The Florida Land Title Association has been working overtime to safeguard our industry’s responsibilities in the settlement process. The land title industry’s responsibilities in conducting closings and issuing title insurance play a crucial role in protecting real property rights and making our real estate market one of the most envied in the world.
Our global leading industry allows real property to be sold and mortgaged with greater security and efficiency than in any other country. In the course of our normal lives it’s easy to overlook the importance of the service we perform in helping owners convey their property, home buyers to fulfill their dreams or industries to buy land for development. All of these transactions contribute to the prosperity of our economy and help all of us fulfill the American dream.
Internationally renowned economist Hernando De Soto is credited with the widely accepted thesis that the economic success of the United States relies on a clear system of property rights which are the basis for entrepreneurship and the creation of wealth and capital. DeSoto states “You are able to hold, transfer, assess and certify the value of such assets only through documents that have been legally authenticated by a global system of rules, procedures and standards. Ensuring that the relationship between those documents and each of the independent assets they represent is never debased requires a formidable system of legal property rights. That system produces the trust that allows credit and capital to flow and markets to work.”
Our role in examining the official records to determine insurable real property interests while applying complex rules affecting property rights such as court records in probate and guardianship cases, Florida’s constitutional protections for homestead property, bankruptcy proceedings, powers of attorney, divorce proceedings, and trusts while being wary for any indications of fraud serves an essential purpose. We are the unique and crucial factor in protecting real property rights and securing the interests of owners and mortgage lenders by examining these records to determine insurable interests, clear title objections, close in accordance with instructions (while working to prevent wire fraud) and indemnifying these parties through the title insurance policies we issue. The land title industry performs an essential role in the system DeSoto celebrates.
The FLTA has been working tirelessly advocating for our members on proposed legislation and regulatory issues to make sure our industry’s unique and vital services are safeguarded. Here’s a summary of the most prominent issues:
Remote Online Notarizations (“RON”) – The FLTA supports legislation authorizing remote online notarizations and is working to assure sufficient security procedures are included in the legislation. We are also working to clarify that separate line item charges can be made for fees associated with RON. This legislation is expected to pass the legislature.
Data Call Information Revisions – We are working with the OIR on revising the Data Call forms to both simplify and clarify the information requested. Our goal is to make compliance easier while obtaining more uniform responses. The promulgated rates will be based on the data call information received by the OIR so accurate, uniform reporting is essential. 2018 Data Call results are due May 31, 2019.
DFS Compliance Guidance – The DFS published a compliance guidance article on February 6th regarding third party closing fees. The FLTA became immediately involved due to questions raised by the article which led to the DFS publishing an enhanced compliance guidance on February 14th that clarified their position on this issue. An FLTA group of agents and insurers met with the DFS to discuss our concerns and better understand theirs. Read about the FLTA meeting with the DFS here.
The members of the FLTA provide the world’s leading real estate settlement services and are critical to the success of the real estate market. Protecting real property rights is what our industry does. Protecting our members role in the real estate settlement process is what the FLTA does. The FLTA is a strong advocate for title agents and insurers in Tallahassee and will continue to advocate and educate on their behalf. Our association is strong and we have every reason to be proud of our members and the crucial role they play in the success of our real estate market.
- 2019 FLTA President, Kevin Thomas
On March 5th, the Florida Legislature opened its 121st Regular Session. With several hundred bills now filed, which ones will make it through? Which ones will fall short on time? Which ones just won't be heard?
Without a doubt, there are so many unanswered questions as how this session will shape out and only time will tell. Here's how a couple bills fared this week that FLTA is tracking.
House Bill 409: Electronic Notarization
Also known as, Remote Online Notarization (RON), this bill authorizes online notarizations; specifies requirements & standards for performance of such online notarizations; requires Department of State to adopt rules by specified date.
The bill was scheduled to appear before its first committee (Civil Justice) in the House this week, but due to a full agenda the committee simply ran out of time and temporarily postponed (commonly referred to as TP’d) until their next meeting. It is now anticipated to appear next week. Following this meeting, the bill will go before 2 more committees (Transportation & Tourism and Judiciary) before going to the House floor.
The Senate version (SB 548) of this bill has not been added to their first committee agenda at this time. This bill, too, will be heard in 3 committees before going to the Senate floor.
Senate Bill 248: Public Records / Civilian Personnel Employed by a Law Enforcement Agency
This bill focuses on expanding exemptions from public records requirements for agency personnel information by defining the term “home addresses” for purposes of public records exemptions for personal identifying and location information of certain agency personnel and their family members; exempting personal identifying and location information of active or former civilian personnel employed by a law enforcement agency, and of spouses and children of such personnel, from public records requirements; providing for legislative review and repeal of the exemptions; providing statements of public necessity, etc.
This bill was heard for its 2nd committee hearing this week in the Senate and with concerns raised by the Title Industry in the challenges this can cause in identifying the chain of title, the bill has now been amended to allow the protected party to authorize a 3rd party (title agent) to obtain the original instrument without redaction on their behalf. The bill is now identical to the House version and will move to its final Senate committee, Rules. The House version has passed its committee meetings and awaits a hearing on the House Floor.
FLTA Legislative Tracking
Understanding the Department of Financial Services Guidance on Closing Service Fees
The Florida Department of Financial Services (Department) maintains a page on its website for publishing reminders regarding the Department’s interpretation of laws pertaining to title agents, “Compliance Information: Title Insurance Agents”. The Department tells us that these reminders, sometimes individually termed a Guidance, do not “replace statutes, department rules, orders or case law.” The items published on this page are intended as reminders to help title agents comply with the law.
How We Arrived Here
The Department recently published Guidance followed by an enhanced Guidance relating to charges for “closing services” as defined in F.S. 627.7711. The enhanced Guidance can be found under the tab for Title Insurance Agency Fees on the above described Compliance Information page. Leadership of the Florida Land Title Association (FLTA) presented a written request for clarification to the Department regarding a possible interpretation in the original Guidance to the effect that all closing related charges, including third party charges, must be included in a single charge for closing services. The FLTA had concern the Department was stating third-party charges relating to the closing cannot be “passed through,” or charged directly to consumers on the closing disclosure or settlement statement. Following this request from the FLTA, the Department published the enhanced Guidance you will find on the Department website today to more clearly articulate the position maintained by the Department regarding charges for closing services and the title agent’s ability to charge consumers for third-party fees in addition to the charge for closing services.
Who Regulates What?
The Guidance states clearly that the Department does not regulate the amount of each fee charged at closing. The Guidance clarifies that while other regulators, such as the Consumer Financial Protection Bureau (CFPB), regulate charges included in a closing disclosure, the Department’s role is “making sure consumers are not deceived by our licensees when they purchase title insurance and close on a property.” The Department enforces the Unfair Insurance Trade Practices Act, the scope of which is defined in F.S. 626.9541. This includes deceptive practices relating to premium charges and services provided by title agents, including charges for closing services.
In the present market, title agents are faced with more and more third-party charges that, if incorporated into the charge for closing services would increase the charge significantly and may result in consumers paying for services that were not necessary for their closing. For example, not every closing involves a mobile notary. Delivery service charges vary between closings. There are more examples, but in summary we can conclude that every closing is unique, and the consumer is better served if some of the third-party charges related to closing are charged to the consumer based upon their circumstances.
FLTA Meets With DFS For Clarity and Next Steps
To obtain a clear understanding between the title industry and the Department regarding this important issue, the leadership of the FLTA, including the Executive Director and representatives of the Agent’s Section and the Insurer’s Section, met with Greg Thomas, Director of the Division of Insurance Agent and Agency Services, and his staff on February 22, 2019. The meeting had a friendly tone and the FLTA expressed appreciation to the Director and his staff for agreeing to meet with the FLTA representatives.
At the meeting, the Department again stated that it does not seek to regulate charges for closing services, including the practice of passing through third-party charges to consumers. We were reminded that the CFPB provides guidance on practices relating to charges contained in a closing disclosure. The Department stressed its focus is on deceptive practices, which was described in one example as quoting or advertising a low charge for closing services and then surprising the consumer with several third-party fees and “junk fees” immediately prior to or at closing. The Department confirmed for us that if all charges, including third party “pass through” charges, are disclosed to the consumer and agreed upon by the consumer while the consumer can still shop, then the Department is satisfied because the practice is not deceptive. The message from the Department was to treat consumers fairly by making sure the consumer is aware of charges in advance and agrees to the charges.
The Department recognizes that sometimes a last-minute charge is unavoidable. For example, a person may be snowbound in a city and a mobile notary becomes necessary. The Department does not have an issue with such a charge, and instead is focused upon deceptive practices, which is a pattern of activity. The Department did state that it might prosecute a single act if the act were egregious and harmful to the consumer.
Another issue addressed at the meeting was the practice of paying third party charges, such as a charge for a municipal lien search, outside of closing directly to the company providing the search. The Department stated that such practices may distort rate making through data calls if these charges are not listed on the closing disclosure or settlement statement as “Paid Outside Closing,” or “POC.” The Department noted that it does not directly regulate this practice if it’s not done in a deceptive manner, but the CFPB does regulate the practice of listing all charges related to the settlement on the closing disclosure.
Filing Complaints: Details are Important
Director Thomas pointed out that the Department regulates approximately 900,000 licensees and conducts more than 1000 audits per year, with a focus on identifying deceptive practices. The title industry is not singled out. The Department staff encourages the filing of complaints by licensees if a competitor’s deceptive practice is identified. While it’s possible to make a complaint anonymously, the Department asked that any complaint include the name and identifying information of the party being reported, along with a detailed description and documentary evidence, if available, in support of the complaint. The Department recognized that title agents do not control the entire settlement process, and often the offending parties may not be regulated by the Department. The Department will help to the extent it can and will refer violations to other regulators when appropriate.The Department can be reached directly for questions and complaints at Title@MyFloridaCFO.com.
The FLTA thanks Director Thomas and his staff for meeting with us and for the clarification of the Department’s position. While the Department stated that no further Guidance on this issue is being considered, we will continue to work to keep you informed regarding regulatory developments.
Your Association Hard at Work!
The above is not legal advice, should you have specific questions you should contact your counsel or DFS directly, firstname.lastname@example.org.
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DFS: Repeals and Replaces Interpretation
As you can imagine, this week has been very busy for FLTA. Following the initial posting of the interpretation of 3rd party fees we have hosted numerous meetings and conversations addressing our members' concerns. As a result, DFS has repealed their initial statement titled "Third Party Fees" and replaced it with an entirely different clarification titled "Title Insurance Agency Fees".
February 6: Initial "3rd Party Fees" statement posted
February 13: Posting removed
February 14: New "Title Insurance Agency Fees" statement posted
February 6: Initial "3rd Party Fees" statement posted
February 13: Posting removed
February 14: New "Title Insurance Agency Fees" statement posted
We applaud DFS's swift action and attention to this matter, and look forward to continued dialogue of working together.
Be sure to read and understand the new bulletin through these links:
Compliance Information: Title Agents
Compliance Information: Title Agencies
(Click "Title Insurance Agency Fees")
By: Nancy Baumann, Agents' Section Chair, Sun Title Insurance Agency
This is a challenging time of year for Florida Title Agents. In addition to having to constantly adjust to the continuing demands of rapidly changing technology, Cyber Security, Identity Theft, Fraud, Protection of Escrow Funds and for the last five years we have been struggling with the Dreaded Data Call.
What it is. The Florida Data Call for title agents was created in 2014 by the state’s Office of Insurance Regulation (OIR). Its stated purpose is to collect revenue, loss and expense data from every title agency in the state to assist the OIR in the analysis of title insurance premium rates, title search costs and the overall condition of the title insurance industry in Florida. Every one of us is required to maintain data on a calendar year basis and to submit this detailed financial information annually to the OIR not later than May 31 each year. So, data for the first applicable calendar year, 2014, was due June 1, 2015 and now it is due by May 31, 2019. Failure to timely submit all data required of an agent is punishable by fines, other penalties and even the potential loss of an agent’s license.
Those darned reports. The Office has promulgated forms we are required to use for our reporting. The reports require us to fit all of our financial data into accounts that the Office has defined. The earliest forms promulgated for the annual reports were confusing at best. We believe that led to the transmission to the OIR of inaccurate information. Since then, FLTA has provided technical expertise to the Office in an effort to make the data collection more accurate and to make compliance by us easier. Our work has seen results.
FLTA working for you. While Data Call compliance can still be burdensome, it has gotten better with the help of our association. Shelley Stewart is the chair of the FLTA Data Call Committee. She has spent many hours giving assistance to OIR in-person in Tallahassee, on the telephone and in emails. She has been working on and refining the reports the law requires of us. Her goals are to be sure the data collected reflects all the good work title agents do to earn their commissions and fees and to ease the burden on agents for data collection and reporting. In a 2015 report, OIR has referred to the input of FLTA agents and underwriters as “tremendous help.” View the recommended redline report by FLTA delivered to OIR earlier in January.
Don’t harm yourself. The National Association of Insurance Commissioners (NAIC) has noted that data calls in other states do not fully capture the agent experience as it pertains to items caught and corrected prior to issuance of a title insurance policy. That could lead to undercompensating insurance agents who could see the states cut their rates. At the specific request of title agents, most of whom are members of FLTA, the OIR included in its Data Call a Schedule B, designed to “capture the agent experience as it pertains to items caught and corrected prior to issuance of policy.” But, here is the rub: If agents do not take the time to fully prepare their respective Schedule Bs, that information will not make it into the Data Call, the regulators will not fully see what you do to earn your portion of the title insurance premium, and you could see your revenue being cut by the state. So, please, take every bit of your Data Call reporting seriously. Fully provide the information the report calls for. Your livelihood depends on it as does the health of the title industry in Florida.
More information. You can get the current Data Call forms from the Office of Insurance Regulation website and FLTA has also prepared webinars and other information to help you with your compliance with this law.
When a cyber security breach occurs whether hacking, spoofing, Business Email Compromise or other, alert the financial institutions followed by the FBI and local enforcement agencies. Be sure to log everything and use FLTA's Rapid Response Worksheet.
It is strongly encouraged to have a plan and assign roles ahead of time. Once an intrusion occurs every minute will count and each 24-hours that passes, the funds will be more difficult to recover.
On November 28, 2018, the Office of Insurance Regulation (OIR) hosted a workshop addressing the Agents' Data Call worksheet. The purpose was primarily for the public to provide input and comment for consideration to amend the Data Call. Following the workshop OIR opened a period of time for written responses to be received.
With the help of member input received over recent months, several FLTA members and FLTA consultants worked tirelessly to draft a redline revision. As a result, an official submission was delivered to OIR for consideration this week.
While many areas were reviewed for simplification or clarification, it was also recommended to omit certain areas. View the recommendations to stay in the know:
Letter to OIR
FLTA Redlined Data Call - Excel
From here, it is anticipated that OIR will consider the public submissions, draft their own revisions and then hold another public meeting for additional review and comment. The exact timing of this is not known at this time and these changes (should they be adopted) will not impact the current Data Call deadline of May 31, 2019 for 2018 data.
After hosting it's first committee meeting of the year, the Cyber Security Committee warns of a new Phishing Scam focused on title agents. With the use of email spoofing a member received an email from what appeared to be a local municipality requesting a proposal for several services related to the sale of deed restricted town homes. After contacting the presumed sender it was verified they had not been the sender of the email. It is not known what the outcome could have been had a response been given.
The Committee stresses the importance of verifying.
ALTA Advocacy Update
The Financial Crimes Enforcement Network (FinCEN) announced Nov. 15 the issuance of revised Geographic Targeting Orders (GTOs) that require U.S. title insurance companies to identify the natural persons behind shell companies used in all-cash purchases of residential real estate.
The purchase amount threshold, which previously varied by city, is now set at $300,000 for each covered metropolitan area. FinCEN is also requiring that covered purchases using virtual currencies be reported. FinCEN also is dropping the confidentiality provision and removing GTO coverage for purchases by trusts. The extended GTOs run from Nov. 17 through May 15, 2019.
Covered areas include:
FinCEN reported that previous GTOs provided valuable data on the purchase of residential real estate by persons implicated, or allegedly involved, in various illicit enterprises including foreign corruption, organized crime, fraud, narcotics trafficking and other violations. Reissuing the GTOs will further assist in tracking illicit funds and other criminal or illicit activity, as well as inform FinCEN’s future regulatory efforts in this sector.
Today’s GTOs cover certain counties within the following major U.S. metropolitan areas: Boston; Chicago; Dallas-Fort Worth; Honolulu; Las Vegas; Los Angeles; Miami; New York City; San Antonio; San Diego; San Francisco; and Seattle.
FinCEN praised the continued assistance and cooperation of the title insurance companies and ALTA in protecting the real estate markets from abuse by illicit actors.
A currency transaction report must be filed with FinCEN if these things occur:
The report must include:
If the purchase involved in the covered transaction is a limited liability company, the underwriter must provide the name, address and taxpayer identification number of all its members. Additionally, covered title companies must retain all records relating to compliance with the order for five years, store the records so they are accessible with a reasonable period of time and make the data available to FinCEN or other law enforcement or regulatory agency, upon request. Under the Bank Secrecy Act, covered businesses must retain all records relating to compliance with the GTOs for at least five years from the last day that the GTOs are effective (including any renewals).
ALTA has developed several tools to help members comply with the order.
Companies with questions can email FinCEN at FRC@FinCEN.gov.
We would like to update you on the status of events as it relates to ordinance 18-12 amending section 18-20.2 of the Miami | Dade County Code.
On November 8, 2018, the Miami Dade Board of County Commissioners passed an additional 120-day delay in implementing this ordinance allowing the Commissioner's office to continue to work with the real estate industry in search of a solution to meet the commission's needs. This shifts the implementation date to March 18, 2019.
You may read the revised ordinance implementing the 120-day delay here.
Email: Executive Director, Scott MerrittEmail: Executive Assistant, Jena Daly
Florida Land Title Association is a 501(c)6 not-for-profit organization.
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Mailing Address:Florida Land Title AssociationP.O. Box 66145St. Pete Beach, FL 33736