July 10, 2019

In This Issue:

  • TLTA Submits Amicus Letter in Case Before Texas Supreme Court
  • ALTA Alert: Companies Should Take Steps to Protect Systems
  • TDI Commissioner Kent Sullivan: 'Let’s Help People Complain'
  • VA Loan Churning Is Driving Up Mortgage Costs for all Government Borrowers

TLTA Submits Amicus Letter in Case Before Texas Supreme Court

TLTA | July 9, 2019
An amicus letter from TLTA to the Supreme Court of Texas asks the Court to provide guidance following an appeals court case that creates uncertainty regarding subrogation to an unrecorded ad valorem tax lien.

In the amicus letter, TLTA requests the following from the Court: If subrogation to an unrecorded tax lien requires an analysis of the equities, as held by the appeals court, then the Court is asked to provide specific guidance regarding the ways in which those equities should be analyzed and how a subrogated lender may foreclose its lien and still preserve subrogation to the tax lien.

Without such clarification and guidance, lenders and title insurers will face uncertainty regarding the status of relative lien priorities. 

Read the Amicus Letter »

TLTA's Judiciary Committee, which is chaired by Leslie Johnson, is responsible for recommending to our board of directors TLTA's position on court decisions that could affect the defense of title companies and title agents.

TLTA Judiciary Committee Members »


ALTA Alert: Companies Should Take Steps to Protect Systems

ALTA | July 3, 2019
ALTA has learned that title and settlement company usernames and passwords have been allegedly acquired using a phishing campaign.
 
A person claiming to be an ethical hacker contacted ALTA via Twitter and provided files that contain approximately 600 data entries consisting of domain identification, IP addresses, usernames and passwords. The data contains information for non-title companies as well.
 
There is no indication the data comes from a specific system breach. There are no signs that the credentials are still active or how they were obtained. We believe this person is also contacting individuals and companies they can identify from the data.
 
ALTA's IT department is analyzing the information. We will reach out to individual companies if any data is connected to specific title and settlement companies.
 
In the meantime, it's important to watch for unauthorized access to your system. If you suspect that any contact information was obtained or your system was accessed, alert your IT department or engage an IT specialist to implement your information security program and response plan.
 
Some steps you can take to protect your system include:
  • scanning your systems and devices to make sure that you are free from malware
  • update or patch your software and operating systems
  • require your staff to update and change system passwords, especially those containing customer information and banking services
We also suggest reporting any suspicious emails to the Federal Bureau of Investigation Internet Crime Complaint Center. If you have additional information about this incident or similar attacks, please contact ALTA's IT staff.
 


TDI Commissioner Kent Sullivan: 'Let’s Help People Complain'

Commissioner of Insurance Kent Sullivan | July 9, 2019
EDITOR'S NOTE: TDI Commissioner Kent Sulivan shared the following message yesterday, and we thought you would be interested in reading his ideas...
 
If helping people complain sounds like an odd business tactic, consider this: The Harvard Business Review found that customers whose complaints were handled quickly were willing to pay even more for services from that company in the future.

For the Texas Department of Insurance, consumer protection is our core business. Everything we do – reviewing insurers’ financial solvency, licensing agents, investigating fraud – is ultimately about protecting consumers. That’s why addressing the agency’s complaint backlog was a priority when I took over as Insurance Commissioner 18 months ago.

TDI’s technology and processes had remained essentially unchanged over many years as the number of complaints increased. The result: A backlog developed in 2015 that grew as the gap between the number of complaints received and the number resolved widened. We’re now closing that gap.

We modernized our business operations, increased automation, and emphasized processing center best practices to increase the number of complaints we can process. We assigned more staff to health complaints, which make up 75% of all complaints. We also improved the information on our website to help consumers understand what types of complaints we can help with and their other appeal options.

TDI can help consumers when insurance companies fail to comply with state law or the terms of their policies. But some issues require the courts or another dispute resolution process. For example, TDI can’t determine who’s at fault in an accident or how much roof damage was caused by a storm instead of normal wear. We recently developed a list of free and low-cost legal resources to help consumers with these types of disputes.

We plan to do more to help consumers understand their rights and connect them to legal resources. My focus on improving access to justice began long before I joined TDI. I’ve long encouraged expanding access to legal resources to help consumers represent themselves in court proceedings.

As Insurance Commissioner, I hear too many stories about consumers who have trouble finding out what they can do to protest a company’s decision. Failing to provide clear, easy-to-find information about how to complain only leads to more calls and costly disputes in the long-run. Helping people complain – and resolving disputes fairly – is a good business practice. It’s also the right thing to do.


VA Loan Churning Is Driving Up Mortgage Costs for all Government Borrowers

HousingWire | July 9, 2019
The churning of loans backed by the Department of Veterans Affairs has long been a thorn in Ginnie Mae’s side, as the agency has worked for three years to curb abuses by VA lenders, even going so far as booting some lenders from its securities platform and restricting others for questionable conduct.

And, it seems even the authorities are getting involved, with the U.S. attorney’s office in the Eastern District of New York subpoenaing at least eight lenders earlier this year as part of its investigation into loan churning that amounts to higher mortgage fees for military veterans.  

Now, the Urban Institute has tacked a number to the problem.

The institute recently released a study asserting that fast prepayments as a result of churning is driving up rates on all government mortgages by seven basis points, or 0.07%.
That means that the monthly payment for a $250,000, 30-year mortgage with a 4.25% interest rate is $175 more because of the costs of churning on VA loans.

While the institute acknowledges that this is “not a huge number,” it says it is nonetheless significant, especially because it stands to increase if larger investors lose faith in Ginnie Mae because of rampant churning.
 
Read More »

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