Commercial Real Estate Blog by Madison
Tag Archives: CFPB

Let’s Go CFPB!

By Sam Shiel, Esq., Director of National Title Services and Senior Underwriting Counsel, Madison Title Agency

At the time of this writing, the Green Bay Packers are heading to the NFL playoffs with a record of 10-6. While the team’s record is reason for most Packer fans to rejoice, certainly there are some fans with more on their mind. Specifically, members of the Orlando-based fan club, the Central Florida Packer Backers (CFPB). But for those members of the CFPB purchasing a home in Florida, “fun” is hardly the word that comes to mind these days.

Since September 2, 2014, home purchasing members of the CFPB, along with all other Florida home purchasers, have been subject to an additional title charge of $3.28. Why? It is to pay for the multimillion-dollar collapse of an Orlando title company.

Back in 2007, a Florida law firm formed a title company by the name of KEL Title Insurance Group (KEL) headquartered in Orlando – much like the CFPB. The company had written in excess of 10,000 title insurance policies. However, in October 2012, KEL was ordered into receivership for purposes of rehabilitation by the Courts. The partners of the law firm have denied any wrongdoing, blaming KEL Title’s problems on a fraud scheme by an unidentified rogue agent in South Florida who allegedly fabricated sales and stole escrow money. While KEL is no longer writing new or renewal insurance coverage, the company’s existing policies are not cancelled by the rehabilitation order and will continue in the ordinary course of business.

The result. Just months after the takeover by the state, KEL policy claims are skyrocketing and its cash is nearly gone Claims soared as homeowners discovered flawed sales closings and bogus title insurance sales. When the state took over in 2012, KEL had claim liabilities of $12.8 million and cash of $2.7 million, according to state records.

The solution?…. Continue reading

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My BFF – the CFPB

By Eli Young, Madison Title Agency

Are we still only in the beginning of the second quarter of 2014? Those of us living in the Banking and Insurance industries are tightly focused on August 2015, thanks to our new BFF – the Consumer Financial Protection Bureau (CFPB). Like any BFF, we want to stay as close as possible. With the CFPB’s rollout of their final integrated mortgage disclosure forms; we are closer than ever. A search through my emails for the term “mortgage disclosure” yielded an average of six or seven publications or organizations within our industry offering seminars, webinars or some sort of training to prepare ourselves for the big day in August 2015 when these new forms will be mandatory.

For those not familiar with the CFPB, let me introduce you to your new BFF. This acronym is not just for texting teenagers. It is essential for any professional in the financial industry. Continue reading

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Mortgage Fraud: Beware of Illegal Schemes

By: Elliot Zaks, Principal, Madison Commercial Real Estate Services

Mortgage fraud is a growing threat to the real estate industry. Although most people involved are honest, there are some borrowers, loan officers, title agents and attorneys engaging in criminal activity in order to make a quick buck. The real estate market is still suffering from the aftermath of the industry meltdown. Suspicious activity reports for mortgage-related fraud is climbing steadily each year, reaching 93,508 in 2011, versus the 46,717 reported in 2007.* While reporting suspicious activity is up, new technology has also made fraud easier than ever. Computer systems leave a window open for enterprising and technology-savvy criminals. All it takes is an Internet connection and a copy machine to produce a false Satisfaction of Mortgage document.

In a recent seminar hosted by the Madison Learning Center, the Vice President and Claims Director at one of the nation’s major title insurance underwriters discussed the various ramifications of mortgage fraud. Here are some of the most common scams now and some of the warning signs to spot potential fraud. Continue reading

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The Challenges of NPI. When Private Goes Public.

By: Eli Young

The financial industry is gearing up for the new regulations set forth by the Consumer Finance Protection Board or CFPB. Item #3 in a list of recommended best practices from ALTA advises companies to adopt and maintain a written privacy and information security program to protect Non-public Personal Information. While Non-public Personal Information (NPI) is commonly defined as a person’s name and birth date, social security number, or mother’s maiden name, the finance industry is buzzing with concern over what really constitutes NPI.

Technically speaking, NPI can refer to any information that is not readily available to the public, including details of financial transactions. The question is how far does NPI protection go? Continue reading

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