December 9, 2003

EFFECTIVE JANUARY 1ST - Guaranty Assessment re-instated
 The Texas Title Insurance Guaranty Association has announced that effective January 1, 2004 title agents and direct operations will again be required to collect a Guaranty Fee of $1.00 per owner or mortgagee title policy reported on quarterly statistical reports. Click here for more information on the specific requirements regarding payment of this fee and a sample remittance form.

The statutory authority for the Guaranty Fund can be found in Article 9.48 of The Insurance Code. (Click here to view Article 9.48.) Section 6.(c) specifically refers to how funds derived from guaranty fees can be used. In addition to covering claims, funds are used to pay for audit expenses, providing a benefit to consumers by insuring the enforcement of state regulations governing title insurance.

For a FAQ sheet, please click here. More specific questions should be directed to Burnie Burner at TTIGA, 512.474.1587 or bburner@longburner.com.

Texas Title Insurance 2002 Biennial Rate Hearing
 The 2002 Texas Title Insurance Biennial Rate Hearing will be held December 15 – 17, 2003 and will begin at 9:30 a.m. in Room 100 of the William B. Hobby Jr. State Office Building, 333 Guadalupe Street, Austin, Texas. Click here to review a complete list of agenda items to be considered at the rate hearing. 

On November 14, parties to the Ratemaking Phase filed written direct testimony in support of their respective recommendations to the Commissioner for changes to the Title Insurance Basic Rate and other rate making agenda items. The schedule for pre-filed written testimony is as follows:

  • December 4 deadline to submit rebuttal testimony and objections to the direct.
  • December 11 deadline for redirect testimony and objections to rebuttal
  • December 12 deadline for statement of position and objection to redirect

The following recommendations are based upon the parties’ pre-filed direct testimony and are subject to change as comments are reviewed and exchanged during the written testimony process.  Mr. Allan Schwartz, on behalf of the Office of Public Insurance Council (OPIC) recommended that title insurance rates be reduced by 7.8 percent. Dr. Mark Crawshaw, on behalf of the staff of the Texas Department of Insurance made no specific recommendation, but produced a series of possible rate change indications based on several variable factors, ranging from a rate reduction of 5.2 percent decrease to a rate increase of 2 percent. Dr. Nelson Lipshitz, on behalf of TLTA, recommended no change. Again, these are only preliminary numbers based on their pre-filed direct written testimony. More than likely, the numbers will change during the process. If you have any questions regarding the rate hearing, please contact Mindy Carr at mindy@tlta.com or call 512.472.6593.

Updated agenda items now on website
 Stewart Title Guaranty Company has amended its original filed Agenda Item 2002-45 and Agenda Item 2002-47. TLTA will support items as originally filed. To view Stewart’s amended agenda items, please click here.

Proposed changes to existing Home equity forms
 The TLTA Board of Directors has reviewed and voted to support the proposed amendments that were submitted by Stewart Title Guaranty Company. Stewart requested that the Board consider supporting changes to these forms since a constitutional amendment was passed in September 2003 that made changes to the home equity law. The Texas Department of Insurance is expected to hold a special title insurance hearing in the near future to evaluate amendments intended to conform to these recent changes. If you would like to review the proposed amendments please click on (link to website). 

GLO Commissioner to hold vacancy hearing in East Texas
 General Land Office Commissioner Jerry Patterson will hold a public vacancy hearing on Wednesday, December 17th, in Gilmer, TX to hear testimony on whether a vacancy exists in Upshur County. The claim filed by a developer and a former surveyor essentially says the titles to 4,662 acres between Longview and Gilmer are invalid because of surveying errors dating back to 1838. Depending on the findings by the Commissioner, this claim could potentially affect over 1,000 landowners who also have large sums of oil royalties at stake.  For more information on the upcoming hearing, click on www.glo.state.tx.us. If you are interested in receiving updated information on this issue or if you plan on attending the hearing on December 17th, please contact Mindy Carr at mindy@tlta.com or call 512.472.6593.

New State Law completely alters the way Homeowners seek Redress when they have a complaint about work done to construct, remodel or repair a residence after September 1, 2003.
 The Texas Residential Construction Commission was created to oversee and implement the Residential Construction Liability Act, a revised law that was adopted during the last regular session of the Texas Legislature. Beginning March 4, 2004, all Texas builders must obtain a certificate of registration from the commission, and builders must register each new home, home repair or home improvement. To learn more about this new law click on the Texas Real Estate Center’s article: http://www.recenter.tamu.edu/news/18-1103.html  
For more information about the Texas Residential Construction Commission click on: http://www.trcc.state.tx.us/

TDI Sunset to be in 2007
 The Texas Department of Insurance (TDI) was scheduled to go through the Sunset process in 2005. However, since numerous changes have been made regarding the regulation of homeowner’s insurance, TDI will be reviewed in 2007.

What is the sunset process?
Sunset is the regular assessment by the Legislature of the continuing need for a state agency to exist. While most oversight is concerned with agency compliance with legislative policies, Sunset asks a more basic question: Do the agency's functions continue to be needed? The Sunset process works by setting a date on which an agency will be abolished unless legislation is passed to continue its functions. This creates a unique opportunity for the Legislature to look closely at each agency and make fundamental changes to an agency's mission or operations if needed. Agencies are typically reviewed every 12 years. About 20 to 30 agencies go through the Sunset process each legislative session.

Political Kudos to . . .
 Dan Liane, Executive Vice President of Heritage Title Company of Rockwall who attended Rep. Jodie Laubenberg’s local fundraiser on behalf of TLTA PAC. Celia Goode-Haddock, President of University Title Company showed her support by contributing and attending Senator Steve Ogden’s local fundraiser in College Station. Jack Rogers, President of TICOR, attended Senator Jeff Wentworth’s fundraising event in San Antonio. TLTA President Dave Ginger traveled to Arlington to attend a fundraising event for Senator Chris Harris. We are looking for enthusiastic members to be more involved in the political process. If you are interested in attending a fundraiser, contributing to the PAC, or if you have recommendations to the PAC Board, please contact Mindy Carr at mindy@tlta.com or call 512.472.6593. 

Upcoming TLTA Board Meeting
 Your Board of Directors will meet on the afternoon of Wednesday, January 14, 2004 in Houston at the Doubletree Hotel Post Oak. We encourage you to get involved in your association by attending board meetings. A preliminary agenda is available approximately two weeks prior to the meeting and can be obtained by calling Leslie at the TLTA office at 800.472.1711.

Martinez expected to release a rule on RESPA reform
 Rumors continue to fly in D.C. on whether or not HUD Secretary Mel Martinez will continue with his quest to reform RESPA. More than likely, he intends to release either a final rule or a “new” re-proposed rule by the end of the month. There is also speculation that he intends to run for the Senate in Florida therefore leaving us to wonder whether or not he will do anything at all before leaving his post at HUD. TLTA D.C. lobbyist, Jim Hyland with Piper Rudnick, continues to work with the other national real estate trade groups in opposition to any RESPA reform proposal released by HUD. TLTA will keep you informed on any breaking news regarding this issue.

States say “NO” to Federal Insurance Regulation . . .
 Recent hearings held by the Subcommittee on “Reforming Insurance Regulation-Making the Marketplace more Competitive for Consumers,” heard a resonating opposition from those who testified on federal regulation of the insurance industry. Senator Hannon testified on behalf of the National Conference of State Legislatures, stating that “It would endanger effective state regulation, threaten the creation of a vast new federal bureaucracy, risk state consumer protections, jeopardize insurance solvency and endanger the strength and stability of the insurance marketplace.” 

Click here to view ALTA’s comments to the subcommittee:

Federal legislation affecting the title industry
 Fair Credit Reporting Act-HR 2622 was passed by Congress and is headed to the President’s desk. The legislation permanently extends the FCRA and provides consumers with free access to credit reports. The bill also includes restrictions on marketing solicitations by affiliates. Therefore, before a company may share “certain information” about a consumer with another affiliate for marketing purposes, the consumer must be given a option to prohibit such information sharing. ALTA is currently having outside counsel review this legislation for its potential implications for the title insurance industry.

Database Protection Legislation-HR 3261 sponsored by Rep. Howard Coble, (R-N.C.) is designed to prevent the repackaging of proprietary database information for commercial use. Many groups, including those in the real estate industry, have lobbied for a federal law to protect proprietary databases such as the MLS home listing service.

Save our Homes Act-HR 3322 sponsored by Rep. Jan Schakowsky (D-Ill.) addressing the problem of predatory lending was re-introduced in the U.S. House of Representatives. The original bill sought to bar any creditor or mortgage broker from directly or indirectly compensating, coercing, or intimidating an appraiser with respect to the value of real estate that is to be covered by a conforming home loan. 

The new version adds:

  • A creditor or mortgage broker may not withhold compensation for the same reasons as stated above.
  • Detailed civil and criminal penalties that would be imposed by violators.
  • Requires appraisals on high-cost mortgages, disregarding the current threshold of 250k.
  • Seeks to have the appraisal made available to the borrower prior to credit being extended.