The title industry is yet another piece of the mortgage industry that has felt the effects of a prosperous housing market and new regulations and the Consumer Financial Protection Bureau (CFPB). Although the road has not been easy, title companies have managed to stay ahead of things by adapting to changes.
Marc Israel, President and Chief Counsel of MiT National Land Services sat down with MReport in an interview to discuss some of the top concerns that the title industry is dealing with in today's market.
See what Israel had to say below in this exclusive interview.
MReport: How do you feel about the CFPB’s ‘hot-button’ TRID regulation?
Israel: I hear many people who are unhappy or complaining about either the CFPB directly or just the mere fact that we will now have more regulation in general. I think they are wrong to complain. Although not everything that the CFPB does is going to be work I do think those of us in the industry should be honest and say that there was a real crisis in this country about seven or eight years ago, that the housing industry contributed to a lot of the crisis, and that changes needed to be made.
We should be big boys and girls and admit that there were some mess-ups and not complain when the government comes in and tries to straighten up some of the things that went on. The bottom line is that there is, and will continue to be more, regulation. So I think we, as an industry, should try to comply with the new rules as best we can and stop complaining and bellyaching. Of course, if CFPB insists on things that we find are not workable, we should go back to them, have a dialogue, and hopefully get into the groove where we can all coexist and fix things together as we go. Net-net, let’s just be honest and acknowledge that there are some major problems that had to be corrected.
As far as TRID is concerned, I have been teaching TRID classes to real estate and settlement attorneys and other real estate professionals and there’s no question that this rule is causing, and will continue to cause, a lot of hiccups for the first few months. I think we will get through them, and if the industry finds things that are not workable, I trust that the CFPB will make adjustments. I feel that any disruption from TRID will be temporary—not a long-term issue.
As an aside, I think originators are wisely also being cautious by slowing things down a bit and making sure that they don’t bite off more than they can chew with the new rules.
MReport: What do you think about the back and forth surrounding the TRID Grace Period? Will it happen or not?
Israel: For the life of me, I cannot understand the thinking in the White House about vetoing this bill. I think it’s a major mistake and a bit of political grandstanding by the White House. Personally, from speaking to my colleagues and attending industry events, I can tell you that there are literally thousands of people who are trying really hard, in ‘good faith’ to comply with the new rules.
It’s not so easy to turn an industry around and change all the software, policies and procedures, but there are a lot of people making a real effort to do so. So it seems really unfair to me to slap those people with fines and penalties in the first few months of TRID because they messed something up when they are trying in “good faith” to comply. Now, if you have a company that is not complying and intentionally violating the rules, that’s a different story. But people who are trying to comply should not be penalized and the White House should see beyond the politics and sign that common sense bill.
MReport: What’s driving mortgage industry growth right now? What role does the title industry play in this growth? Five-year outlook?
Israel: I am an optimist, I think the title industry is a great industry. It’s absolutely healthy. A recent earnings report for underwriters showed that three of the four big largest companies are all doing very well. My company is also thriving and growing like crazy. We are adding more business, more clients, and are looking to expand into new markets. I feel good about owning a title agency in today’s market.
I think when you have this kind of regulatory shake up in any industry, what happens is that the better companies rise to the top and it shakes out the bad players. I think that regulations rightly knock out a lot of players that are not operating at the highest level and this makes the industry better for everyone. As such, regulations, over the long-term, are going to help.
I don’t know where interest rates will go over the next five years, but I think that the long-term effect of CFPB regulation is going to result in a stronger, better, mortgage, real estate, and title industry. And barring some other economic factor that no one can foresee, in five years, both the title industry and the mortgage industry will be bigger and healthier. I feel positive going forward and think the industry is in really good shape.
MReport: Is there room for any future regulations and improvement in the housing market on top of the load the industry has now?
Israel: Yes, there is absolutely room for improvement. I cannot say what those changes are going to be but I think that as we live and breathe with these rules, it’s going to cause all sorts of changes that will come. The other change is going on all around us and will happen in our industry as well. And that is that everything is moving online. Everything is moving to websites. Everything is moving to apps. That is going to happen to us as well.
MReport: Speaking of technology, how will tech fare in the future housing market?
Israel: I talk a lot about technology and spend a lot of time with people who are doing all sorts of incredible things with tech in the mortgage space. There are already lenders out there that are shifting to online tech options. I am sure the big banks are not going to let tech slip by them and will jump in there as well.
I think what will happen is the industry is going to move online and into the cloud which will raise its own set of issues that will need to be addressed. And, in turn, the regulators and privacy advocates will need to address these problems. That’s the story of the world—things are always changing, change creates new issues, those issues need to be addressed, and on it goes!
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