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. The believe the database should York State Land Title impact title agents across survey would be, in effect, not be introduced until Association (NYSLTA) the state. A TAN alert was an updated version of several steps are taken, successfully used the Title issued just as Treuber FHFA’s existing National including consultation with Action Network to convince testified before the county Survey of Mortgage the Consumer Financial Nassau County legislators legislature. Following Borrowers. Protection Bureau (CFPB) to to delay implementation Treuber’s comments The proposed survey ensure that FHFA and CFPB of new fees for tax map and the TAN alert, the would use a questionnaire data cannot result in re- verification and recording county legislature passed consisting of 80 to 85 identification of consumers. certain documents with the an emergency action to questions intended to elicit The steps should also county. postpone implementation of information from mortgage include soliciting additional The fees were approved the fees until Jan. 4. borrowers about their loans. input on the survey topics as part of the county’s 2016 As your state plans its FHFA’s stated goal of the and questions. budget and only gave the 2016 advocacy efforts, database is to “support There is significant industry 48 hours’ notice. contact Awesta Sarkash, policymaking and research concern over privacy issues Bob Treuber, executive ALTA’s grassroots and efforts to understand due to the extent of the director of NYSLTA and advocacy manager, at emerging mortgage and database and the number Marianne Mathieu, the [email protected] to learn housing market trends.” of individuals who will be association’s president, about the value TAN brings “We believe it is allowed access. Even under contacted TAN about how to your state association.

6 TitleNews > February 2016 > www.alta.org ALTA news

How to Use ALTA’s Homebuyer Guide: Rack Cards ALTA created the rack cards available to 10 Steps to Buy Your You Sweat the Small Stuff Homebuyer Guide to members to provide to Home with Confidence How to Use: Pin this help members easily consumers and real estate How to Use: Real estate to the company fridge, communicate the benefit of partners. Go to alta.org/ agents can use “The share it with a fellow title owner’s title insurance. The homebuyer to view all the Homebuyer Checklist: 10 professional or use it as a Homebuyer Guide includes material available in the Steps to Buy Your Home guide for remembering the more than 60 marketing Homebuyer Guide. with Confidence” top three things you give resources available for PowerPoint in conjunction homebuyers. Below is what direct-to-consumer The FAQs of Title with this rack card. It can the top of this marketing communication. These Insurance for also be displayed in the real piece looks like: materials are available to Homebuyers estate office. An example members. How to Use: This rack of half of the back of this Here, we focus on card can be displayed in the rack card is below: how you can use the closing office or real estate various rack cards that are office, or be hand delivered available. What is a rack when meeting with card? These documents are homebuyers. Below is the used for advertising, and top of the front of this card: frequently found in hotels, restaurants, rest areas and other locations that get significant foot traffic. Rack cards typically have an appealing graphic design Carr, Riggs & Ingram Named ALTA Elite Provider and are 4-by-9 inches in ALTA announced that to deliver a heightened size. Carr, Riggs & Ingram client experience. Once ALTA has created three (CRI) has been named compliant, CRI works with an Elite Provider. ALTA’s title companies to deliver Register for ALTA Homebuyer Outreach Program Elite Provider Program a compliance certification Workshop to Improve Consumer Communication is comprised of service report that lenders may Title professionals Upcoming workshops providers committed to require to be included (or to across the country will be held: offering comprehensive remain) an “Approved List.” have asked for training • Minnesota, April 3 benefits to the title This marketing differentiator on ALTA’s Homebuyer • New Jersey/New York/ insurance and settlement can help title companies Outreach, so ALTA Pennsylvania, April 12 services industry. gain a competitive edge in has scheduled several • Florida, April 19 CRI helps title companies their marketplace. workshops across the • Missouri , Aug. 9 prepare for ALTA Best CRI offers ALTA members country. The workshops Go to meetings.alta.org/ Practices compliance a complimentary one-hour provide information on how hop for more information certification process. With consultation regarding to educate consumers and to register. CPA offices in 20-plus any ALTA Best Practices about the benefits of title markets, CRI can provide subject(s) of their choosing insurance, manage online ALTA members with a with a CRI partner and will consumer complaints and level of responsiveness provide a summary outlining promote your business. and accessibility designed the conversation.

www.alta.org > February 2016 > TitleNews 7 @altaonline

March Title Madness is Coming! Marh

Our annual March Title Madness trivia tournament is March 15-April 4 on ALTA’s Facebook and Twitter accounts. Each year during Title Madness, we post industry trivia and each correct answer enters participants for a chance to win great ALTA prizes. Do you have great title 28 Ways We Love Title is Back! trivia that we should include this Each day in February, we post one of the many reasons that we love our year? Email us at [email protected]. members and the land title insurance industry! From our “Keep Calm and Love Title” images to our industry pride posts, we’ll cover all of the ways SMS Registration is Open this industry is a vital part of the housing industry. This year, we’ll offer a few Registration for ALTA’s 2016 prizes during the promotion as well. Be sure to like ALTA on Facebook at Social Media Summit (SMS) is www.facebook.com/altaonline and follow us on Twitter with @ALTAonline. If open. Visit meetings.alta.org/sms for you have your own ways you love this industry, email us at [email protected] so information on the schedule and that we can include you this month. more. Our closing session speaker at this year’s SMS will be Steve Lerch from Google. If you have questions Social Media Pro-Tip: Is Social Media Included in Your IT Protocol? or experience any registration issues, As many ALTA members continue organization to prevent the release please call 202-261-2932. to work on the Best Practices pillars, of confidential/sensitive customer it’s important to remember to include information over social media What is Snapchat, Anyway? social media procedures in your accounts. Finally, establish controls Don’t forget that ALTA has IT security breach protocol. Think and procedures to research and developed a social media dictionary through your plans for limiting monitor the actions and security of with terms and definitions for several your organization’s social media any third-party tools used for social of the most popular social media presence during a security breach. media efforts at your company, such sites, including Facebook, YouTube, Create a system for monitoring and as Hootsuite and Tweetdeck. Twitter and yes, even Snapchat. For responding to complaints during any a copy of the dictionary, check out potential crisis. Establish safeguards ALTA’s Homebuyer Guide at that work for the size of your www.alta.org/homebuyer. 8 TitleNews > February 2016 > www.alta.org The title industry is like the tide.

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Old Republic Title’s policy-issuing underwriters are Old Republic National Title Insurance Company and American Guaranty Title Insurance Company | © Old Republic Title | 12/15 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

uring last year’s Money Laundering Enforcement Conference (held jointly by the American Bankers Association and the American Bar Association), the director for The Financial Crimes Enforcement DNetwork (FinCEN) provided a glimpse of the government’s intention to analyze all-cash residential transactions. “BSA (Bank Secrecy Act) analysis continues to show corrupt politicians, drug traffickers and other criminals using shell companies to purchase luxury real estate,” said FinCEN Director Jennifer Shasky Calvery. “We see wire transfers originating from foreign banks in offshore havens where shell companies have established accounts. The criminals will instruct the person involved in the settlement and closing to put the deed in the name of the shell company, thereby hiding the names of the actual owner or owners.” >>

By Jeremy Yohe

10 TitleNews > February 2016 > www.alta.org

cover story

BSA established anti-money laundering obligations for financial Basics of the Geographic Targeting Orders institutions, including institutions Which transactions must be reported? Covered transactions are the involved in real estate transactions. specific transactions that must be reported to FinCEN. To be a covered This covered real estate purchases transaction all of the following elements must be present: financed by some type of mortgage— 1. The buyer must be a legal entity (a corporation, limited liability company, roughly 78 percent of residential partnership or other similar business entity, whether formed under the laws of a state or of the United States or a foreign jurisdiction) transactions, according to the National Association of Realtors. 2. Must be residential property located in the borough of Manhattan, N.Y., or Miami-Dade County, Fla. “So our current regulatory structure captures this activity,” Calvary noted. 3. For a purchase price of more than $3 million (Manhattan) or $1 million (Miami) As a result, all-cash deals were not 4. Made without a loan or other financing from a financial institution included in the data being collected, 5. Any portion of the purchase price is paid using currency, cashier’s check, and “it is this 22 percent that has our certified check, traveler’s check or money order attention,” she added. According to data from RealtyTrac, Who must report these transactions? The specific title insurance company the share of cash transactions is even (covered business) that received the order must report covered transactions larger. RealtyTrac reported that all- to FinCEN. Covered businesses also include any subsidiaries or agents of cash sales jumped to 38.1 percent of the title insurance company. U.S. single family home and condo sales during November. This is the When must a covered transaction be reported to FinCEN? Within 30 days highest level since March 2013, when after the settlement or closing. 38.8 percent of sales were all-cash. “Given that we saw spikes in cash What time period is the GTO in effect? All covered transactions that settle sales at the state, as well as national between March 1 and Aug. 27, 2016, must be reported. level, we can assume that this was not a geographically isolated incident and How long must records for covered transactions be retained? Five years that there were more fungible reasons from Aug. 27 or the end date, if the order is renewed. for it,” said Matthew Gardner, chief economist at Windermere Real Will the GTO stop transactions from closing? The order is not meant to Estate. prevent closings from happening. It is meant to allow Treasury to collect Although real estate title and information about these transactions. escrow companies are not specifically listed among the businesses defined What information must a covered business report about a covered as financial institutions in the BSA, transaction? If a covered business is involved in a covered transaction, the “persons involved in real estate information must be reported to FinCEN within 30 days after the closing closings and settlements” are listed using a Form 8300. The report must include: • as financial institutions. FinCEN Identity of the individual primarily responsible for representing the legal entity • has not issued regulations defining A copy of a driver’s license, passport or other similar identifying document for who is included in this category, the person primarily responsible for representing the legal entity • but Geographic Targeting Orders Identity of the legal entity and any of its individual beneficial owners • (GTOs) issued in January highlight A copy of the beneficial owner’s driver’s license, passport or other similar the increased focus on the money identifying document • laundering risks associated with real Date of closing • estate transactions. Total amount of monetary instruments transferred (see 31 CFR 1010dd) • FinCEN is concerned that all- Total purchase price • cash transactions are being used by Address of the real property involved in the covered transaction individuals to hide their assets and 12 TitleNews > February 2016 > www.alta.org cover story

Criminal Penalties beneficial ownership information of Type of Violation Penalty legal entities purchasing certain high- value residential real estate without Willful violation Up to $250,000 fine and external financing. A beneficial five years in prison owner is an individual or entity who Willful violation while violating Up to $500,000 fine and directly or indirectly owns 25 percent another law of the United States 10 years in prison or more of the equity interest in the Structuring or assisting in Fine and up to five years in prison legal entity. FinCEN will provide structuring a transaction to avoid the information to law enforcement the currency transaction reporting investigators through its database. It’s important to know that Civil Penalties FinCEN will not make the ownership Type of Violation Penalty interest public. The celebrity or high- Willful violation Greater of the amount involved profile personality will theoretically (a separate violation occurs for each (up to $100,000) or $25,000 be able to retain anonymity when day the violation continues and making legal purchases. This was a each location a violation occurs) concern for Nancy Farrell, president Failure to file a report, material Not to exceed the amount of Venture Title Agency in New York. misstatement or omission involved in the transaction “To put it in simple terms, I’d be concerned if I received a letter Structuring or assisting in Not to exceed the amount structuring a transaction to avoid involved in the transaction from the government. And I could the currency transaction reporting expect my office to start getting calls based on any letters received by a Negligence Not to exceed $500 or $50,000 if a pattern of negligence is found purchasing entity,” she said. If the purchase involved in the covered transaction is a limited identities by purchasing residential covered business includes the insurer’s liability company, the underwriter properties through limited liability agents, only one report is required for must provide the name, address and companies or other opaque structures. each covered transaction. Depending taxpayer identification number of all According to the GTOs, several on the policy and procedures of the its members. Businesses must report title insurance underwriters must covered insurer, the report can be any covered transaction within 30 identify the names of individuals filed by either the insurer or their days after settlement or closing. involved in shell companies and agent. Additionally, covered title other legal entities that make all-cash “Over the years, our rules have companies must retain all records purchases for high-end residential evolved to make the standard relating to compliance with the order real estate in Manhattan, N.Y., that mortgage market more transparent for five years, store the records so they exceed $3 million, and Miami-Dade and less hospitable to fraud and are accessible within a reasonable County, Fla., that exceed $1 million. money laundering,” Calvery said. period of time and make the data To help mitigate this potential “But cash purchases present a more available to FinCEN or other law money-laundering vulnerability, complex gap that we seek to address. enforcement or regulatory agencies, FinCEN requires certain These GTOs will produce valuable upon request. underwriters to identify and report data that will assist law enforcement There are violations for not the true “beneficial owner” behind a and inform our broader efforts to complying with a GTO. Penalties can legal entity involved in certain high- combat money laundering in the real be assessed any time within six years end deals in these two areas. The estate sector.” from the date of the transaction. Civil reporting requirement also pertains Under specific circumstances, the actions may be commenced within to the underwriters’ subsidiaries and orders require certain underwriters two years of the date of the penalty or agents. While the definition of a to record and report to FinCEN the criminal conviction. www.alta.org > February 2016 > TitleNews 13 cover story

Collection of Information ALTA Asks for Clarification title companies identify covered Information needed for the report ALTA is actively assisting our transactions. can be obtained directly from the members to comply with these • ALTA recommends that the purchaser and any of the beneficial reporting requirements. definition of “Legal Entity” owners or by relying on information “ALTA looks forward to continuing exclude trusts. The order defines provided by the real estate agent its work with FinCEN as members the term “Legal Entity” as a or attorney involved in the deal. implement the order to help prevent “corporation, limited liability In past GTOs, companies have money laundering schemes and company, partnership or other used questionnaires and affidavits the illegal purchase of real estate in similar business entity.” According as tools to collect and report the United States,” said Michelle to the letter, ALTA said that information. Korsmo, ALTA’s chief executive unlike a corporation, a trust is ALTA is working with the officer. “As the independent third- not considered a separate legal underwriters involved in the GTO party at the closing table, ALTA entity under the common law in developing a standard format members work to safeguard real of various states. Adopting this to collect and report the data. estate transactions for millions of recommendation will provide a Information needed to complete Americans every year. Our work definition consistent with those form 8300 cannot be withheld due with FinCEN underscores ALTA used by the industry for the to attorney-client privilege. members’ commitment to providing purposes of determining how to In the case United States v. a compliant real estate settlement effectively transfer title. Goldberger & Dublin, P.C., the experience.” • ALTA also suggests that the court held that absent special In January, ALTA submitted a definition of “agents” refer only circumstances, attorneys were letter to FinCEN’s director asking to people or entities with a required to disclose client for clarifications on several points contractual relationship with information on Forms 8300. to promote consistency in reporting the covered title company. State Additionally, the court held in and to help the industry better insurance laws require insurers United States v. Leventhal that state understand which transactions are to appoint agents via a specific bar ethical rules do not constitute covered by the order. written contract or authorization. a “special circumstance” that would • ALTA proposes FinCEN adopt This will help the insurers protect clients’ names and fee RESPA’s definition for “residential.” consistently determine which arrangements from disclosure. Industry familiarity with the business partners they must definitions and regulatory scheme educate and supervise to comply. provided by RESPA will help • ALTA asked that the record Moving Dirty Money from a Taiwanese Fruit Basket to a Condo in New York According to federal prosecutors, this money-laundering example that started in 2004 only took eight steps. 1. The Bribe 3. The Offshore Shell 5. The Swiss Bank In 2004, five or six fruit boxes filled Wu’s operatives set up a shell Cash from the Hong Kong account with a $6 million cash bribe were company in the British Virgin Islands, was wired into a Swiss account sent to Wu Sue-Jen, the First Lady of Asian Piston Investment Ltd., listing controlled by another British Virgin Taiwan, to help a company involved in front men as its officers. Islands company, Avallo Ltd. Avalo’s a contested acquisition. owner: Wu’s daughter-in-law. 4. The Swap 2. The Way Station The executive pocketed some of the The money was stored in a bank vault cash in his basement, then moved in Taipei, then stuffed into suitcases overseas money of his own into a and moved into the basement of an Hong Kong bank account controlled executive involved in the merger. by Asian Piston.

14 TitleNews > February 2016 > www.alta.org cover story

retention period be consistent ALTA CEO Michelle Korsmo on NPR with state requirements. Following a meeting with FinCEN staff, the department seemed amenable to all of ALTA’s concerns except for the recommendation of determining when a purchase an earnest money deposit) or a service real estate. It should be noted that the is made, at least in part, using connected with the transaction may order is not meant to prevent closings a monetary instrument. ALTA be paid for outside the closing. In from happening. It is meant to allow suggested the order not cover these situations, a title insurer could the Treasury to collect information transactions when only a minimal be unaware that a specific transaction about these transactions. ALTA is amount of the transaction price is is covered by the order. working with underwriters and the paid via a monetary instrument. “We urge FinCEN to use a National Association of Realtors to ALTA believes the de minimis reasonable and good-faith test for develop a standard form to collect threshold should be the current determining insurers’ compliance information for a covered transaction. $10,000 requirement for filing a with this order,” Korsmo wrote in the FinCEN is expected to provide a currency transaction report under letter. “We believe the clarifications FAQ to help industry participants current Internal Revenue Service requested and joint education with understand what’s required. (IRS) and FinCEN regulations. the insurer and FinCEN should FinCEN said title insurance Under state real estate settlement ensure that all covered transactions companies play a central role in real laws or industry practice, settlement that the insurer is aware of will be estate transactions and can provide agents require collected and settled reported; however, even with the best valuable information about potential funds for the closing of a real efforts of title insurers, there may be illegal activities. estate transaction. This process transactions of which the insurer is “FinCEN appreciates the assistance traditionally requires the transmission not made aware.” and cooperation of the title insurance of settlement funds via wire To aid compliance, title companies and the American Land transfers, which are not considered professionals are encouraged to have Title Association in protecting the monetary instruments under the a better understanding of the types of real estate markets from abuse by order. However, in some instances customers they do business with. Real illicit actors,” FinCEN said in a a minimal amount of the purchase estate agents and attorneys should be release. price may be held by a third party resources to help gather information Expecting title companies to be (such as the real estate agent holding about corporate entities purchasing able to identify when a criminal Moving Dirty Money from a Taiwanese Fruit Basket to a Condo in New York According to federal prosecutors, this money-laundering example that started in 2004 only took eight steps. 6. The Middle Man in Miami 8. The Chelsea Condo The Fallout Money was then wired to a trust On May 29, 2008, the LLC, with U.S. authorities seized the apartment account in Florida linked to Stefan funds from the trust account, amid investigations in Taiwan that Seuss, a wealth advisor there. purchased a $1.575 million apartment landed the former First Couple in in the Onyx on West 28th St. in prison. In 2013, the property was 7. The Front Company Manhattan, N.Y. auctioned for $1.5 million. As part Seuss created a New York firm, West of a settlement of the litigation, 28th Street LLC, owned by Avallo $225,000 was given to Avallo Ltd. Ltd.

www.alta.org > February 2016 > TitleNews 15 cover story

buys a mansion through a string of “We’ll do what the government “If an agent writes for a bunch of shell companies may be a reach, but tells us to do in an effort to curb underwriters, they could just opt to Korsmo said the industry will give money laundering, but how far down send the deal to an underwriter that the government the information it the LLC trail do we have to search?” didn’t receive a GTO,” Tafuri said. can collect. It can become difficult Tafuri asked. “The New York City He added that it’s a noble cause, to identify ownership when LLCs Register’s Office already requires that but another layer of compliance for are layered on top of others. If a LLCs provide the names of their title professionals to contend with. purchasing legal entity is owned members. If members of the LLCs “We just got licensed in the state in by a series of other legal entities, are LLCs or corporations, we stop. 2014, we have to deal with TRID, we the GTOs require the reporting of That’s what’s required for transfer tax started collecting sales tax on searches information about the beneficial purposes.” that we never had to do prior to owners of any of the legal entities in Tafuri said the orders won’t have 2010, and now this. All this extra the series. any impact on deals involving work requires labor. It doesn’t happen Thomas Tafuri, counsel and co-ops in New York because these in a vacuum,” Tafuri said. “And why is co-owner of Regal Title Agency in transactions typically don’t include it just Manhattan and Miami? Why New York and chair of the Land title insurance. does Los Angeles get a pass? Maybe Records Committee of the New In addition, the requirements they don’t want to offend their York State Land Title Association, for only certain underwriters to Hollywood friends. I wouldn’t be understands the point of the order provide the information for covered surprised if FinCEN expands these but believes this is “a good example of transactions could shift market share orders to other areas.” government overreaching in its quest to underwriters not required to Farrell of Venture Title voiced to nationalize everything.” comply with the order creating an the same concerns, adding that title unfair competitive advantage. professionals will need to make sure their employees understand what’s required if they receive an order that’s Cash Deals Make a Comeback within FinCEN’s covered transaction parameters. “They are asking us to play policeman,” she said. “We do make sure things are done—to the best or our ability and resources—to transfer the property legally. And we do search out information on these entities as much as we can based on what’s available to us. You become comfortable in what you have to do for a deal, and this will be another item for title professionals to flag in a file and remember to collect the data if needed. It’s adding another step, which ultimately takes more time.” n

Jeremy Yohe is the vice president of communications at the American Land Title Association. He can be reached by phone at 202-261-2938 or at [email protected].

16 TitleNews > February 2016 > www.alta.org running your business

of escrow accounting controls for Managed Disbursement small agencies has run as high as $40,000 per year. Is a Growing Trend in The Advent of Managed Disbursement Necessity is the mother of the Settlement Arena invention. Shortly after the CFPB’s Several Viable Options Available in the Marketplace “service provider” bulletin was issued, two companies started thinking BY MICHAEL HOLDEN about how they could reinvent the settlement process and become a he Consumer Financial implement to be in a position to solution for ALTA Best Practice No. Protection Bureau (CFPB) provide lenders with the confidence 2 compliance. They each came up issued the “third-party to continue to do business with that with a different approach to solving T service provider” bulletin agency. With much progress being this area of compliance, and both to lenders on April 13, 2012, and made in implementing the Best are poised to change the way title the title and settlement industry Practices, one area of compliance is insurance and settlement agents do gasped. Suddenly, the sky was falling still proving extremely difficult for their business. and industry professionals began a small agencies — pillar No. 2 which One of these companies is PCN public discussion about the future addresses escrow accounting controls. Network, which is a member of of the small title agent. Would This pillar requires the ALTA’s Elite Provider program. small agents be able to compete in management of an escrow account PCN introduced a service called a new environment where lenders and timely reconciliations. Daily SafeEscrow, which is built on were seeking better oversight and balancing, segregation of duties a proprietary patent-pending control over their title and settlement among personnel, positive pay technology that centralizes controls. providers? Would small agents be systems with banks and personnel This makes it look like the agent is able to compete with underwriter who perform escrow functions now disbursing locally. This disbursing and large multistate agents for needing background checks are model removes the need for an business? Would lenders demand a all significant increases in expense escrow account from the title centralized disbursing model where and time for the small title agency. insurance and settlement agent. The the underwriter controlled the funds The cost to add new software for title agent controls the process, using for each closing? daily reconciliation and the cost SafeEscrow’s online portal to input Fortunately, with a great deal of of personnel needed to manage disbursements, receipts and payoffs. work and input from the lending positive pay exceptions could mean SafeEscrow confirms receipt of funds, community, the American Land unsustainable expense for the average clears those funds, and when the title Title Association (ALTA) developed title agency. On top of this, agencies agent approves the disbursement, its “Title Insurance and Settlement are likely to need certification from Safe Escrow enables the title agent to Company Best Practices.” This independent parties with respect print checks for the closing directly framework laid out the compliance to compliance with this pillar. The from the SafeEscrow portal. When areas a title agency would need to overall cost to comply with all areas the title agent confirms the closing www.alta.org > February 2016 > TitleNews 17 running your business

is completed by releasing funds in Compare the business models of a traditional the system, wire payoffs are sent title agent to that of the Nexus program directly to lenders and positive pay is Traditional Title Agent NEXUS Title Agent submitted, making the checks valid. Gross sales $250,000 Gross Sales $250,000 SafeEscrow ensures that all control ($175K title premiums + $75K closing fees) ($175K title premiums + $75K closing fees) structures, daily bank reconciliations, Percentage from each premium to agent – 35% escheat management and all Expenses: Percentage from each closing fee – 50% other escrow account compliance Underwriter $52,500 Net premium income Nexus program = $62,250 requirements to meet ALTA Best Salaries (agent plus two employees) $120,000 Practices are in place. Rent, office expense $35,000 Net closing income Nexus program = 37,500 Another company to develop Other expenses $20,000 Total Income = 99,750 a disbursing solution is Entrust E&O, Bonds, Insurance $3,600 Expenses: Solutions. With its Nexus program, NET profit $18,900 Office (executive shared office) $6,000 a small title agent can move a (assumes agent pays themselves a E&O, Bonds, Insurance $3,600 significant portion of its back-office salary of $40,000 a year) production to Entrust Solutions. Other expenses $4,000

Unlike the SafeEscrow system, which Total earnings = $58,900 only manages disbursements, Entrust NET profit/Salary for title agent $86,150 manages the entire title process. They In states where a fee is paid separate for the produce the commitment, policy and search, the agent usually can earn that fee CPL, they review and approve the as well. Closing Disclosure, and they receive and disburse funds. The Nexus Total earnings = $86,150 agent becomes the focal point to the customer by providing: • the search and title exam • curative title work; “There is no way I could maintain No bank accounts, no reconciliations, • correspondence with the lender and an escrow account, the bonds, a staff no compliance certification required delivery of the commitment, CPL, person to reconcile and the software from agent,” he said. wire instructions and preliminary to balance daily for what we pay The Nexus program from Entrust Closing Disclosure SafeEscrow for each disbursement,” Solutions provides a different solution • loan closing and signing service she said. “The cost difference for for agents than SafeEscrow. Closer • recording my E&O policy was a savings of to the property and casualty model • packaging and submission of the 70 percent when priced with my of insurance than a traditional title final closing package.Entrust company not maintaining an escrow agency, the Nexus program allows an provides the back office work to account.” agent to become significantly more produce the file, disburse the funds Tom Frunzi, senior vice profitable in a short period of time. and issue the policy. president of business development “At first, I was skeptical about The impact on the title agency for at SafeEscrow, said his company working with Entrust and whether it either of these programs is positive. provides agents with the ability to would be a smooth process or not,” Michigan title agent Erika Weichel control their own agency, do the title said Rosemary Plasencia of Allied of Michigan Investment Title began and curative work and just outsource Title and Trust LLC in Miami. using SafeEscrow in 2014. She now the escrow management function. “However, for the past six months processes over 100 closings a month “SafeEscrow is the only available that I have been working with them, on its system. The charge for the technology where an agent can use a I have no complaints and I do see SafeEscrow service is passed on to the technology to create a disbursement, a value in their service. They are consumer and the cost of maintaining review and approve the disbursement prompt and very easy to work with.” an escrow account is eliminated. and print their checks at the table. 18 TitleNews > February 2016 > www.alta.org running your business

The Nexus program operates Safeguarding Escrow Trust Accounts under the idea that a sole practitioner or small agency can greatly reduce overhead and become more profitable to operate as a home office or as a small location in an executive office suite. Based on the example of profit and expense below, what agent would not take the opportunity to earn significantly more income by operating as a home/small business? “The Nexus Program gives any attorney or agent, regardless of size, the opportunity to conduct settlements and issue policies with limited risk,” said Jonathan Yasko, president of Entrust Solutions. “The potential of increased net cost of E&O insurance up to 70 percent years we will see the emergence of profitability, while gross revenue for many agents. The Nexus program a property and casualty model for remains unchanged, has even large from EnTrust also shifts liability away the title insurance industry where agents joining the Nexus Program. from the title agent. In the EnTrust the small agent monetizes the This will allow you to work smarter, model, the potential savings on E&O relationships while title production not harder.” insurance will depend on what services and the underwriting is handled by the title agent provides. the underwriter.” Although Stone imagined an underwriter-centered model to control the disbursements, n we can see that high-quality solutions Options exist for small agencies are being brought to the marketplace that want to maintain a full-service that expand his idea to a network of specialized service providers. shop with all functions except Options exist for small agencies that want to maintain a full-service disbursing on site. shop with all functions except disbursing on site. For those agents who are feeling the pressure from shrinking margins Reducing Title Agent Liability Future Bright for and need a new business model that Considering the higher cost for E&O Small Title Agents includes managed disbursement, coverage with the risk of cyber breaches In 2012, there was a well-founded there are viable alternatives for them and unauthorized access, escrow fear that the extinction of the small as well. n accounts are fraught with liability. title agent had begun. Underwriters Both the SafeEscrow and Nexus were discussing ways to eliminate the Michael Holden is vice model shift the liability to the manager agent from the process. president of North American of the disbursements. In the case of As far back as April 2011, Pat Title Insurance Co. He is a SafeEscrow, PCN Network maintains Stone, chief executive officer of regular speaker at state land all the liability for the escrow account— Oregon-based Williston Financial title association events around even the liability from a cyber breach. Group, the parent company of WFG the country. He can be reached at This shift in liability has reduced the Title Insurance Co., said: “… in five [email protected]. www.alta.org > February 2016 > TitleNews 19

running your business

then take steps to find out where The Value of Electronic the funds have gone and why. It is important that the reconciliation of accounts is performed by someone Verification of who does not have disbursement authority over the account. This is because escrow account theft is not Reconciliation only conducted by cyber thieves, Integrating Banking Data with Settlement Account who have no relationship with the company. It can also be done Software Helps Provide ‘Full Story’ by employees who have access to accounts. This is why reconciliation hen ALTA published to protect your accounts. According is so crucial—theft can come from a its “Title Insurance and to ALTA, one of the ways to ensure variety of places and it is sometimes Settlement Company Best compliance with Pillar No. 2, and very difficult to detect. W Practices,” it indicated that the protection of your clients’ funds, Reconciliation ensures escrow the seven pillars were meant to be is to make certain your escrow account accuracy and allows for guidelines to help the industry meet trust accounts are reconciled on detection of irregularities so that market requirements and protect a daily basis. In addition, three- you can rectify them quickly. Three- consumers. Although these guidelines way reconciliation should be way reconciliation is similar but are voluntary, many in the settlement performed at least once a month. more critical as it compares the bank services industry meet and exceed Most importantly, the results of the statement, checkbook and escrow these benchmarks in order to ensure reconciliations should be accessible trial balance to ensure consistency. compliance with regulatory and for electronic verification. If, after reconciliation, the numbers industry standards. do not pan out, you know that you One of ALTA’s most critical Best Defining Reconciliation need to investigate and correct Practice standards is Pillar No. 2: Reconciliation is a way to the problem. The problem could Adopt and maintain appropriate compare receipts and disbursements turn out to be an error in the written procedures and controls for to make sure they are consistent reconciliation itself, but could also Escrow Trust Accounts allowing for with each other. This is an reveal evidence of a security breach, electronic verif ication of reconciliation. important way to identify any or even fraud. Something agents may not realize escrow account problems—whether It is also critical to make sure that is that the key words contained they are due to an error or nefarious evidence of your reconciliation is in Pillar No. 2 are “electronic causes, such as theft, fraud or reliable and accessible electronically. verification of reconciliation.” compliance violations. The idea is What this means is that the The focus of this pillar is that it is similar to balancing your personal complete reconciliation should be absolutely critical to safeguard client checkbook each month—you are available in an electronic format so funds. The loss of client funds could looking for errors or problems in you (and others) can verify it, access mean the closure of your business, your account that need to be fixed. it, and keep it for your own records. and because of the increase in online If reconciliation shows that your “Electronic verification scams, it is becoming more difficult escrow account is short funds, you of reconciliation is an www.alta.org > February 2016 > TitleNews 21 running your business

important element within the The concept is best understood by background check. You need to recommendations of ALTA’s looking at the verification process verify that the information is Best Practices Pillar No. 2,” said for passports and visas in the United accurate by searching for more Dick Reass, founder and chief States. No longer is it a matter of data that can provide you with the executive officer of RynohLive. physically reviewing the passport individual’s full story. “Many times, companies do not or visa that is being presented. It Underwriters are also looking understand how critical this element is now a process of electronically for access to the full story. They is or why it is so essential, and, scanning the item and comparing it need more than just a paper copy unfortunately, electronic verification with the underlying data held by the of the reconciliation. They need of reconciliation is frequently Department of Homeland Security. the underlining data in order misunderstood.” So, for example, providing a to complete a true and accurate It is often thought that a PDF PDF version of the reconciliation verification. version of an agent’s reconciliation for verification is comparable to Finding a way to provide the is sufficient to comply with providing a hard copy of a passport correct information to your underwriter does not have to be difficult. One option in the n Underwriters are also looking market is provided by RynohLive, which provides daily three-way for access to the full story. They reconciliation of escrow accounts. Moreover, Rynoh has the ability to need more than just a paper copy verify reconciliation electronically of the reconciliation. because it integrates the bank data with the agent’s escrow accounting software data. More specifically, ALTA’s Best Practices. However, for verification. It provides the RynohLive connects to your that is not the case. It is vital that surface information but does not get banking data (providing READ agents provide proof of electronic to the underlying data. Scanning ONLY access) and your settlement verification of their reconciliation the passport allows for access to software in a secure, cloud-based or proof of the underlying data that in-depth information and provides environment and then automatically comprise the reconciliation. a more thorough verification. It is generates reports that allow you to “Sending a copy of your monthly the same idea with reconciliations— reconcile your accounts on a daily reconciliation to an underwriter by getting to the underlying data basis. Going back to the passport email is not electronic verification is critical for complete, accurate example, it is clear why integrating of your reconciliation, nor is it verification. banking data with the settlement providing electronic access to your Another example of electronic account software is so important. underwriter,” Reass said. “Emailing verification comes from companies “RynohLive provides the is simply sending a piece of paper that conduct security and underwriter with more than an in electronic format. Only by background checks for businesses. emailed piece of paper,” Reass providing the underwriter access These companies verify a person’s said. “It allows for true electronic into your accounting system, and identification by utilizing verification of reconciliation because the corresponding transactional government databases in order to it assimilates the underlying data. data processed by your bank, can cross-check background information In such a competitive industry, it is the underwriter truly electronically and search for warning signs that important not only to meet, but also verify that the reconciliation being the person is not who he says he is. to exceed, market standards. It is presented is accurate.” In other words, an individual can critical to be at the top of your game, You are probably wondering provide you with his identification, and one way to do that is to ensure why sending a PDF version of the resume and past work information, you are reconciling and verifying reconciliation is not sufficient? but more is needed for a thorough your accounts with accuracy.” n 22 TitleNews > February 2016 > www.alta.org ALTA PILLAR #2 TRUST ACCOUNTING

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Some of the documents referred to New 2016 ALTA/NSPS in the 2011 (and earlier) standards as “Record Documents” were not actually documents recorded in the Land Title Survey office of public record, thus the 2016 standards have abandoned the term “Record Documents” throughout, Standards Effective in favor of merely referencing those documents that are “to be provided to Feb. 23 the surveyor.” In several sections of the standards, Nearly All Changes Assist Surveyors, While Not content previously presented as lists in Diminishing the Value of Title Insurance paragraph form has been restructured into annotated lists for ease of reading. BY GARY KENT One example of this is in Section 4. This list of documents to be provided wo years of concentrated obligation to locate certain objects to the surveyor now includes “records effort by their committees and features (“observed in the process of established under state statutes for the of the American Land Title conducting the fieldwork”). purpose of imparting constructive notice T Association and National of matters relating to real property Society of Professional Surveyors Section 2 – Request for Survey (public records)” (e.g., deeds, copies culminated in the adoption of the The list of atypical properties or of easements), and any unrecorded new 2016 Minimum Standard Detail interests in real property that can be documents that affect the property Requirements for ALTA/NSPS Land the subject of an ALTA/NSPS Land and to which the client wishes the Title Surveys. The new standards go Title Survey has been expanded so surveyor make reference. into effect Feb. 23.The standards can that it clearly includes easements. The most important change to be found at www.alta.org/forms (under Section 4 is the last paragraph. All “Most Requested”). The following Section 4 – Records Research versions of the standards—dating is a brief overview of what title In recognition of the purpose of back to 1962—avoided outlining professionals and surveyors will likely an ALTA/NSPS Land Title Survey, exactly who was responsible for see as the most significant changes. the surveyor must be provided with obtaining other necessary documents. the most recent title commitment. That stance likely had its origins in General Comments However, if a title commitment is trying to adapt widely varying state The title of the standards has not made available, title evidence standards and standards of practice changed to “ALTA/NSPS” from satisfactory to the title insurer—which to a national standard. Regardless of “ALTA/ACSM” in order to might include an abstract of title, a the reason, it was past time for the acknowledge the merger of ACSM title opinion, an old title policy or one standards to address the issue. and NSPS. The committees also of the various other types of products The 2016 standards direct the made wording consistent throughout that title companies produce—is surveyor to look to his or her the standards (with one exception) acceptable. jurisdictional standards, whether when referring to the surveyor’s statutory (as they are in a few states) 24 TitleNews > February 2016 > www.alta.org inside the industry

or administrative/regulatory (as they are in most states) when either The Work of Two Committees • the documents that were to be A debt of gratitude is owed to members of the ALTA and NSPS committees provided by virtue of Section 4 are who participated in the process and to others who offered suggestions not forthcoming, or and comments. The joint committee was comprised of the ALTA Liaison • the surveyor needs other Committee with the NSPS and the NSPS Subcommittee on the ALTA/NSPS documents to complete the survey. Standards. The following participated in the joint committee work: For those states that have no jurisdictional standards, (California Chair and a few others) surveyors need to Gary Kent, Schneider Corp., Indianapolis be familiar with the normal standard of care as referred to in Section ALTA Members 3.D. Given the variations across the Richard F. Bales, Chicago Title, Aurora, Ill. country (and the fact that surveyors Daneece M. Berge, Old Republic National Title Insurance Company, Plano, Texas must comply with the laws and the Todd D. D’Amico PLS, First American Mortgage Solutions LLC, Norman, Okla. normal standard of care in their areas), Justin L. Earley, First American Title Insurance Company, Santa Ana, Calif. the committees felt this was the most James L. Gosdin, Stewart Title Guaranty Company, Houston logical and viable approach to this. Paul J. McNamara, Pabian & Russell LLC, Boston Michael F. Waiwood, North American Title Insurance Company, Elyria, Ohio Section 5 – Fieldwork Jack R. Zachow, Old Republic National Title Insurance Company, Tampa, Fla. The introductory sentences to Section 5 address precision when NSPS Members locating the various features in the Judy G. Beale LS, Woolpert, Chesapeake, Va. field. This issue had also been ignored Paul Burn PLS, GCW Engineers Surveyors, Las Vegas since 1962 and, again, it was past time Todd E. Rakstad PLS, SR/WA, Salt River Project, Phoenix to address it. The degree of precision Malcolm Shaw, Erlandsen Crowell & Shaw, LLP, New Hyde Park, N.Y. pursuant to the 2016 standards is to Curtis Sumner LS, National Society of Professional Surveyors, Gaithersburg, Md. be based on the surveyor’s professional judgment when taking into account The joint committee notes with sadness the untimely passing of NSPS “(a) the planned use of the property, if Member Advisor Malcolm Shaw, an experienced surveyor from New York reported in writing to the surveyor by and a valued contributor to the 2016 review and development process. the client, lender, or insurer, or (b) the Questions about the 2016 standards may be directed to ALTA staff liaison existing use, if the planned use is not so Kelly Romeo at [email protected]. reported ....” A number of fairly minor but the surveyor did not need to locate attended one of the author’s ALTA/ important modifications were made to any observed evidence of utilities. ACSM educational programs have Section 5; however, one major change However, if that utility evidence heard mention of a million-dollar is in subsection 5.E.iv. Essentially, fell within an easement for which lawsuit against a surveyor revolving what used to be Table A Item 11(a) documentation was provided, or around this very issue.) has now been made a required part of if that utility evidence represented an ALTA/NSPS Land Title Survey. the possibility of a prescriptive Section 6 – Plat or Map This will eliminate the conundrum easement, the evidence did need to Section 6 now addresses the issue caused by the dynamic between be located. Thus, there was confusion of dimensioning—leaving it to the former Table A item 11(a) (evidence over whether or not utility evidence judgment of the surveyor based on of utilities) and Sections 5.E.i. and needed to be located; and if the wrong the planned use of the property as ii. (observed evidence of easements) decision was made in that regard, reported (or not). When the surveyor in the 2011 standards. If Table A there could be a very serious problem decides it is appropriate to prepare a item 11a (or 11b) was not checked, for the surveyor. (Readers who have new description based on the results of www.alta.org > February 2016 > TitleNews 25 inside the industry

his or her survey, Section 6.B.ii. now Item 11 (utilities) has been a Former Table A Item 18 (evidence of requires a note explaining how the difficult item for surveyors since site use as a solid waste dump, sump or new description relates to the record day one and it continues to become sanitary landfill) has been eliminated. description (i.e., if it describes the same even more problematic over time. Such matters are properly the subject property and, if not, how it differs). Main concerns revolve around client of a Phase One Environmental Subsection 5.E.ii. requires a expectations, difficulty in getting Assessment, not a survey. summary of the plottable easements responses to one-call locate requests What had been Item 19(b) in and servitudes listed in Schedule and difficulty in obtaining plans. All the 2011 standards has also been B2 of the title commitment, and a of this revolves around the question of eliminated because it was determined statement as to whether or not each who is supposed to order all of that in that setting monuments on someone item is shown. This will help eliminate the first place. Keeping in mind that else’s property could be problematic unnecessary calls to surveyors from what was 11(a) in 2011 has, in 2016, and could constitute a trespass. reviewers of the survey who have been included in 5.E.iv., Item 11 now Item 20 now states that information trouble interpreting or finding certain only involves what had been 11(b)— related to professional liability items. If a Table A item has been what might be referred to as a “utility insurance shall not appear on the negotiated or qualified in a manner investigation.” face of the plat or map. This is in that differs from how it was spelled The responsibility for trying to response to those attorneys who have out in the standards, Section 6.D.g. obtain utility plans and for ordering sometimes made the outrageous requires an explanation. It also utility locate services now clearly lies demand that surveyors identify the requires that any additional Table A with the surveyor. However, there extent of their professional liability items negotiated with the client all is nothing whatsoever to prevent coverage on the face of the plat/map. be identified as item 21; if there are surveyors from qualifying or spelling multiple additional items, they shall be out what they will and will not do Summary identified as 21(a), 21(b), etc. in that regard in their contract (yet Each modification in the 2016 another reason to use a written standards has its own purpose. There Table A contract). Also, the wording in the are many more changes besides those Table A Item 6 now requires that a “Note” following Item 11 has been outlined above. Virtually every change report or letter containing the zoning modified and expanded to more will either directly or indirectly assist information that the client or lender accurately describe what surveyors surveyors, while importantly, not wants identified on the plat/map be may actually be able to accomplish diminishing the value of the product provided to the surveyor by the client. with regard to utilities. A similar note for the ultimate user—title insurers. This addresses the problem identified could—and probably should—be As has been the case ever since the after adoption of the 2011 standards part of the surveyor’s contract and author became involved with the whereby title companies were to should also appear on the face of the standards in 1988, the NSPS and provide this information, but—due plat or map with information related ALTA committees work closely to primarily to liability issues—they to the actual results of the specific maintain a standard that will result often declined to do so. Significantly, investigation. in surveys that meet the needs of Item 6(b) also relieves the surveyor One of the biggest problems that the title industry, while keeping from having to graphically depict came out of the 2011 standards was the requirements clear, realistic and setback lines if doing so requires the pervasive lack of understanding achievable for surveyors. n an interpretation on the part of the of Item 18 (wetlands) on the part of surveyor. clients, lenders and, to some extent, Gary Kent is director of Item 8 now includes “substantial surveyors. For 2016, this item now integrated services at areas of refuse,” which was necessary in says exactly what it should say (and Schneider Corp. and chair of exchange for the elimination of former what was intended in 2011), and the the ALTA Liaison Committee Table A Item 18 (“Observed evidence new wording should make it clear with the National Society of of site use as a solid waste dump, sump or that surveyors are not responsible for Professional Surveyors. He can be reached at sanitary landfill”). delineating wetlands. [email protected]. 26 TitleNews > February 2016 > www.alta.org Title Industry Assurance Company Risk Retention Group

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until all relevant information is OFAC Updates SDN and provided. (Note: Providing a service to an SDN would constitute a violation of OFAC-administered sanctions Blocked Persons List regulations. In order to ensure compliance with U.S. sanctions, real Title and Settlement Agents Should Scan List on estate settlement and title insurance Regular Basis to Ensure Compliance providers should consult the SDN list prior to providing any service that he U.S. Department of the a firm contacts the hotline, OFAC would benefit an SDN.) Treasury’s Office of Foreign recommends that it consider the When a title company is the Assets Control (OFAC) in following questions as part of a basic beneficiary of a wire, the sending T December updated its Specially due-diligence program: bank must obtain the additional Designated Nationals (SDNs) list • Is your software or data service information from the originator of to identify additional persons and provider only screening against the wire transfer. The sending bank entities with which U.S. citizens and the SDN list or list of targeted typically has a separate department permanent residents are prohibited countries? reviewing OFAC requests. The from doing business and whose assets • Evaluate the quality of your match: sending bank must then pass the or interests in assets must be frozen Do the names match in full, or do information to the receiving bank, if they come within the jurisdiction they simply entail a partial match of which must send the information of the U.S. Title and settlement very common names? Is the name of to its OFAC department for final agents are reminded they need to an individual matching against the approval before the wire can be be in compliance with requirements name of a vessel, company or other released or credited to an escrow against doing business with targeted non-individual? account. This could take two extra foreign countries, terrorists and others • How does the address/biographical days from the time the wire was first identified by OFAC. information of the party with whom flagged. OFAC’s update to the SDN list you are dealing compare to the When a settlement or title names 34 individuals and entities individual or entity on the SDN list? company is the originator of a wire, under Ukraine-related sanctions and If the address and/or biographical the company must pass additional authorities. To ensure compliance information matches, but there is information to the sending bank with OFAC’s regulations, industry some variation in name spelling, you upon request, which in turn will send professionals should scan customers should contact OFAC as foreign it to its OFAC department. After against the SDN list on a regular names may be transliterated into the OFAC review and approval, the basis. Exclusive to members, ALTA English in several different ways. bank will then pass the information provides a search interface to the • If there are a number of similarities to the receiving bank, which will also SDN list where members can log in or if you have reason to believe you send the information to its OFAC and search the list conveniently. have a valid match, contact OFAC’s department for approval and release. Many settlement and title agents Compliance Programs Division at This process can take up to two days are unsure how to proceed when 800-540-6322 for guidance. to complete, even if the flagged name their compliance software indicates a Once a wire is flagged for OFAC turns up as a false positive. n “match” against the SDN list. Before review, it can’t be cancelled or released 28 TitleNews > February 2016 > www.alta.org industry news

Former ALTA President Robert Dawson Passes Away FTC Consent Order Highlights Importance of Robert Dawson, who the finest Proper Email Encryption Standards served as ALTA’s 1973-74 men I have The Federal Trade of protection its software president, passed away Jan. known—a Commission (FTC) provided. The significant 5 at the age of 92. true recently issued a consent fine the FTC assessed Dawson started his gentleman, order against Henry for Schein’s deceptive career in the title industry who set Schein Practice Solutions, marketing correlates with in March 1955 when he high Inc., a software provider the type of data Schein joined the Florida legal standards in all he for dental practices, for was encrypting. department of Lawyers touched.” allegedly marketing its The primary lesson Title Insurance Corp. In “It was a privilege to software using deceptive that title insurance and 1957, he moved to Winter have worked for him—he assertions. The FTC settlement companies Haven, Fla., to work in the set a steady course of fined Schein $250,000 for should take from this company’s state office. He leadership and knew how alleged false marketing consent order is the was named Florida state to do the right things the advertisements related to importance of clearly and manager in 1963. right way,” added Foster, the level of encryption accurately identifying In 1968, Dawson was who served as ALTA’s the company provided to encryption methods. promoted to executive 1999-2000 president. protect patient health data. When marketing software vice president of Lawyers Roger Bell, ALTA’s Schein advertised that qualifications or security, Title and was elected to 1978-79 president, was its software provided it is better to be specific its Board of Directors and appointed to serve as industry-standard about what the software is Executive Committee. In chair of the association’s encryption methods capable of doing instead 1973, he was appointed Abstracter’s Section. He to protect sensitive of using puffery or broad president and CEO of didn’t have any direct patient information as statements. Implying that Lawyers Title and went contact with Dawson, but required by the Health the services meet certain on to lead the company knew him from attending Insurance Portability regulatory standards may for 17 years. Beloved and conventions and hearing and Accountability Act be seen as deceptive, as admired by employees him speak at meetings. (HIPPA). However, the Schein’s advertising was and agents nationwide, “He was certainly FTC alleged that Schein found by the FTC in this he brought the company impressive from that was aware that its software case. through a time of perspective,” Bell added. did not comport to the ALTA’s Best Practices tremendous change “He was smart, a real Advanced Encryption require that title insurance and growth in the title gentleman.” Standard, which the and settlement companies insurance industry. Shortly In addition to his National Institute of encrypt electronically after his retirement, involvement at ALTA, Standards and Technology transmitted non-public Lawyers Title was spun off Dawson served one term (NIST) recognizes as the personal information. by Universal Corp. to its as president of the Florida industry standard that The ALTA Best Practices shareholders as Lawyers Land Title Association. meets the regulatory data also require companies Title Corp. Dawson served in the encryption obligations to provide a copy of their Charlie Foster, who U.S. Navy during World under HIPPA. By failing privacy policy to customers was appointed CEO of War II and was in the first to meet the encryption and to alert customers if a Lawyers Title after the class to graduate from the standards identified by security breach occurs as spin-off, worked with Naval Aerial Navigation the NIST, Schein was required by law. For more Dawson for many years. School in 1945 in Clinton, found to have misled information. go to He called Dawson “one of Okla. patients about the level www.alta.org/bestpractices.

www.alta.org > February 2016 > TitleNews 29 industry news

Timios Approved to Conduct Business in Title Midwest Grows Footprint with Acquisition All California Counties Title Midwest Inc., a of these offices and are Timios Title, a The officers and directors Kansas-based company, fortunate to add these subsidiary of Timios of Timios Holdings has acquired the assets offices and employees to Inc., can now operate in Corp. will be the same as of the First American our growing operations,” every California county under Timios National Title Company offices in Stauffer said. “These following the approved Corp. As a result of the Independence, Erie and additions will enhance and expansion of its license merger, Timios National Lawrence, Kan., as well as strengthen our abilities to by the state’s department Corp. has been merged Richmond, Mo. serve our current customer of insurance. into Timios Holdings The Kansas offices will base in each of these areas “We are excited for the Corp. and is no longer a operate as part of Kansas and allow Kansas Secured new expansion of our publicly traded company. Secured Title and Abstract Title and Missouri license, and continuing to “We have been working Company. The Richmond Secured Title to continue build on the foundation for over a year on office will become a part providing the excellent of our California heritage simplifying our corporate of Missouri Secured Title, service its customers are that dates back over structure, while at the according to John Stauffer, accustomed to.” 125 years,” said Richard same time strengthening CEO of Title Midwest. Title Midwest, Inc. Thomas, president of our financial position,” Current employees of has 52 office locations Timios Title. said Trevor Stoffer, CEO the acquired offices will in Kansas, Missouri, Meanwhile, Timios of Timios Holdings. “We become employees of the Minnesota, Nebraska National Corp. set some big goals at the respective state companies. and Texas, with major completed a merger into start of 2015 and the “We are pleased First stockholders residing in Timios Holdings Corp., management team has American Title Company Topeka, Lawrence and a privately held company. delivered on all of them.” has chosen Title Midwest Kansas City. to be a suitable purchaser Simplifile Expands E-recording in the Midwest Conestoga Title Names HA&W as Trusted Partner Simplifile’s electronic • Crawford County, Ind. for ALTA Best Practices Compliance recording service is • Franklin County, Ind. Conestoga Title Conestoga sought now available in eight • Wexford County, Mich. Insurance Co. will offer third-party compliance more Midwest counties, • Isanti County, Minn. its title agents cost- partners that too have a providing settlement • Wood County, Ohio effective benchmarking, long history of providing agents with the ability • Forest County, Wis. testing and reporting high-quality, personalized to quickly and more In addition to these options to ALTA’s “Title service to clients,” cost effectively record counties, Simplifile Insurance and Settlement said John Nikolaus, documents with counties customers can now Company Best Practices” president of Conestoga via the Internet. The e-record in more through HA&W’s Title. “HA&W’s available counties in the than 1,351 recording ComplianceSuccess ComplianceSuccess Midwest region include: jurisdictions across the Program. The program Program offers our • DeWitt County, Ill. nation. offers independent clients some of the most • Brown County, Ind. third-party attestation sophisticated and effective using CPA professional tools available today to standards. ensure compliance with ”As an established ALTA Best Practices.” name in the title industry,

30 TitleNews > February 2016 > www.alta.org

tipac contributors

Diamond Club Level • $5,000 Emerald Club Level • $4,999-$2,500 Phillip Sholar Christopher Abbinante Suzanne Basiago First American Title Insurance Company (Retired) Fidelity National Title Group Midland Title Sally Tyler Justin Ailes Patrick Beall First American Title Insurance Company American Land Title Association Stewart Title Guaranty Company John Voso Mark Bilbrey Hershel Beard Old Republic National Title Insurance Company Old Republic National Title Insurance Company Marshall County Abstract Evan Zanic Bill Burding Karen Brown First American Title Insurance Company Orange Coast Title Boone-Central Title Agency Platinum Club Level • $2,499-$1,000 Rob Chapman Robert Burgess Old Republic National Title Insurance Company Chicago Title Insurance Company Kenneth Aalseth First American Title Insurance Company Steven Day Diane Calloway Fidelity National Title Group Specialized Title Services, Inc. Anne Anastasi Genesis Abstract, LLC Pam Day Cara Detring Day Title Services Preferred Land Title, LLC Dennis Anderson First Dakota Title Diane Evans Tim Evans Land Title Guarantee Company Evans Title Agency Marty Askins Stephens County Abstract Co. John Freyer John Freyer, Jr. Land Title Guarantee Company Land Title Guarantee Company Joseph Attura First American Title Insurance Company Dennis Gilmore Brian Hamilton First American Title Insurance Company Land Title Guarantee Company Paula Bachmeier North Dakota Guaranty & Title Dean Hoag Jr. Roger Jewkes The Title Resource Network Fidelity National Financial Group Matthew Ballard First American Title Insurance Company John Hollenbeck Patrick John First American Title Insurance Company TrasCounty Title Agency Jeffrey Bates D. Bello Associates Parker Kennedy Beverly Jones First American Title Insurance Company Grand River Abstract & Title Co. Peter Birnbaum Attorneys’ Title Guaranty Fund Michelle Korsmo Cindy Koebele American Land Title Association TitleSmart Cynthia Blair Blair Cato Pickren Casterline, LLC Chris Leavell Greg Kosin First American Title Insurance Company Greater Illinois Title Company Robert Blessman Attorneys’ Title Guaranty Fund Larry M. Matney Linda Larson Futura Title Old Republic National Title Insurance Company Jeff Bluhm Old Republic National Title Insurance Company Erika Meinhardt John Magness Fidelity National Title Group Old Republic National Title Insurance Company Randall Bradley Placer Title Company Bill Peirson John Marconi PeirsonPatterson, LLP Orange Coast Title Michael Brandner Garvey Abstract & Title Frank Pellegrini Daniel Mennenoh Prairie Title H.B. Wilkinson Title Company Coleman Bryars Alabama Land Title Company, Inc. Maureen Pfaff Matt Morris Olympic Peninsula Title Stewart Title Guaranty Company Frank Bush Thomas Title & Escrow Brian Pitman Stewart Morris, Jr. Independence Title Stewart Title Guaranty Company Richard Cannan Fidelity National Title Group Randy Quirk Keith Newlon Fidelity National Financial Pioneer Title Agency Shonna Cardello White Rose Settlement Services Richard Reass Cynthia Newlon RynohLive Pioneer Title Agency Curt Caspersen First American Title Insurance Company William B. Vollbracht Michael Nolan Land Title Guarantee Company Fidelity National Financial Marcy Connelly Titleclose.com Mary O’Donnell Westcor Land Title Insurance Company Cheryl Cox Titleclose.com

32 TitleNews > February 2016 > www.alta.org tipac contributors

Dan Fowler Brent Laliberte Randy Pittman Near North Title Group Bayou Title, Inc. West Texas Abstract & Title Company Yvonne Deardorff Sherri Landauer Joe Powell Lakeside Title Company Lakeside Title Company Fidelity National Title Group Morris H. Erickson Randy Lee Diane Priola Monroe County Land Title Stewart Title Guaranty Company Counsel Abstract, Inc. Celia Flowers Jeanette Liesen Andree Ranft East Texas Title Company 1st Service Title & Closing First American Title Insurance Company Michael Fromhold Benjamin Lincoln Jack Rattikin III First American Title Insurance Company American Land Title Association Rattikin Title Company Tommye Frost George Livermore Tom R ichardson Orange Coast Title First American Title Insurance Company Liberty Title Agency Joseph Ghilardi Ted Lovec Jack Robichaux First American Title Insurance Company American Title & Escrow IronClad Title, LLC Michael Glass Richard Macaluso W. Gary Robison First American Title Insurance Company Orange Coast Title Land Title Guarantee Company Larry Godec Kenneth Mackay Mark Rutherford First American Title Insurance Company First American Title Insurance Company First American Title Insurance Company Steve Gottheim Andy Maloney Peter Sadowski American Land Title Association Nashville Title Insurance Corporation Fidelity National Financial Mark Greek Michael Maniche Brent Scheer First American Title Insurance Company Guardian Title & Guaranty Agency Agents National Title Insurance Company Jeffrey Green Jill Marshall Mary Schuster Knight Barry Title, Inc. Columbia Title, Inc. RamQuest Rich Griffin Marianne Mathieu Randall Scott North American Title Insurance Company Fidelity National Title Group First American Title Insurance Company Peter Griffiths Link Maxwell Deborah Scroggins Land Title Guarantee Company First American Title Insurance Company First American Title Insurance Company Nick Hacker Matt McBride Randle Shoemaker North Dakota Guaranty & Title Continental Title Company Fidelity National Financial Paul Hammann Frank McCormick Michael Skalka First American Title Insurance Company Fidelity National Title Old Republic National Title Insurance Company Blake Hanby Jeffrey McEvoy DeAnna Stancanelli City Title & Closing Home Surety Title National Granite Title Insurance Agency Craig Haskins Donald McFadden Kirk Sterling Knight Barry Title, Inc. McFadden & Freeburg, LPA Old Republic National Title Insurance Company Patrick Hempen William Miller Jr. Brad Stratton SoftPro Land Title Company of Alabama American Land Title Company of MT David Horne Carolyn Monroe Arnold (Skip) Straus Self-Employed Old Republic National Title Insurance Company Enterprise Title, Inc. Carolyn Hoyer Malcolm Morris Quinn Stufflebeam Wisconsin Title Services Stewart Title Guaranty Company Title Financial Corp. Rod Ives Donald Ogden KC Tong First American Title Insurance Company First American Title Insurance Company KCT Abstract, LLC Todd Jones Joanna Patilis David Townsend First American Title Insurance Company Fidelity National Title Insurance Company Agents National Title Insurance Company William Kahalley Richard Patterson Larr y Tuliszewsk i Surety Land Title, Inc. Connecticut Attorneys Title Insurance Company Fidelity National Title Group Ross Keller Bill Perry Mark Turner Traill County Abstract & Title First American Title Insurance Company Fidelity National Title Group John Killea Kurt Pfotenhauer Gary Urquhart Stewart Title Guaranty Company First American Title Insurance Company Fidelity National Title Group John LaJoie Lawrence S. Pierce Herb Walton First American Title Insurance Company Old Republic National Title Insurance Company Old Republic National Title Insurance Company

www.alta.org > February 2016 > TitleNews 33 tipac contributors

Theodore Werner Scott Chandler Cindy Fried Fidelity National Title Group Westcor Land Title Insurance Company Fidelity National Title Group Greg Wick Gregory Chaparro Kevin Gartland Pennington Title Company First American Title Insurance Company All American Title Richard A. Wilson Sheffield Chuck Thomas Gates Old Republic National Title Insurance Company AmeriTitle First American Title Insurance Company Tony Winczewski Glenn Clements Michael Genest Commercial Title Partners, LLC Stewart Title Guaranty Company Lawyers Title Monica Wittrock Robert Cohen Adeline Gibson First American Title Insurance Company Fidelity National Title Group Fidelity National Title Group Rande Yeager Mark Comstock Jerry Gorman Old Republic National Title Insurance Company Fidelity National Title Group Attorneys’ Title Guaranty Fund Arizona Land Title Association PAC Pat Connor William C. Gowen Wisconsin LTA PAC Old Republic National Title Insurance Company Helena Abstract and Title Co Thomas Cullen Linda Grahovec Nebraska Land Title Association Attorneys’ Title Guaranty Fund Fidelity National Title Group Gold Club Level • $999-$500 Michael Cusack Brandon Grajewski Chicago Title Insurance Company First American Title Insurance Company Andrew Acker D. Bello Associates Maureen Dalton Charlie Gray Monarch Title Company Surety Land Title Ellen Albrecht First American Title Insurance Company David Cronenbold John Green Lawyers Title Retired Kathy J. Austen Fidelity National Title Group Larry Davidson Robert Grubb First American Title Insurance Company Alliant National Title Ravi Bapodra Fidelity National Title Group Larry Deal Kevin Gugenheim First American Title Insurance Company Fidelity National Title Group David Baum Fidelity National Title Group Richard Diamond Melissa Hall Fidelity National Title Group Fidelity National Title Group Doug Bello D. Bello Associates Ralph DiDomenico Margo Hannum Fidelity National Title Group First American Title Insurance Company Allen Berryman Stewart Title Guaranty Company Vicki DiPasquale Dean Harisis Simplifile First American Title Insurance Company Catheen Bilbrey Spouse Trey Dittman Marc Herskowitz Frontier Title Infinity Land Services, LLC Kristina Bolton Fidelity National Title Group Andrew Drake DeeAnna Herwig Arsenal Insurance Corporation Land Title Guarantee Company Albert Boyce Old Republic National Title Insurance Company David Dunbar Michael Holden Meridian Title Corp. North American Title Insurance Company Rawlins Brenda First American Title Insurance Company Mary Pat Dunleavy Michael Holt Fidelity National Title Group First American Title Insurance Company Steve Buckman BuckmanLegal, PLLC Justin Earley Cornelia Horner First American Title Insurance Company American Land Title Association Mark Budzinski Old Republic National Title Insurance Company Ric Eborall George Houghton Alliance Title & Escrow Stewart Title Guaranty Company Jack Burgeson Acquest Title Services John Gil Ernst David Huffman Fidelity National Financial Attorneys’ Title Guaranty Fund Karen Burnette First Title & Abstract Wendy Ethen Tron Huynh Guaranty Commercial Title , Inc. Fidelity National Title Group Edson Burton, Jr. Chicago Title Insurance Company Philip Fanning Robert J. Ibler Fidelity National Title Group Chicago Title National Business August Butera Attorneys’ Title Guaranty Fund Christian Feigle Richard Icklan First American Title Insurance Company Old Republic Don Cantral NextAce Curtis Fix Cindy Immonen Yuma County Abstract Co. Fidelity National Title Insurance Company

34 TitleNews > February 2016 > www.alta.org tipac contributors

Michele Jorgensen John O’Brien Robert Soule Fidelity National Title Group Attorneys’ Title Guaranty Fund Fidelity National Title Group Weiland Joyce John Obzud Christine Sparks SoftPro Fidelity National Title Group Attorneys’ Title Guaranty Fund Tim Kemp Gregory Oliver Chris St. John Locke Lord, LLP Chicago Title Insurance Company Lawyers Title of Topeka Carol Kirby Margaret Redman John Stauffer American Title & Escrow First American Title Insurance Company Title Midwest Nicholas Koester Joe A. Reinhardt Bryan Steckler Chicago Title Insurance Company Fidelity National Title Group Fidelity National Title Group Jan Koski Hogan Patrick Rhodin Mona Stevens Fidelity National Title Insurance Company Fidelity National Title Group Attorneys’ Title Guaranty Fund Mitchell C. Lafleur Fred Roediger Scott Stevenson First American Title Company of South Heritage Title Company of McHenry Northwest Title Family Dakota Billy Roehrenbeck Shelley Stewart James Lamphere Pulaski County Abstract Company Southern Title Holding Company HomeServices of America Jeffrey Rogers Mark Till Marsha Laner First American Title Insurance Company Fidelity National Financial Stewart Title Guaranty Company Ted Rogers Carolyn Toigo Chris Lieser The Security Title Guarantee Corp. of Dominion Title, LLC Old Republic National Title Insurance Company Baltimore Ronald Trubiana Mary Lucero Kelly Romeo Attorneys’ Title Guaranty Fund Lawyers Title American Land Title Association Toby Tul ly Kelly Malcolm Michael Rubin Fidelity National Title Group Lewis & Clark Title Knight Barry Title, Inc. Sal Turano Cindy Malone Jim Russick Abstracts Inc. Chicago Title Insurance Company Old Republic National Title Insurance Company Adrienne Verdone Claire Manning Elizabeth Russo Commonwealth Land & Chicago Title Chicago Title Insurance Company MCP Title Services Company Cynthia Martin Michael Russo, Jr. Ross Wagner First American Title Insurance Company Council, Baradel, Kosmerl & Nolan, PA Fidelity National Title Group Ken McBride Jody Schimek Kevin Wall Capitol Abstract Alexandria Title Company First American Title Insurance Company P. Kim McConkey Sandra Schoen Janette Waller P. Kim McConkey Old Republic National Title Insurance Company First American Title Insurance Company Mardy McCullough Michael Schuh Philip Webb McCullough & Associates Stallard & Schuh, Inc. First American Title Insurance Company Will McLain Dianna Serio Richard Welshons Quadras Corporation First American Title Insurance Company DCA Title Marybeth Meyers Buzz Shepard David Welshons Fidelity National Title Group Fidelity National Title Group DCA Title Jim Milinkovich Sharlene Shineldecker Jeffrey Wiener First American Title Insurance Company Transnation Title Agency of Michigan Old Republic National Title Insurance Company Theresa Miller Henry Shulruff Arthur Wilkins H.B. Wilkinson Title Company Attorneys’ Title Guaranty Fund Attorneys’ Title Guaranty Fund Arden Miner James Sibley Robert Wineman Attorneys’ Title Guaranty Fund Title Data, Inc. Fidelity National Title Group Terrance Monnie James Sindoni Mark Winter Terrance Monnie Title Co. Fidelity National Title Group Stewart Title Guaranty Company Michael Moore Jim Smyithe John Wunderlich Attorneys’ Title Guaranty Fund Sathre Title & Abstract Fidelity National Title Group Hughes Nancy Dana Solms Ohio Land Title Association PAC Jackson Hole Title & Escrow Old Republic National Title Insurance Company Jeffrey Noble Jason Somers Old Republic National Title Insurance Company Fidelity National Title Group

www.alta.org > February 2016 > TitleNews 35 tipac contributors

Silver Club Level • $499-$250 Sue Cosgriff Woody Girion Michael Abbey Red River Title Services Fidelity National Financial, Inc. First American Title Insurance Company Cheryl Cowherd Leslie Godec Ralph Anderson Agents National Title Insurance Company First American Title Insurance Company A.M. Anderson Abstract Company Julie Curlen James Graham Jeffrey Anderson Stewart Title Guaranty Company Ottawa County Abstract & Title First Dakota Title Patrick Curry Shaul Greenwald Michael Anthony WACO Title Riverside Abstract, LLC South Bay Title Insurance Agency Francine D’Elia Wirsching Gerard Griesser Dave Ard Community First Abstract Trident Land Transfer First American Title Insurance Company Elizabeth Daniel Arlene Griffith Marvin Bagwell Continental Title Company Knox Title Agency Old Republic National Title Insurance Company Brian Danis Chris Gulotta Sangeeta Banerjee First American Title Insurance Company Real Estate Data Shield Fidelity National Title Group Joseph Desalvo Nancy Gusman Marjorie Bardwell First American Title Insurance Company Brick House Title, LLC Fidelity National Title Group Stephen Dinsmore Michael Haltman Anna Batten Stewart Title Guaranty Company Hallmark Abstract Service, LLC Chicago Title Insurance Company Michael Doting James Harper Mathew Beall First American Title Insurance Company PFA, Inc. First American Title Insurance Company Michael Dulin Evan Harris Brett Beckett First American Title Insurance Company Homestead Title Elliott & Waldron Title Roy Elliston John Haviland Patricia Beckner First American Title Insurance Company South Ridge Abstract & Title Company Tri-County Title & Escrow Richard Estrella Chaney Haynes Sandra Bell Fidelity National Title Group Old Republic National Title Insurance Coma First American Title Insurance Company Nancy Farrell Martin Henschel Kurt Blass Venture Title Agency, Inc. Edina Realty Title Stewart Title Guaranty Company Beau Fast Mark Higdon Christopher Bobo Lenders Title Company Mississippi Valley Title Insurance Co. Alabama Land Services, Inc. Ted Faust Lynn Hightower-Moore Patti Bonner Stewart Title Guaranty Company Common Bond Title, LLC Stewart Title Guaranty Company Dan Fazendin Nicole Hoff Don Booher Minnetonka Title Cole County Abstract & Title Company Colorado Escrow & Title David Feldman John Holt Jeffrey Bosse First American Title Insurance Company Old Republic Title Insurance Company Bosse Title Corporation Kevin Fiet Alex Horowitz Doug Brigham Fidelity National Title Group TitleOne Corporation Harry Finch Thomas Howell Dan Buchanan Grant County Abstract Co. McCalla Raymer First American Title Insurance Company David Floyd Fran Iverson Kristina Burns SKLD Title Services Chicago Title Insurance Company First American Title Insurance Company Thomas Flynn Kenneth Jannen Commonwealth Land & Chicago Title First American Title Insurance Company James Butscher Company First American Title Insurance Company Susan R. Jones Laura E. Fox Royal Title Services Maritoni Carlos Fidelity National Title Group Fidelity National Title Group Fred Jones Andy Freeman Old Republic National Title Insurance Company Rafael Castellanos Bottineau County Abstract Expert Title Insurance Agency Cheryl Jones Sheryl Fuller Old Republic National Title Insurance Mo Choumil First American Title Insurance Company ATG Title Joanna Jones Alison Gareffa Fidelity National Title Jason Chun Old Republic National Title Insurance Company First American Title Insurance Company Danielle Kaiser Lane Gidney Agents National Title Insurance Company Cathy Cook Equity Title Agency Community First Title Brandt Keefe Stewart Title Guaranty Company 36 TitleNews > February 2016 > www.alta.org tipac contributors

Donna Kogut Gilbert Newkerk Joe Shepherd Donna Galiardo Kogut, Attorney Fidelity National Financial Fidelity National Title Group Michael Koors Amy Niesen Rob Sherman First American Title Insurance Company Land Title Company of Alabama First American Title Insurance Company Mark Ladd Edward Oddo Wayne Shupe Simplifile First American Title Insurance Company Old Republic National Title Insurance Company Lee LaGraize Ronald Owen Bob Sink Fidelity National Title Group Fidelity National Title First American Title Insurance Company Nancy Landmark Craig Page Nicole Skalka Commercial Partners California Land Title Association Old Republic National Title Insurance Company Michael Lane John Pagliarini Donna Snider PAMS, Inc. John Pagliarini, Esq. First American Title Insurance Company Darlene Lane Victor Pajonas Judi Souza PAMS, Inc. Fidelity National Title Group Escrow Expertise Paul Langner David Park Paul Spano Douglas County Abstract Company SoftPro Spano Abstract Service Corp James Lanzetta Rand Peterson Michael Stogdill Stewart Title Guaranty Company Land Title Guarantee Company First American Title Insurance Company David Lawson Kevin Reilly Brian Stone Fidelity National Title Group First American Title Insurance Company Alliance Title & Escrow David Litten Mark Reyner Curt Szymanski Agents National Title Insurance Company Land Title Guarantee Company Windward Consulting Mark Lotterer Lori Rice Justin Tanner Chicago Title Insurance Company First American Title Insurance Company ANTIC Derek Lynch Marvin Ripp Joe Tavarez Jr. Fidelity National Title Group First American Title Insurance Company First American Title Insurance Company Sarah Maddox Sutton Dominicana N. Roberts William Treuber Fidelity National Title Group Fidelity National Title New York Metro Title Agency Mo Manassaram Linda Rose Mark Vasington Fidelity National Title Group First American Title Insurance Company First American Title Insurance Company John McCarthy Alma Rushing Robert Vavrock First American Title Insurance Company Orange Coast Title First American Title Insurance Company Sally McCash Michael Savas Brett Waterman Joseph, Greenwald and Laake, PA First American Title Insurance Company First American Title Insurance Company Maureen McElligott Eric Schibi Tracey Webb Fidelity National Financial Field Abstract & Title Frazier & Deeter, LLC Jessica McEwen Tom Schlesinger Mark Webber American Land Title Association First American Title Insurance Company First American Title Insurance Company Cameron McFaddan Barbara Schlieve Jeffrey Weber TitleOne Corporation Assurance Title Services, Inc. First American Title Insurance Company Bryan McGahan Erin Schmitz Phillip Wert Fidelity National Title Group North Dakota Guaranty & Title First American Title Insurance Company Yvette Meldrum Donna Schmulbach Vicki White Mid-State Title & Escrow First American Title & Trust Co. TitleOne Corporation Leslie Midgley G. Barry Schmulbach Laura Wild Texas Land Title Association Stewart Title Guaranty Company First American Title Insurance Company Sandra Miller Shari Schneider Deborah Wiley Chicago Title Insurance Company Stewart Title Guaranty Company First American Title Insurance Company Jeffrey Moyer Roberta Schneider Dan Wold First American Title Insurance Company Fidelity National Title Group Old Republic National Title Insurance Company Phyllis Mulder Eric Schneider Ronald Wood Alliant National Title Lakeside Title Company Fidelity National Title Group Ferguson Nancy Mike Sellari Brooks Yeager Fidelity National Title Group Old Republic National Title Insurance RamQuest Mary Ann Nelson-Sutterfield Ronnie Semlak Stewart Abstract Burnet Title www.alta.org > February 2016 > TitleNews 37 the last word

A Week in D.C. Working for You o say that ALTA got a running start to 2016 would be an understatement. Your association’s leadership is focused on setting the pace for the year to protect the industry on several fronts. Little time was wasted as we got down T to business shortly after the new year. On Jan. 12, ALTA’s Board of Governors met with Richard Cordray, the director of the Consumer Financial Protection Bureau, to discuss Know Before You Owe implementation and lender third-party oversight. Cordray, acknowledging that implementation was more difficult than he expected, was receptive to feedback on how the industry is adjusting to the new mortgage disclosures and closing process. We encouraged CFPB to provide public guidance, which we believe will accelerate implementation for all concerned. He seemed open to this idea, and ALTA is drafting a set of questions we can provide to the CFPB. During the meeting, we also discussed that the required disclosure of title premiums is confusing to consumers. We asked if the CFPB would consider additional comments to make this more workable for consumers and industry. The conversation about third-party management was particularly engaging. We reminded him of the bureau’s 2012 bulletin that reminds lenders they are liable for the violations of federal consumer financial laws by its third-party providers. We made the point—very clearly, in my view—that no consensus exists among lenders in regard to the steps a lender must take in order to meet its third-party oversight responsibilities. Everyone involved in the mortgage process needs to know what is required. We urged Cordray to provide more guidance, and asked him to think about whether ALTA Best Practices can play a role. We also met with staff from the U.S. Department of the Treasury’s Financial Crimes Enforcement Network to share concerns about the Treasury’s Geographic Targeting Orders requiring several title insurance underwriters to identify the names of 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. You can read more about the order in this edition’s cover article. Other meetings were held to help set the stage for 2016. ALTA Immediate Past President Diane Evans convened the newly formed ALTA Best Practices Executive Committee of the Best Practices Task Force. It is part of the new Best Practices governance structure. The committee is focused on ensuring the Best Practices are responsive to industry needs and remain a permanent part of the future landscape. Leaders of ALTA’s TIPAC Committee also met in D.C. to discuss 2016 goals. Last year, TIPAC raised record-breaking contributions of $475,000. Thank you to all who contributed. The week closed with several meetings with congressional staff members to continue the discussion about Know Before You Owe implementation and other industry concerns. These were important meetings to reinforce the industry’s commitment to serve as a resource to Congress. It’s nearly the start of state convention season. In fact, I spoke at the Alaska convention earlier this month. I hope to see you in March for ALTA’s Business Strategies Conference or on the road sometime soon so I can personally share how ALTA is working for you.

—— John Hollenbeck NTP, ALTA president

38 TitleNews > February 2016 > www.alta.org RAMQUEST CUSTOMERS EXPERIENCE A CLEAR PATH TO SUCESS

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There’s a new closing Registration is now open process, new lender for ALTA’s 2016 Social requirements and an Media Summit, which will onslaught of new cyber attacks. Register for ALTA’s be held March 16. Attend 2016 Business Strategies Conference, which will be this day-long education summit to learn from several held March 16-18, to get answers to today’s complex digital experts in and outside of the title insurance issues and make strategic connections that can help industry! Register for both conferences and save! you compete in a volatile business climate. meetings.alta.org/bsc meetings.alta.org/sms