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October 2014

Title Notes E-Blast

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Welcome to the October edition of the VTC e-news.

The last 30 days have been busy for the VTC team in many ways. We are pleased to report that the number of new title and settlement orders has been consistently climbing. We trust this means you are also seeing positive trends in new business opportunities.

Recent weeks have provided numerous new business development activities for the team as well. We have traveled throughout the state to sponsor and participate in a multitude of local, regional, and state industry-related functions to include the VMLA Annual Convention, the VBA Credit Management Conference, and the VAR Convention & Expo.

Our travels have been highlighted with spending time with many familiar faces, meeting new ones, and gaining up-to-date knowledge on this ever-changing industry in order to better serve you.

As always, we enjoy hearing your feedback regarding the value of the content of our newsletters, and suggestions for future editions.

On behalf of the entire Virginia Title Center Team we appreciate your continued support and confidence in us as we deliver on our promise of: Integrity. Security. Excellence.

Patti Dickerson, Director of Marketing & Communications

Bold Regulatory Reforms Can Help Small Banks Survive

Mike Crapo is the ranking member of the United States Senate Committee on Banking, Housing, and Urban Affairs and the senior senator from Idaho.

by Mike Crapo for American Banker

Crushed under an ever-increasing regulatory burden, community banks are disappearing from America's financial landscape. Legislators are aware of this issue: at a recent Senate Banking Committee hearing on the state of small financial institutions, senators expressed wide bipartisan support for creating a regulatory environment in which traditional lending can thrive in all communities. Federal banking regulators say they are already taking significant steps toward achieving this goal. While the hearing sent an encouraging message about the future of community banks, only follow-through can make these undertakings meaningful.

The number of banks in the United States has sunk to its lowest level since the Great Depression. We have lost more than 3,000 small banks and more than one-half of credit unions since 1990. In fact, 85% of banks with less than $100 million in assets disappeared between 1985 and 2013. The vast majority of those small banks did not fail. On the contrary: the rates of failure, voluntary closure and overall attrition were lower for these institutions than any other size group, according to a recent report from the Federal Deposit Insurance Corp. Not only is the nation losing small banks, our regulatory framework is discouraging the creation of new ones. Only two de novofederal banking charters have been approved since 2009.

A frank discussion about what regulatory burdens mean for financial institutions and the communities they serve is long overdue. The Dodd-Frank Act required approximately 400 new rules to be written and approved by federal financial regulators. With slightly more than 50% of these rulemakings finalized, we still have no idea what the cumulative cost of Dodd-Frank will be.

However, it is already clear that these new regulations require banks to expand their staff and hire many lawyers, resulting in compliance costs that few small institutions can absorb. Institutions are faced with a choice: shift resources around to accommodate regulatory compliance, or pass the compliance cost on to consumers. Whether the bank decides to close a local branch or stop offering free checking accounts, consumers lose in either scenario. Continue reading...

Have Community Banks Changed Enough?

by John Siracusa

I recently came across a 2002 report, The Role of Community Banks in the U.S. Economy (available as PDF here), and thought it would be interesting to explore how much things have changed over the past 12 years.

Community banks, as defined here by the Federal Reserve of Kansas City, "are small in size, and they do most of their business in the community in which they are located." The report chose to define 'small' as banks with less than $1 billion in total banking assets.

In 2002, there were 6,936 such banks in the United States. According to the FDIC, there are now 5,954, or just over a 14% decline.

But time tells the larger story. Here's what happened before .... continue reading...

John Siracusa helps banks build highly effective social media programs. A popular industry speaker, he helps banks not only connect with customers, but also with their community at large.

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Here are a few more articles on Banking and Banking Trends you may also enjoy:

FOUR VTC TEAMMATES RECOGNIZED FOR MILESTONE ANNIVERSARIES

L to R: Gail Duffy, Laura Lesando, Vicki Tyree, Brandy Wimer

Four Virginia Title Center teammates were recently recognized for milestone anniversaries during an off-site meeting with VBA multi-bank title agency peers . Karen DesRoches, SVP of the Virginia Bankers Association Management Services Inc., facilitated the full day meeting with teammates from Bankers Title, Bankers Title Shenandoah, West Virginia Bankers Title, and Virginia Title Center in attendance.

Congratulations and thank you for your continued dedication to VTC, our member banks and clients:

Gail Duffy, Operations Manager & Title Underwriter - 5 years
Laura Lesando, Title Underwriter - 20 years
Vicki Tyree, Office Assistant and Search Coordinator - 5 years
Brandy Wimer, Settlement Services Manager - 5 years

Click HERE to learn more about the entire Virginia Title Center Team!

Mel Watt and Julian Castro Announce Housing Policy Changes

MBA calls the policy changes "extremely positive"
by Sarah Wheeler for Housingwire

Federal Housing Finance Agency Director Met Watt and U.S. Secretary of Housing and Urban DevelopmentJulian Castro announced their plans to address some of the housing finance industry pain points in what MBA CEO David Stevens called "extremely positive" policy steps.

Speaking at the Mortgage Bankers Association Annual Convention & Expo on Monday, Watt and Castro outlined changes that would reduce confusion and risks for lenders.

"We know that access to credit remains tight for many borrowers, and we are also working to address this issue in a responsible and thoughtful manner," Watt said. "Additionally, FHFA continues to evaluate ways to refine and improve the loss mitigation and foreclosure prevention policies at the Enterprises, because we understand that many individuals and families are still facing the possibility of foreclosure and are looking for alternatives to stay in their homes."

Watt said that the FHFA was clarifying the Representations and Warranty Framework to help reduce repurchases.Continue reading...

CFPB Releases Updated Rules Readiness Guide
New guide includes TILA-RESPA Integrated Disclosure rule

by Sarah Wheeler for Housingwire

The Consumer Financial Protection Bureau has released an updated rules Readiness Guide that includes the TILA-RESPA Integrated Disclosure. Find the Readiness Guide here.

"This update offers financial institutions and other industry participants valuable guidance on how to evaluate their readiness for complying with the mortgage rule changes," the bureau said in a press release.

The updated guide addresses changes made to Regulation Z, which implements regulation for the Truth in Lending Act (TILA), and Regulation X, which covers the Real Estate Settlement Procedures Act (RESPA).

The release is a welcome one for lenders and compliance firms, who have been struggling to interpret some of the CFPB's rules ahead of the implementation date next August.

"Obviously there is a lot of fear, uncertainty and doubt in the industry with the TILA-RESPA ruling beginning to dominate conversations, and there is no doubt Aug. 1, 2015 is going to happen," said Mark McElroy, president and CEO of Pavaso, one of the companies chosen by the CFPB for their eClosing pilot program. "I believe everyone needs to explore the solutions that have taken into account every nuance of the ruling and the business impacts now."

TITLE TIP - Quitclaim Deeds 101: What You Need to Know About These Property Transfer Documents

by Michael Dubrow

The vast majority of real property deeds are warranty deeds, which warrant-or assure-that no one else can register a claim on the given property. The title search and title insurance requirements for mortgage transactions provide verification for this claim.

However, an alternate type of deed known as a quitclaim deed provides no warranty of any sort. The quitclaim deed is a transfer of any interest in the property to another person without warranty, thus earning these deeds the nickname "deed of release". Of course, there is an assumption that the seller of the property actually owns the property and has clear title-but there is no mechanism that guarantees it.

In cases like this, there is no sale (exchange of funds) and no corresponding title search and title insurance. Why would anyone want to do this? There are several logical reasons (as well as a few bad ones).

►Living Trust: Transferring property to a living trust is one reason - you already know the claim history and have the information from the previous title search and insurance when you purchased the home. You can use the same strategy to move properties into an LLC, S-Corp, or similar entity, but the risk of a claim is increased in those cases.

►Transfer Within a Family: Quitclaim deeds are sometimes used to transfer ownership of a home within a family without money changing hands.

►Clearing a Title: Situations where there is an issue with a title, such as the aftereffects of divorce proceedings, may require a quitclaim deed to clear the title of any potential claim before a sale can proceed. Another example is a loan that was paid-off but not properly released by the lender.

►Government Transfer: In cases where a property is foreclosed and sold by the government to recover unpaid taxes, the buyer receives a quitclaim deed. Essentially, the government is only caretaking the property in the short term-it is up to the buyer to investigate and clear any title issues associated with the auctioned property.

►Mutual Consent in Divorce: Occasionally, one party to a divorce releases interest in a given property that was previously owned by the couple. This typically occurs as part of the broader agreement to distribute community property (i.e., one party might keep the main home and one might keep the vacation home). In such cases, quitclaims are executed as elements of the broader divorce agreement. Continue reading...

Michael Dubrow is a serial entrepreneur who has co-founded numerous successful businesses. As a principal at MoneyTips.com, he's responsible for the personal financial community's content strategy. Michael also provides strategic, marketing and business development consulting to Estalea's portfolio companies.

More Than 80 Percent of U.S. Homeowners Have Regrets About Their Purchase

from National Mortgage Professional

Finding the right-size home in the perfect location, with good schools, friendly neighborhoods, low maintenance costs and at the right price is hard, as 80 percent of Americans have at least one regret about their home purchase, according to new data from HSH.com. The survey shows that not only do Americans think that their homes are too small, but that many wish they had done more research before purchasing.

Here are the top-five regrets and the percentage of respondents who said it was their biggest disappointment:

►House is too small: 15.5 percent

►Lack of storage/closets: 9.2 percent
►Neighbors: 8.35 percent
►Not enough bathrooms: 8.2 percent
►Poor school system: 7.15 percent

"Compromise is often key in successfully buying a house," said Keith Gumbinger, vice president of HSH.com "Over time, though, some compromises can turn into annoyances and even regrets. In some cases, changes can be made to smooth out the rough edges via home improvements and such, or a homeowner can learn to live with these shortcomings. In others, curing these irritants may require a full rethinking of the decision to buy a given home in a given location, and a move to another home may be in order. If this becomes the choice, it's a good thing that mortgage rates and home prices are still favorable, as this helps to keep the costs of getting a more suitable home manageable."

While many of the 2,000 respondents said they did their homework on these issues, these are the large percentages who regret not researching the following:

►Sex offender registries: 30.10 percent

►Neighborhood/neighbors: 25.95 percent

►Home insurance cost: 21.9 percent

►Property taxes: 20.25 percent

►Commute time: 16.5 percent

►Schools: 14.15 percent

Many of these issues don't surface during an open house and may manifest years after the purchase as a family grows or a member moves out. Despite these regrets, which almost 95 percent of the survey respondents said they think about at least occasionally, 66.4 percent of Americans said they would buy their current home again, and 67.96 percent said that they are not planning on moving within the next five years.

Video: Do You Know What Consumers Want from a Real Estate Agent?

by Graham Wood, REALTOR� Magazine

Do you know what consumers want from a real estate agent? sure, you might have a pretty good idea - but why not take it from them? Check out this video!

Mike Reff, broker-associate at Madison & Company Properties in Denver, wanted his team, The Knoll Team, to hear directly from consumers about what their needs are. They were already producing a Web video series, so they decided to hit the streets with their camera and microphone, and ask people point blank: What do you want from your agent?

"We always want to find out as much as we can from the public, our customers," Reff says of his team. "We felt that the only way to strive to provide the best possible service as real estate professionals is just to ask the public what they want. So that's what we did."

Once he was out there doing man-on-the-street interviews, Reff says he was surprised by the variety of answers he got from consumers on the question of what they want from their agents. "It just really goes to show that no two clients are the same," he adds. "Everyone has their own unique expectations and desires for what they want from a practitioner. We expected the standard 'good communication, looking out for our best interest,' but I think we were pleased to see some people touch on the relationship aspect.

"The biggest takeaway for anyone who watches the video is really to know your customers," Reff says. "Know what they want. There is no standard that will work across the board. As real estate professionals, we have to adapt to our clients' needs."

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Here are a few more articles regarding Housing and Real Estate Trends you may also enjoy:

Here's How Much Americans Owe
on Mortgages in Every State

by Andy Kiersz and Libby Kane for Business Insider

A mortgage is considered " good debt ," meaning it's a debt that could be considered an investment in yourself. By paying this debt, you're securing a place to live.

That's not to say that a mortgage isn't serious. According to credit bureau Experian, the average amount of money owed on a mortgage in the US is over $157,000, ranging from an average of about $93,000 in West Virginia to an intimidating $275,000 in Washington, D.C.

Using data provided to Business Insider by Experian's Decision Analytics group, we made a map showing the average mortgage balance - how much is still owed on existing mortgages - per account in each state (click map to enlarge):

Click HERE to see a table showing the average balance for each state, along with the average for the U.S. as a whole.

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Here are a few more articles regarding the Mortgage Industry and Mortgage Trends you may also enjoy:

Click Here to Enlarge Image

Successful Relationship Managers Are Partners to Their Clients

by Scott Vanderbilt for The Gallup Blog

The keys to success in any relationship -- whether romantic, business, or otherwise -- include both communication and action. This holds true in financial investing as well, where the relationship between the Relationship Manager (RM) and the customer can take one of two paths: 1) a successful path where both parties understand and trust each other, or 2) an unsuccessful path where communication and trust drop to subterranean levels and contribute nothing positive to the financial bottom line.

Gallup's 2012 Mass Affluent Investor study revealed that successful RMs do more than just take orders. Instead, they actively contribute to their relationships with customers and have significant influence on customers' feelings of success. More than half (56%) of mass affluent investors were satisfied with their RM while nearly three-quarters (71%) of successful mass affluent investors were satisfied with their RM. For those who attribute that success to their advisors in the latter group, the RM satisfaction rating soared to 87%. This speaks volumes about the RM role in investing, as the most successful investors were also the most satisfied with their financial partners.

The data aren't saying that RMs need to be important fixtures in their customers' lives. Rather, they just need to be an important fixture in their customers' financial investing lives. The overarching themes of investing success are communicating with customers and being knowledgeable about investing. When RMs act on these themes they build trust, confidence, and feelings of reliability with their customers. RMs must also deliver on their commitments. If they make a promise, they have to fulfill it. For example, if an RM says they are going to review a customer's portfolio for any changes, then they should present their recommendations by the deadline. Continue reading...
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