October 9, 2019

In This Issue:

  • TLTA Submits Amicus Letter in Case Before Supreme Court of Texas
  • TDI Job Opening: Title Insurance Specialist
  • Mike Savas: Consumer-Friendly Title Insurance Proposals Adopted by Texas Department of Insurance
  • New Real Estate-Related Laws You Should Know About
  • Commentary: In Case Against Ocwen, a Sign of Turmoil to Come for CFPB
  • Fannie Mae and Freddie Mac Now Appear to Be Here to Stay. How Exactly Did That Happen?

TLTA Submits Amicus Letter in Case Before Supreme Court of Texas

TLTA | Oct. 7, 2019
An amicus letter from TLTA to the Supreme Court of Texas was filed this week encouraging the court to uphold the availability of the interpleader remedy for escrow agents in a case under review from the 5th District Court of Appeals (see Silver Star Title, LLC d/b/a Sendera Title v. Marquis Westlake Development, Inc., et. al.)
The ready availability of the interpleader remedy is critical to an escrow agent’s function. In the case before the court, the buyer’s funds for closing were placed into escrow. The transaction failed to close, and both the buyer and seller made conflicting demands to the title agent regarding handling of the escrow. Neither the purchase contract nor the instruction letter to the title agent contained any instruction or direction on the issue. The title agent could not accede to the demands of one party without breaching its fiduciary duty to the other and exposing itself to liability. This is the very crux of an escrow agent’s fiduciary duty – not to make interpretations and decisions favoring one party over the other. Such decision making belongs to the courts when there is a dispute.
Since this is an issue of vital importance to the title industry in Texas, TLTA urged the Court to uphold this important right. Without a readily available interpleader remedy, the longstanding practice of utilizing an escrow agent to consummate a transaction will be turned on its ear, requiring at a minimum detailed escrow agreements and agreed closing instructions. The result will be unacceptable delay in closing transactions, especially in complex commercial deals, and increased costs to all parties, including lenders and residential and business consumers.
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 »

TDI Job Opening: Title Insurance Specialist

TLTA | Oct. 1, 2019
The Texas Department of Insurance has a job opening that might interest you or someone in your professional network. The agency is hiring a "Title Industry Specialist" with meaningful title insurance experience. 
Read TDI's Posting and Apply »
If you have questions, please contact TDI's David Muckerheide

Mike Savas: Consumer-Friendly Title Insurance Proposals Adopted by Texas Department of Insurance

Mike Savas | Oct. 7, 2019
Editor's Note: The following article by TLTA President Mike Savas was published in this month's Texas Apartment Association newsletter
Like our friends and customers who operate in the commercial real estate sector, Texas title insurance professionals remain responsive to consumer feedback and eager to sustain and grow our state’s successful real estate economy.

During a periodic review of our rates that the Texas Department of Insurance (TDI) started in 2018, the Texas Land Title Association (TLTA) proposed a package of consumer-friendly rate and rule changes that were adopted by TDI in June.

After these changes went into effect Sept. 1, commercial interests and other Texas consumers can expect to see significant cost savings and other benefits.
Read More »

New Real Estate-Related Laws You Should Know About

TexasRealtor.com | Oct. 1, 2019
Several new laws that went into effect Sept. 1, 2019 will help protect Texas real estate consumers.
Decrease Excessive Taxes
When a property’s use classification is changed from agricultural to non-agricultural, county appraisers previously could assess the owners five years of retroactive taxes based on the new classification. Appraisers also could charge 7% interest on the retroactive taxes.
A new law reduces the lookback period from five years to three years and reduces the interest charged from 7% to 5%, saving property owners money.

Ending Restrictive Regulations on 
Building Materials
Starting Sept. 1, cities and counties are no longer able to require or prohibit the use of certain building products, methods, or materials—such as brick or stone masonry—in the construction of a residential or commercial structure for non-safety reasons, preserving property owners’ right to choose.
Read More »

Commentary: In Case Against Ocwen, a Sign of Turmoil to Come for CFPB

Alison Frankel - Reuters | Oct. 7, 2019
Last month, after the Consumer Financial Protection Bureau filed a brief at the U.S. Supreme Court arguing that its own director was appointed under an unconstitutional provision, I predicted that the bureau’s abandonment of its longstanding defense of its own constitutionality was going to affect the CFPB’s entire mission.

Now we’re beginning to see the first ripples from the CFPB’s new position. And if the Supreme Court didn’t already understand the urgency of resolving the future of the federal agency that’s supposed to make sure consumers aren’t being ripped off by financial institutions, new developments in the CFPB’s sweeping case against the mortgage servicer Ocwen should set off alarm bells. The justices are scheduled to conference this Friday on a petition by the California debt resolution firm Seila Law, which is challenging the constitutionality of the CFPB’s structure. The Ocwen litigation shows the uncertainty that will cloud CFPB litigation if the justices punt.

Here’s the background on the Ocwen case. The CFPB brought an enforcement action against Ocwen in 2017, seeking an injunction and money damages for mortgage servicing violations on thousands of loans. Ocwen’s lawyers at Goodwin Procter moved to dismiss the case, arguing, among other things, that the CFPB’s structure is unconstitutional because its omnipotent director can only be fired for good cause, allegedly in violation of separation of powers doctrine. (Ocwen’s lawyers did not respond to my email about the case.)

Read More »

Fannie Mae and Freddie Mac Now Appear to Be Here to Stay. How Exactly Did That Happen?

HousingWire | Oct. 3, 2019
When the federal government announced last week that it would allow Fannie Mae and Freddie Mac to rebuild a portion of their capital reserves to a total of $45 billion combined as part of a plan to exit conservatorship, the message was clear: The government-sponsored enterprises are back and they’re not likely to go away any time soon.

It’s a dramatic reversal from where things stood just a few years ago, when the prevailing sentiment in Washington, D.C. was how to get rid of the GSEs, once and for all.

In fact, there were numerous Congressional efforts that would have seen the GSEs wound down within five years.

And, if one of those bills had passed in 2015 (as was certainly a possibility), the GSEs likely would be in their last year of existence as we speak.

Instead, the GSEs appear primed to exit conservatorship on stable footing with healthy financial backing and reformed operations. So, how exactly did we get here?

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