RESPA, RESPA and  MORE RESPA
We keep bringing you more and more articles, seminars, and information about RESPA but please don't lose interest now – this issue is just heating up.  In this issue of Dateline Austin, we will be updating you on three different RESPA issues. The first issue discussed is HUD's proposed RESPA reform changes. HUD continues to send out strong signals that a "revised" proposed rule will be out soon. If you have forgotten or maybe you have just skipped reading in the last several issues of Dateline Austin, this is the rule that could potentially pre-empt Texas' state laws and regulations. And not to mention, it could be very harmful to small business. The second issue discussed is HUD's new beefed-up enforcement division. You will want to make sure and read the latest on HUD's attempt to hunt down Section 8 violator's, especially since they are targeting many Texas cities. Last but not least, is the third item of interest to many in the industry – the latest word on TDI's proposed agenda item relating to P-53, Rebates and Discounts. All of these are equally important issues and we urge you to please be aware of the continuing RESPA changes that are occurring in the industry.

Alleged violations of Section 8 of RESPA continue
HUD's decision to beef up its enforcement division continues to affect title companies in Texas. On May 13, 2003, HUD sent out a letter to several title companies in the Austin market warning companies to comply with Section 8 which is the anti-rebate, kickback section of RESPA. As most of you are aware, last summer several title companies in the Austin market were investigated by HUD for allegedly violating Section 8 in relation to virtual tours. HUD has received numerous complaints that indicate the practice may still be continuing, as well as complaints that title companies may be providing brochures, flyers and other materials to real estate agents for free or below cost. This continues to be a very serious issue. If this practice continues, HUD is threatening to pursue a more formal investigation if needed and any person found in violation of Section 8 of RESPA may be fined up to $10,000, subject to imprisonment for up to one-year, or both.  To view a copy of HUD's letter, please click here.

The new RESPA police - An update on HUD's enforcement division
In May's Dateline Austin, we informed you that HUD officials were planning to beef up its enforcement measures once the office has been fully staffed. Just recently HUD hired 30 new RESPA enforcement staff members and is increasing the number of enforcement actions.

The law firm of Kirkpatrick & Lockhart has produced an informative article that summarizes the Department's enhancement of its RESPA Enforcement Division, the types of violations that are likely to trigger an enforcement action, and the steps one should take to avoid RESPA violations. Please click here to view the article.

TLTA committees and task forces begin work on important issues
President Dave Ginger has named a number of committees and task forces to study legislative and regulatory issues affecting the industry. A few of the committees meeting this summer will be the Multi-State Transaction Task Force led by Bill Moize, North American Title Company. This task force is charged to study and make recommendations to the Commissioner on proposals regarding anti-rebating regulations for multi-state transactions involving Texas real property. The Tax Foreclosure Sales Task Force led by Stan Keeton, Alamo Title is charged with finding a solution to help secure title insurance for vacated lots foreclosed by local taxing authorities due to tax liens. This is an issue brought to us by the Texas Association of Builders. The Rates, Rules & Forms Committee led by Bickford Shaw, LandAmerica Financial Group, will review and recommend positions on agenda items that were tabled last year for further study. Check out TLTA's website at www.tlta.com to view full committee rosters.

Governor Perry calls Special Session for June 30^th
The Governor called a special session to address the congressional redistricting issue that failed passage during the regular session due to 51 House democrats leaving the state and denying a quorum. Last week Governor Perry announced the addition of 28 issues to the call of the current legislative session on redistricting. Of the 28 issues added, 21 are topics that were discussed and debated in a government reorganization bill last session. None of the 28 issues directly affect the title insurance industry; however the TLTA lobby team will continue to monitor all bills being considered.

Conference attendees BACK THE PAC!
Annual conference attendees took advantage of opportunities to raise money for the PAC. The Second Annual Silent Auction netted almost $6,000. Highest bidders took home some really exciting items and at times the competition was pretty fierce. This is an event that everyone should participate in since it is a fun and easy way to contribute to the PAC. Attendees also attended the Annual PAC Breakfast to hear our guest speaker, Harvey Kronberg, editor of the Quorum Report, talk about the legislative session. Unfortunately, Mr. Kronberg had to cancel at the last minute. Lucky for us, Rep. Jose Menendez (D-San Antonio) was willing to step in on short notice to give attendees the inside scoop. Rep. Menendez did a great job and we appreciate his willingness to share all of his incredible stories with us, as well as highlights from the session. TLTA Legislative Consultant, Allen Place also deserves kudos for adding his insight and observations. Both events were a huge success and we thank everyone for their continued efforts to support the PAC!

TLTA members tell Congress "Don't Mess with Texas!"
A group of TLTA members and staff traveled to Washington D. C. for two intense days of educating lawmakers about our concerns with HUD's RESPA reform proposal. Attendees included: Jack Rogers, Jack Rattikin III, Parker Neel, Allen Shindler, Celia Flowers, Jeff Davis, Dawn Moore, Dave Ginger, Leslie Midgley, Mindy Carr and Jim Hyland, TLTA's D.C. lobbyist. Meetings were scheduled every hour with key committee members where we discussed our opposition and asked if they would be willing to join in signing a Texas Delegation letter to HUD outlining our major objections to the proposal. The group met with the following Congressmen:  Pete Sessions (R-Dallas), Martin Frost (D-Dallas), Kay Granger (R-Fort Worth), Max Sandlin (D-Marshall), Charlie Gonzalez (D-San Antonio), Henry Bonilla (R-San Antonio), Randy Neugebauer (R-Lubbock), Jeb Hensarling (R-Dallas), aides to Majority Leader Tom Delay (R-Houston) and Senators Hutchison (R) and Cornyn (R). We feel the meetings were successful and most legislators were very enthusiastic about joining together to ensure that HUD does not pre-empt our state insurance laws and regulations. We also stressed the harmful impact this proposal would have on small business in Texas. Both Senator Cornyn and Senator Hutchison agreed to make inquiries to HUD and the White House. The most informative meeting came from HUD Secretary Mel Martinez' Chief of Staff, Frank Jimenez and White House staff. Mr. Jimenez indicated that a revised proposal would be issued sometime in the near future.

In order to continue our strong grassroots efforts, we need every TLTA member to contact their Congressman and U.S. Senators during August while they are home in their district offices. We must continue to put pressure on the Texas Congressional Delegation to sign the delegation letter and urge them to contact HUD, the White House and congressional leaders. They must stress to these entities that HUD's proposal will put small agents out of business because they will not be able to compete and we do not want HUD to pre-empt state laws and regulations in Texas. We also encourage you to ask other members in the settlement service industry to join you in your meetings. Realtors, Surveyors, Mortgage Brokers and  individuals in the Pest Control business have just as much to lose as those of us in the title insurance industry. A congressman will have a hard time turning down a meeting when you have a large group of constituents/local businessmen wanting to speak with him or her. If you need help in arranging appointments or finding out which congressional district you live in, please contact Mindy Carr at mindy@tlta.com or 512.472.6593. For a copy of talking points, please click here.

FTC publishes final rule on safeguarding customer information
FTC's final rule on safeguarding customer information affects each and everyone one of us in the title insurance industry. The rules which went into effect on May 23, 2003, requires each financial institution to develop a written information security program that is appropriate to its size and complexity, the nature and scope of its activities and the sensitivity of the customer information at issue. Basically this means that each real estate settlement service provider, whether you are a one-employee office or more, must prepare and retain in its files such a written information security program. The reason behind this rule is to protect customer information form unauthorized access and misuse. Identity theft is a growing problem and the FTC feels that financial institutions can be a target because of the sensitive information that is collected and stored. Specifically, customer's names, addresses, phone numbers, bank and credit card numbers, income and credit histories, and social security numbers. FTC's rules are part of the implementation of the Gramm-Leach-Bliley Act. We urge you to review information regarding these safeguards at http://www.ftc.gov/opa/2003/05/safeguards.htm.  You also may want to check out ALTA's sample privacy form. Click here to download a copy of the form. Please contact Mindy Carr at mindy@tlta.com or 512.472.6593 if you have any questions regarding this new rule.

Investigation into Freddie Mac's accounting practices continue
Federal regulators have broadened their investigation into the nation's second largest mortgage finance company. They intend to intensify their efforts and find out the extent of the accounting and management troubles at Freddie Mac. This has prompted Congress to begin their own investigation. The Senate Banking Committee intends to hold its first hearing into the accounting problems on July 17. More than likely, testimony will come from the Office of Federal Housing Enterprise Oversight (OFHEO), which oversees operations at Freddie Mac and Fannie Mae. The OFHEO has recently been accused of giving both of the agencies an unfair competitive advantage over other mortgage buyers. This may prompt Congress to push for more regulatory requirements.