Education

Reimagining Land Records and GIS


An event, “Reimagine Land Records – Join the Conversation” orchestrated by the Legislative Committee of the Minnesota State Bar Association, Real Property Section, took place on October 20th. In attendance were an assortment of County Recorders and other County Officials, Land Surveyors, Abstractors, Attorneys, GIS Specialists, Teachers, Land Records Information Systems (LIS) Software Companies and Title Companies.

The session started out with a slide as to what constitutes land records and it was broken down three general categories and who maintains the records and uses them.

Objects (Improvements – roads, physical easements, buildings, etc.
Land Rights (Ownership, estates, government rights, liens, easements, restrictions, etc.)
People (Title, liens that tie to people, etc.)

Discussion revolved around Layers of Information needed by land title specialists and how they can be mixed and used by all most effectively. We all have a stake in this – Homeland Security; FEMA; DOT; Federal, State and local authorities; and hundreds of other entities. My takeaway of the future from the event is as follows:

CLOSINGS OF THE FUTURE

In the not too distant future, we will feel light-years ahead of today. For those of us who remember typing abstracts on electric typewriters, and getting fax machines in the office, it is truly amazing. Even those who daily toil creating and printing documents, watching people sign, making copies of the signed documents, preparing them for delivery back to the lender and to the respective counties, cutting checks, etc. will see an amazing change.

THERE WILL BE NO PAPER. Documents and closings will be “Born Digital.” They will be created in a secure electronic commerce cyber-system, and emailed to the client through a secure web portal. The closer, a licensed, e-sign notary (perhaps hundreds of miles away from the clients,) will see the clients using a web-cam, review their drivers licenses against the online faces, and e-sign their notary as the clients click through, and e-sign the mortgage, deeds, and other documents.

NO PERSONAL HANDSHAKES when meeting, no paper, no file folders, no copies, no notary stamps or checks, just cyberspace. If owners need information, it will all reside in the cloud, or on their computer or flash drive.

THE FUTURE OF LAND RECORDS AND GIS

The digitally signed documents will then be electronically submitted back to the lender, with digital copies for the title company, and of course an e-signed digital copy will go directly to the appropriate county (with e-fees) where the documents will move though departments to verify, and reside digitally.

Someday, when the owner takes a future home equity line or sells the property, a title searcher will simply go to a computer to look up the digital documents in cyberspace. But there will be only one place to look up all needed information for each piece of real estate.

A Geographic Information System, accessed by a PIN number (a smart number that ties to Sec- Twp-Rng-1/4 -1/4 and parcel) will open up a Pandora’s Box of information. We will be able to access anything you can imagine about real estate – the physical properties of buildings; terrain; topography; zoning; ownership rights, title and interests; roads; utilities; flood information; zoning; Homeland security; layer after layer.

Records from the – Treasurer, Auditor and Assessor that include current and delinquent taxes (Green Acres, etc.); type of property (single family 3BR, 3BA, 2 story, 2300 sq ft….home); Register of Deeds and Registrar office information (with the ownership, restrictions, easements, mortgages, etc.); District Court files (showing judgments, divorces and court filings against the owners); Death and Probate Court documents; Health and Human Services information (maps of wells and lien information); Federal District Court filings; Dept. of Transportation (updates on roads and widening of streets); Department of Natural Resources; Wind farms; Detailed utility information; FEMA flood maps; City zoning data; Trash bills; Photos of the property with GIS overlays and on and on.

And the records will solve problems besides title searches for many – FEMA, 911, DOT, Homeland Security, Minnegasco, Xcel, public utilities, – when a hurricane or tornado blows through, FEMA can overlay the GIS of the hurricane and know the owners names and rough amount of damage to the property. 911 will have better access to helping people,, because they will estimate number of people impacted, where the nearest hospitals are, and fastest routes to get people there. The DOT will estimate road damage will know where to concentrate their efforts. Gas and electric companies will know where the gas and power are out, and how to proceed as quickly and effectively as possible to make needed repairs.

It’s hard to believe, but the pieces are already there, it’s just (just???) that all the pieces need to be joined into one access point. The future of GIS is coming and it will be interesting.

CFPB Announces Beta Launch of new HMDA Platform

The CFPB is pleased to announce the beta launch of the new HMDA Platform. The main objective of the beta release is to provide financial institutions an opportunity to become familiar with the HMDA Platform and, in particular, determine whether their sample LAR data complies with the reporting requirements outlined in the Filing Instructions Guide for HMDA data collected in 2017.  
The beta version of the HMDA Platform will allow financial institutions to establish test log-in credentials; upload sample HMDA files and perform validation on their data; receive edit reports; allow users to confirm their test data submission; and conclude the test HMDA filing process.
During the beta period, financial institutions may test and retest as often as desired. All test accounts created and test data uploaded during the beta period will be removed from the system when the filing period opens in January 2018.
Check out the beta version of the HMDA Platform: https://ffiec.cfpb.gov

During the beta period, we encourage financial institutions to provide feedback on their experiences using the HMDA Platform to [email protected]

CFPB Charges Title Company with $1.25 million Dollar Fine

The CFPB takes RESPA matters seriously. While many states, like Minnesota, require a disclosure form describing the relationship between lenders, real estate agents, title companies, appraisers, etc., those who do not disclose those relationships are up for serious fines.
Read the full article here CFBP RELEASE

CFPB Issues Summary of Changes and Clarifications to TRID

To support implementation of the recently issued 2017 TILA-RESPA Rule, the Bureau has issued a Detailed Summary of Changes and Clarifications.

You can access the Detailed Summary of Changes and Clarifications here.

FinCEN Advisory on Money Laundering Scams

FinCEN Advisory

See Advisory HERE

Lender Sues Specialty Insurer for Cyberspace Crime

A California-based mortgage company hit its insurer with a lawsuit in a New York federal court Tuesday seeking to recoup under a $3 million policy “substantial” losses incurred when an impostor duped the mortgage lender into wiring money for a nonexistent transaction.
American Pacific Mortgage Corp. asserts that Aspen Specialty Insurance Company must indemnify it for a cyberattack that resulted in an employee wiring more than $75,000 to a fictional company.

More here at Housing Wire

Last year, the Federal Trade Commission and the National Association of Realtors issued a warning to people interested in buying a home that scammers were posing as real estate agents, Realtors and title insurance companies to steal consumers’ closing costs.
And earlier this year, the FTC and NAR reissued that same warning because similar scams are still taking place.
In these scams, hackers take over the email accounts of homebuyers, real estate agents, lenders or Realtors. They obtain information about upcoming real estate transactions and send an email to the homebuyer, pretending to be the real estate agent or the title company that’s being used for the closing.

The email tells the buyer that there has been a last-minute change to the wiring instructions, and instructs the buyer to wire their closing costs to a different account – one controlled by the hacker. Then, once the buyer sends the money to the scammer’s account, the money disappears.

Do you have Cyber Insurance?

E-Recording Continues to Grow at Rapid Pace

Technology
Thursday, August 10, 2017

Since the start of the second quarter, CSC has added 61 counties in 25 states to its eRecording network, the company announced.

“By partnering with CSC, these counties and their clients will now enjoy the benefits of award-winning service from an industry pioneer,” CSC Sales Director Kevin Kinderman said in a release. “We provide a total recording solution through our eRecording network and our national paper recording services. We’re looking forward to making our county and submitter partners’ lives easier.”

The new counties are in Arkansas, Florida, Idaho, Illinois, Indiana, Georgia, Kansas, Louisiana, Michigan, Minnesota, Nebraska, New Hampshire, Nevada, New Mexico, New York, North Carolina, Oklahoma, Ohio, Oregon, Pennsylvania, South Dakota, Texas, Virginia, Wisconsin and Wyoming.

Protect Your Money from Wire Fraud Schemes – ALTA Video

Buying and selling a home is an exciting time, but there can be pitfalls for unsuspecting consumers . The American Land Title Association wants homeowners and sellers to be aware that criminals are using wire fraud schemes to steal money meant for home purchases or the proceeds from the sale of the property. Watch this video for four tips to protect your money and advice for what to do if you’ve been targeted by a scam.

See the ALTA VIDEO HERE

CFPB Loses Case Over RESPA

A lawsuit brought by the Consumer Financial Protection Bureau against a Louisville law firm was dismissed on Friday.

In a summary judgment ruling, the U.S. District Court for the Western District of Kentucky found that law firm Borders & Borders PLC followed the Real Estate Settlement Procedures Act (RESPA) while operating title insurance agencies from 2006 to 2011, according to a NEWS release.

Morgan Ward, a partner with Stites & Harbison PLLC and one of the attorneys who defended Borders & Borders, said: “The CFPB was overreaching, and it’s unfair to target a small firm as part of a regulatory agenda.”

The case “appears to be the CFPB’s first loss on the merits at the federal trial court level,” according to the release.

The CFPB sued Borders & Borders in 2013 after the firm refused to agree with a punitive consent decree levied by the agency. The CFPB alleged that the firm and principals Harry Borders, John Borders Jr. and J. David Borders accepted kickbacks in exchange for referrals of real-estate closing services.

Borders & Borders operated nine title insurance agencies as joint ventures with local real estate and mortgage brokerage companies, according to the lawsuit, as was allowed under RESPA’s safe harbor for affiliated business arrangements. Those companies referred home buyers to Borders & Borders for settlement services, and the firm then would have the title insurance issued by one of the joint ventures.

The profits from the arrangement were split among the title insurance agencies’ owners — Borders & Borders, its principals and the referring company, according to the lawsuit.

Morgan Ward, a partner with Stites & Harbison PLLC and one of the attorneys who defended Borders & Borders, said that under RESPA, it is illegal to pay for referrals unless the law firm and mortgage broker share owners, as was the case with Borders & Borders. Consumers also must be aware of and agree with the arrangement.

Ward said the CFPB viewed RESPA’s safe harbor for affiliated business arrangements as a loophole and decided to try to close it through the courts instead of going to Congress to change the law.

“This really was a David versus Goliath kind of case,” Ward said. The CFPB “tried to send a chilling effect to the marketplace by punishing a family-owned local law firm.”

At First Look Emails Seem Legitimate

At first glance the emails look legitimate.

But businesses get defrauded of millions of dollars daily by people using spoof emails and other false documents to steal funds, said Randy Roewe, chief risk officer for First Financial Bank.

“We get things from time to time that look exactly like a company logo,” said Darren Faulk, who is in business development for Stewart Title Co.’s Cleburne office.

With these spoofed emails, however, there is always something off with them, he said. “Title companies get targeted more than anybody because we’re moving large amounts of funds.”

Because transactions could be moving millions of dollars electronically, title companies have to be extra vigilant about security, from verifying information to keeping information private, Faulk said.

‘We do everything possible to keep things secure,” he said.

Electronic crime has become such a big business, Roewe said, the FBI has developed the Internet Crime Complaint Center — or IC3 — to track electronic crime. Over the last three years, businesses in the U.S. have lost $1.5 billion to internet fraud.

Much of the money being lost is going to Asia, especially China, although the United Kingdom is also becoming prominent, he said.

Email fraud is one of the most prevalent ways businesses get defrauded of money, Roewe said. Nationally, title companies are some of the hardest hit, losing more than $17 million last year.

But every business, from legal services to food service and manufacturing, is vulnerable to losses, he said.

By stealing basic information through company websites and tracking social media, crooks determine who to target and impersonate in an email to perpetrate their scams, Roewe said.

Usually, compromised email attacks will come in the form of electronic funds transfer requests, he said. Such transactions go so fast, they are hard to catch.

“We encourage you to use electronic funds transfer,” he said, but when using any banking service businesses have to be aware of risks and how to manage them.

These emails might appear legitimate, he said, and the criminals usually pose as a CEO or other executive but the emails will usually come from a look-a-like domain camouflaged by as few as one or two letters off the real site. The crooks might alter a domain like “payme.com” to “payrne.com” that at a quick glance might look like the real thing.

They also might leave clues in subject lines or in the body of the email itself, he said. Usually messages and subject lines contain a sense of urgency in the request or a request for secrecy.

When checking email from a phone, if a request comes in from a CEO or executive, it’s usually good to double-check on a computer to see the actual address the email is coming from, he said.

Besides using fake emails, criminals also create fake invoices or concoct elaborate stories to steal money, he said. Like fake emails, fake invoices might look legitimate, using company logos or real names, but will be off in some way, usually through account numbers.

Thieves will concoct elaborate stories to attract third party “mules” to have money sent through them for part of the cut, he said. Work from home offers are also usually to good to be true scams to get people to release their information.

The thieves are sophisticated, he said. With one recent scam the bank discovered, for instance, a Houston title company was sent a money transfer request, one that looked completely legitimate, using the same language used in transfer and even a real routing number to an account at a bank in Ohio.

What clued the title company into the scam was the routing number — it was for a personal rather than business account, he said. The company had checked and confirmed with the bank in Ohio that the account stood out.

It’s through diligent action like checking and confirming and coaching employees to recognize fraud that will save businesses from its headaches.

Implementing dual controls — where two people are responsible for one operation — is one of the best ways to deter fraud, he said.

While email and other electronic fraud are prominent, checks are still used to commit fraud, said Daniel Neely, First Financial Senior Vice President of Treasury Management Solutions.

Checks can be altered or forged or counterfeited, he said, and as with other forms of fraud, diligent checking and confirming will help prevent loss. He recommended reconciling accounts daily as a way not only of keeping books current but of checking for fraud.

But most important, knowing who you’re doing business with will lower risks, he said.

Info On Home Closing

Home Closing 101: An Educational Initiative of the American Land Title Association