Be Sure To Check Out Our Online Classes
Click HERE for a complete list of course descriptions or any of the following individual courses:
Principles of Closing
Principles of Abstracting (National Edition)
Principles of Abstracting (Minnesota Edition)
Title Exam for Title Insurers (Midwest Edition)
Reading and Drawing Legal Descriptions
These classes are all available at Classes.Landrecs.com.
For information on new classes contact me.
License Renewals for MN are Due by June 30th
Real estate agents, abstracters, closing agents and brokers are reminded that they must renew their licenses on or before June 30th. So please check your license for renewals.
Information from the Commerce Department on MN state licensing can be found here.
OCC Adds Information for Third Party Vendors
On June 7th, the OCC added bulletin 29 to third-party relationships to clarify the way lenders should interact with third party vendors, to us, that means how lenders deal title and closing providers.
-
Get the entire OCC bulletin here
.
As a part of the lengthy bulletin, it stated the lender is responsible for ongoing monitoring.
Ongoing Monitoring
Ongoing monitoring for the duration of the third-party relationship is an essential component of the bank’s risk management process. More comprehensive monitoring is necessary when the third-party relationship involves critical activities. Senior management should periodically assess existing third-party relationships to determine whether the nature of the activity performed now constitutes a critical activity.
After entering into a contract with a third party, bank management should dedicate sufficient staff with the necessary expertise, authority, and accountability to oversee and monitor the third party commensurate with the level of risk and complexity of the relationship. Regular on site visits may be useful to understand fully the third party’s operations and ongoing ability to meet contract requirements. Management should ensure that bank employees that directly manage third-party relationships monitor the third party’s activities and performance. A bank should pay particular attention to the quality and sustainability of the third party’s controls, and its ability to meet service-level agreements, performance metrics and other contractual terms, and to comply with legal and regulatory requirements.
The OCC expects the bank’s ongoing monitoring of third-party relationships to cover the due diligence activities discussed earlier. Because both the level and types of risks may change over the lifetime of third-party relationships, a bank should ensure that its ongoing monitoring adapts accordingly. This monitoring may result in changes to the frequency and types of required reports from the third party, including service-level agreement performance reports, audit reports, and control testing results. In addition to ongoing review of third-party reports, some key areas of consideration for ongoing monitoring may include assessing changes to the third party’s
• business strategy (including acquisitions, divestitures, joint ventures) and reputation (including litigation) that may pose conflicting interests and impact its ability to meet contractual obligations and service-level agreements.
• compliance with legal and regulatory requirements.
• financial condition.
• insurance coverage.
• key personnel and ability to retain essential knowledge in support of the activities.
• ability to effectively manage risk by identifying and addressing issues before they are cited in audit reports.
• process for adjusting policies, procedures, and controls in response to changing threats and new vulnerabilities and material breaches or other serious incidents.
• information technology used or the management of information systems.
• ability to respond to and recover from service disruptions or degradations and meet business resilience expectations.
• reliance on, exposure to, or performance of subcontractors; location of subcontractors; and the ongoing monitoring and control testing of subcontractors.
• agreements with other entities that may pose a conflict of interest or introduce reputation, operational, or other risks to the bank.
• ability to maintain the confidentiality and integrity of the bank’s information and systems.
• volume, nature, and trends of consumer complaints, in particular those that indicate compliance or risk management problems.
• ability to appropriately remediate customer complaints.
Bank employees who directly manage third-party relationships should escalate to senior management significant issues or concerns arising from ongoing monitoring, such as an increase in risk, material weaknesses and repeat audit findings, deterioration in financial condition, security breaches, data loss, service or system interruptions, or compliance lapses. Additionally, management should ensure that the bank’s controls to manage risks from third-party relationships are tested regularly, particularly where critical activities are involved. Based on the results of the ongoing monitoring and internal control testing, management should respond to issues when identified including escalating significant issues to the board.
Title Agent Charged with Negligence and Compensatory Damages
A Connecticut title agent was held liable for $77,500 that was paid by a Title Underwriter to clear title to property it insured, as well as more than $20,000 in compensatory damages for fees and expenses incurred in negotiating the settlement. The case showcased liability by the agent for a negligent title search, and breach of duty to the underwriter.
CFPB Gives Snapshot of Complaints from Older Consumers
The Consumer Financial Protection Bureau (CFPB) released a complaint report highlighting complaints submitted by older consumers.
The snapshot shows that older consumers frequently report servicing problems with reverse mortgages, difficulties recovering money after financial scams, confusion around deferred interest credit cards, and charges for unauthorized add-on products. The snapshot provides an overview and analysis of more than 103,100 complaints submitted to the Bureau by consumers voluntarily reporting their age as 62 or older.
“Older consumers who may be on a fixed income are at a greater risk for financial trouble if they encounter problems with financial products or services,” said CFPB Director Richard Cordray. “The complaints submitted by older consumers are important for the Bureau to ensure we are properly looking out for this segment of the population.”
The Monthly Complaint Report can be found at: CFPB Press release
Closing Agent License Renewal is Due Now
Check your closing agent license for your renewal date! Licenses are good for two years and must be renewed by June 30th of the second year after your license is issued. If you miss the cutoff, you will be required to retake the Closing Agent Prelicense course, pay new license fees, and once again complete the entire process through the State’s Pulseportal System.
Meanwhile, and this is totally random, don’t miss the Elvis Cockatoo on youtube. It will make your day. 🙂
https://www.youtube.com/watch?v=CEQuDyuQFKE
Strangest Questions Asked by Buyers
Long before home buyers decide a certain place must be theirs, it behooves them to ask a lot of questions. For example: “How’s the neighborhood?” or “How old is that water heater, anyway?” Ask away! Such queries help you pare down your options, so don’t be bashful; real estate agents have heard them all.
However, the adage “There’s no such thing as a stupid question” isn’t always true. As proof, just check out this list of the strangest questions real estate agents have ever heard about a house. Cue the “Twilight Zone” music—things are about to get very, very weird.
- ‘How do you keep alligators from coming up into the toilet?’
Michael Lyons, a real estate broker with Lyons Realty Group in Hollywood, FL, has certainly heard his share of concerns about alligators lurking in yards, ponds, and swimming pools. But sneaking into the house? Through a toilet? That left him stumped.
“I couldn’t answer that question seriously,” he said. “So I made up some weird solution. I told them, ‘pour vinegar down the toilet once a month, they hate it.'”
This seemed to appease the buyers, who ended up purchasing the house. No word on whether or not the vinegar trick worked.
- ‘Do any swingers live in the neighborhood?’
Top of Form
Bottom of Form
While home buyers often have questions about the neighbors, this one was a first for Kate Julian, a real estate agent with City Chic Real Estate, in Washington, DC.
“They said they were swingers and that’s something they were looking for,” she said.
Unsure what to say, she countered with, “drive around the neighborhood and see.” After all, aren’t swingers very friendly?
- ‘Does the car in the driveway come with the house?’
Chike Uzoka, a real estate agent with Weichert in Newark, NJ, has heard of buyers asking whether many things “come with the house,” from chandeliers and furniture to appliances and pool equipment. But a car?
The only way he could answer such a question was with sarcasm: “If the attorney doesn’t catch it in attorney review, then yes it does!”
- ‘Is anyone buried in the backyard?’
Larry Prigal, a real estate agent with Re/Max in Gaithersburg, MD, had no reason to believe the house he was selling had any corpses stashed 6 feet under. “So I joked, ‘I’m not aware of anyone buried here, but you can dig it up after you’ve settled on the property.’”
Who knows? Maybe the buyers were worried about our next point…
- ‘Are there any ghosts in the house?’
When Chris Dossman, a real estate agent with Century 21 in Indianapolis, holds open houses at older homes, it’s not uncommon to hear creaks or creepy noises. That prompts a superstitious few to pop the ghost question.
“I usually respond jokingly at first that there are ghosts but that they’re friendly, but then immediately follow with ‘just kidding,’ because people can be really weird about those things,” Dossman said. “Cellars and basements can be especially freaky, even to me.”
Nonetheless, a haunted house is, in fact, a selling point for some home buyers. Go figure.
- ‘I really like this house, but I need to pray about it. Is that OK?’
Kimberly Sands, a real estate broker with Coldwell Banker Sea Coast Advantage, in Wilmington, NC, said she gets this question (or some variation of it) a fair amount, so she wasn’t alarmed, at first.
“I thought the would-be buyer would go home and pray about it and then decide, so I said ‘sure.'” That’s when things got weird.
“All of the sudden she drops to her knees and starts flailing her arms and yelling at the top of her lungs: ‘Dear Jesus, please send me a sign, Jesus, a sign that I should buy this house!’ Meanwhile, I slowly started inching toward the door planning a hasty escape. I ended up waiting outside on the curb for her to come out for about 15 minutes. When she came out, she was cool, composed, and had her answer: no.”
- ‘Do you think the homeowner would give me the house without a down payment?’
Taken aback, Julie McDonough, a real estate agent with AmeriSell, in Southern California, told the buyer, “I can’t imagine they would.”
The buyer went on to explain that he’d taken a seminar on how to get the seller to deed the buyer the property without any credit or money.
“So I asked him, ‘How is that going? Has anyone deeded you a property yet?’” McDonough recalled. “He said, ‘No, but it’s a numbers game.’”
- ‘Can I come back at midnight to see how the moon here affects my soul?’
The question threw Pate Stevens for a loop, but then he figured there was no harm.
“Although a strange request, I drove over to the home at midnight to let him in,” said Stevens, a real estate agent with Nourmand & Associates, in Beverly Hills, CA.
The outcome? “He didn’t buy the house because the moon ‘didn’t feel right’ to him.”
- ‘Why is the garage unfurnished?’
Um. “Because the sellers use it for their cars, not as a living space,” replied Benny Kang, a real estate agent with Uniti Realty, in Irvine, CA, to which the buyer said, “Oh, you’re right.”
“When I heard that question, I thought, ‘This is going to be a long tour,'” Kang said.
- ‘Can we close all the blinds and doors and turn off the lights? I just need to see the space at its darkest.’
“I was pretty sure this was the end for me,” said a Brooklyn real estate agent who was holding an open house. “After I said OK, I stood by the front door with my hand on the doorknob.”
Fortunately, the agent, who asked not to be identified, made it out unscathed. “[The buyer] was this eccentric guy who I later found out was the CEO of a big startup.”
Daniel Bortz is a Realtor in Maryland, Virginia, and Washington, DC, who has written for Money magazine, Entrepreneur magazine, CNNMoney, and more.
CFPB Seeks Comments on Proposed Mortgage Servicing Rule
CFPB Seeks Servicing Agent Comments on Proposed Mortgage Servicing Rules. This is an important discussion for Service Providers who work for Mortgage Lenders
| LINK TO CFPB POST |
By Erik Durbin and Paul Rothstein – MAY 04, 2017
Today, we’ve released our plan to assess the effectiveness of the Real Estate Settlement Procedures Act (RESPA) mortgage servicing rule. We are asking the public to comment on our plan, to suggest sources of data, and generally to provide other information that would help with the assessment.
Mortgage loan servicers are typically responsible for several activities relating to mortgage loans such as:
- Processing loan payments
- Responding to borrower inquiries
- Keeping track of principal and interest paid
- Managing escrow accounts
- Reporting to investors
- Pursuing collection and loss mitigation activities (including foreclosures and loan modifications) under certain circumstances
In January 2013, the CFPB issued the 2013 RESPA Servicing Final Rule. We amended the rule a few times before it took effect, and we refer to all of the requirements and related amendments that took effect on January 10, 2014, as the RESPA mortgage servicing rule. This rule gave borrowers new consumer protections related to mortgage loan servicing, many of which were aimed at helping consumers who were having trouble making their mortgage payments.
The RESPA mortgage servicing rule requires, among other things, that servicers provide disclosures to borrowers related to force-placed insurance, respond to errors asserted by borrowers in a timely manner, and follow certain procedures related to loss mitigation applications and communications with borrowers. For example, servicers generally must acknowledge written notices of error within five days and investigate and respond to the borrower in writing within 30 days. In general, the consumer protection purposes of RESPA include that servicers respond to borrower requests and complaints in a timely manner, maintain and provide accurate information, help borrowers avoid unwarranted or unnecessary costs and fees, and facilitate review for foreclosure avoidance options.
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) requires us to review some of our rules within five years after they take effect. These formal reviews are called assessments. We are conducting an assessment of the RESPA mortgage servicing rule, and we will issue a report of the assessment by January 2019. As required by law, the assessment will address the rule’s effectiveness in meeting the purposes and objectives of title X of the Dodd-Frank Act and the specific goals of the rule, using available evidence and data. We recently released our plan for the remittance rule assessment, as well.
We see conducting the assessment as an opportunity. Conducting the assessment will advance our knowledge of the benefits and costs of the key requirements of the RESPA mortgage servicing rule. The assessment will also provide the public with information on the mortgage servicing market, and help us to fulfill our commitment to be an evidence-based and effective agency.
We would like your help in improving the assessment.
We invite consumers, consumer advocates, housing counselors, mortgage loan servicers, industry representatives, and other interested parties to comment on our assessment plan. Comments can suggest sources of data, offer other recommendations, and generally provide information that would help us understand the rule’s effectiveness or improve this important work.
We are committed to well-tailored and effective regulations and have sought to carefully calibrate our efforts to ensure consistency with respect to consumer financial protections across the financial services marketplace.
Comments on the plan will be due 60 days after it is published in the Federal Register.
Learn more about your options and rights related to mortgage loans.
For more information on how to comply with the Bureau’s mortgage servicing rules, visit our implementation and guidance page.
Topics:
Join the conversation. Follow CFPB on Twitter and Facebook .
SEC Addresses Important Cyber-Security Measures for Service Providers
I just completed my PCI Compliance ( Payment Card Industry Data Security Standards report that requires specific security and use of qualified vendors who accept credit card payments on our behalf.) So data security has been on my plate and on my mind. I was particularly concerned after hearing about the recent ransom-ware attack that affected business, governments, hospitals and other entities computers in 75 countries including the US…. Scary stuff.
So it seems important to pass on the new SEC information on cyber-security.
“The staff observed a wide range of information security practices, procedures and controls across registrants that may be tailored to the firms’ operations, lines of business, risk profile and size,” as well as “firm practices during this Initiative that the staff believes may be particularly relevant to smaller registrants in relation to the recent WannaCry ransomware incident.”
Key findings from the examination, as reported in the alert, are as follows:
- Cyberrisk assessment: “5 percent of broker-dealers and 26 percent of advisers and funds (collectively, ‘investment management firms’) examined did not conduct periodic risk assessments of critical systems to identify cybersecurity threats, vulnerabilities, and the potential business consequences.”
- Penetration tests: “5 percent of broker-dealers and 57 percent of the investment management firms examined did not conduct penetration tests and vulnerability scans on systems that the firms considered to be critical.”
- System maintenance: “All broker-dealers and 96 percent of investment management firms examined have a process in place for ensuring regular system maintenance, including the installation of software patches to address security vulnerabilities. However, 10 percent of the broker-dealers and 4 percent of investment management firms examined had a significant number of critical and high-risk security patches that were missing important updates.”
The SEC also noted that the Financial Industry Regulatory Authority (FINRA) has created a webpage with links to resources related to cybersecurity. It includes a cybersecurity checklist for small firms and a report on cybersecurity practices, which highlights effective practices for strengthening cybersecurity programs.
It is estimated that the ransomware attack affected more than 200,000 computers in about 150 countries, beginning May 12. The malicious software is known as “WannaCry,” “WCry” and “Wanna Decryptor,” which works by encrypting files and demands payment from users to regain access to their data.
“Initial reports indicate that the hacker or hacking group behind the attack is gaining access to enterprise servers either through Microsoft Remote Desktop Protocol (RDP) compromise or the exploitation of a critical Windows Server Message Block version 1 vulnerability,” the alert states. “Some networks have also been affected through phishing emails and malicious websites.
“To protect against the WannaCry ransomware, broker-dealers and investment management firms are encouraged to:
(1) review the alert published by the United States Department of Homeland Security’s Computer Emergency Readiness Team and
(2) evaluate whether applicable Microsoft patches for Windows XP, Windows 8, and Windows Server 2003 operating systems are properly and timely installed.”
MN Dept Commerce New E-license Website
The Minnesota Department of Commerce has a new e-license Website regarding Closing Agent Licenses, look here for info: https://mn.gov/elicense/a-z/?id=1083231369#/list/appId//filterType//filterValue//page/1/sort//order/
For the Abstracter Licensing the new e-license link is: https://mn.gov/elicense/a-z/#/list/appId/0/filterType/Subject/filterValue/Abstracters/page/1/sort//order/
Best Laid Plans
I certainly planned to have the NEW, updated abstract course online by now, but with some surgery and other family issues it has been delayed a bit. Not sure when life will fall back to normal, but hope to soon be back on target. Thanks for your patience, and please call or email with questions.
Latest Comments