; Santa Ana, CA editor or the Association. Protecting Escrow Accounts Richard H. Welshons Reprints: Apply to the editor for permission Michelle Korsmo, ALTA’s CEO, talks DCA Title to reprint any part of the magazine. Articles with NPR about FinCEN’s order to Hastings, MN reprinted with permission must carry the following credit line: “Reprinted from collect information about suspicious IMMEDIATE PAST PRESIDENT TitleNews, the monthly magazine of the all-cash transactions. Check out a Diane Evans NTP American Land Title Association.” Land Title Guarantee Co. portion of a recorded webinar that Denver, CO ©2016 American Land Title Association addresses Best Practices to protect your escrow trust accounts. Go to www.alta.org to get your copy of Digital TitleNews Today! Members Call Toll Free: 800-787-ALTA • Members Fax Toll Free: 888-FAX-ALTA Visit ALTA Home Page: www.alta.org • Email Feedback to: [email protected] 4 TitleNews > February 2016 > www.alta.org from the publisher’s desk Connect with Your Customers ’ve been talking about getting to know your customer for the past couple of years. As we have been doing work at ALTA to develop the right messages and materials, one of the more interesting things I’ve learned about is the Net I Promoter Score. Essentially it works like this, a company surveys its customers and asks a simple questions on a scale of zero to 10 how likely they would be to recommend their products or services. Scores of nine to 10 are considered promoters. Detractors are those who give a score of zero to six. (Sevens and eights are unenthused and don’t factor into the score.) To figure the score, you take the percentage of promoters, subtract the percentage of detractors and get your Net Promoter Score. The key is to figure out why the promoters love doing business with you and why the detractors don’t. Closing the loop with your customers is an excellent way to learn what’s pleasing them so you can turn detractors into promoters. The Lego Group (the people who make the great kids’ toy that is a killer when it’s stepped on) took this approach after nearly going bankrupt about a decade ago because it expanded too far beyond its primary toy brick products. The company decided to get in the minds of its most important customers: children. That required collecting consistent feedback to find out why certain LEGO sets failed. This allowed the company to make tweaks earlier in the process and also launched the LEGO Friends line, successfully creating a product that girls wanted more than their traditional offerings. The point is that to succeed in this evolving market, you need to approach transactions from the eyes of your customer. Title professionals have a challenge because you must meet the needs and expectations of both homebuyers, who are our customers, and the Realtors and lenders with whom you do business. Gauging loyalty and determining which relationships generate revenue can be complicated. There’s a lot of customer data that can be collected and analyzed, but at the end of the day it comes down to a basic question: Do your customers love doing business with you? Interestingly, title professionals in two parts of the country will need to learn more about their customers due to recent orders from the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). FinCEN is requiring several title insurance underwriters to collect information on individuals involved in shell companies and other legal entities that make all-cash purchases for high-end residential real estate in Manhattan, N.Y., and Miami-Dade County, Fla. I encourage you to read more about the order in this edition’s cover article. A customer-centered approach takes commitment, but it’s a simple concept with positive results. — Michelle Korsmo, ALTA chief executive officer www.alta.org > February 2016 > TitleNews 5 ALTA news ALTA, Trade Groups Share Concerns Over Proposed FHFA Borrower Survey ALTA joined nine other appropriate for the the best circumstances, great harm to consumers trade associations in a government to better there’s a strong chance if the information were to letter to the Federal Housing understand the residential that system data could be released carelessly or Finance Agency (FHFA) mortgage markets, as be leaked or breached by unwittingly, or if it were to sharing concerns about a greater understanding of the hackers and other intruders be accessed by individuals proposed survey to collect current trends and forces and result in harm to aiming to do harm.” information on mortgage impacting homebuyers is consumers. ALTA encourages the borrowers. critical to the development “Data in the database FHFA: The proposed survey is of policies that foster a safe can be pieced together • review the goals of this part of a National Mortgage and sound marketplace,” with data from other private proposed survey Database project with the the letter states. and public databases • identify genuinely unique goal of including detailed However, the database: to identify individual data points not otherwise information on more than • is overly extensive borrowers and associate captured by existing 10 million borrowers. • poses a significant danger an even greater amount surveys FHFA intends to collect to consumer privacy of confidential information • utilize focus groups this information through through re-identification with them,” according to • reissue a more complete a voluntary survey of • is duplicative of other the letter. “There would be survey for comment. individuals who currently databases. have a first mortgage loan Because of this, ALTA NYSLTA Successfully Uses Title Action Network secured by single-family and the other trade groups In December, the New the fees would negatively residential property.
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