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  • The historic mortgage rates data prior to the PMMS is located: Finres/nothaft/mirs/Monthly rtaes-Jan 1963.xls It is difficult imagining that mortgages rates did get as low as they did in mid June of this year. The rapid rally that took place ever since the beginning of the year and and incredible refi boom that ensued is perhaps going to be the stuff that we talk about for years to come. We see the ten year constant maturity Treasury at approximately 4.6% and the 30 year conventional mortgage at about 6.5% by the end of the second quarter of ’04.
  • PPT

    1. 1. Florida Association of Courts Clerks Mark A. Monacelli Tampa, Florida April 20, 2005 The Land Records Industry-A National Perspective
    2. 2. Stress Test
    3. 4. Today’s Session <ul><li>Industry Background & Changes </li></ul><ul><li>Mortgage Fraud </li></ul><ul><li>Property Records Industry Association </li></ul><ul><li>Property Records Education Partners </li></ul><ul><li>Identity Theft </li></ul>
    4. 6. Tunnel Vision… Develop a Level of Understanding …
    5. 7. We have become a nation of labels, special interest & division…
    6. 8. We Are In This Together! Lenders Recorders Secondary Market Underwriting Title Escrow Servicing
    7. 9. Lets take a look at the industry… Ironically, before emergence of the secondary mortgage market in the late 1960’s, the typical mortgage transaction was virtually paperless-involving fewer than a half-dozen documents from application through closing. The local lender provided funds for homeownership from the net savings of local depositors, and was mainly in the business of taking risk on its own… Today, by contrast, the lender simply connects borrower demand to the capital markets as an efficient information packager to create liquid, high quality investment instruments… Mortgage Banking Magazine, March 2002
    8. 10. Operational risk, has skyrocketed. In today’s world it is much more complicated to fulfill the transaction… An unfortunate byproduct of the modern process is that for every mortgage we originate, we kill a tree… The typical loan destined for the capital markets compromises more than 200 original documents that must be ultimately handled by people… Mortgage Banking Magazine 2002
    9. 11. It is the mounting cost, inconvenience and annoyance of handling all the paper-the printing, requesting, receiving, filing, retrieving, duplication, triplication, faxing, shipping, filing again, losing, finding, reshipping, validating, reading, pretending to read, auditing, and archiving-that has everyone looking for a better way. Mortgage Banking Magazine 2002
    10. 12. <ul><li>In the late 1970’s Prime Rate was 21.5%-Recession! </li></ul><ul><li>The term “creative financing” was “created” </li></ul><ul><li>Home values increased dramatically during the recovery period </li></ul><ul><li>The 30 year mortgage became standard </li></ul><ul><li>No longer did your mortgage stay on main street </li></ul><ul><li>The mortgage is assigned to a larger financial institution </li></ul><ul><li>Bundled and sold as mortgage backed securities </li></ul><ul><li>Mortgage Lenders/Mortgage Brokers (Originators) </li></ul>Secondary Mortgage Market
    11. 13. Mortgage Rates Are the Lowest in 45 Years Source: American Council of Life Insurers (ACLI), Freddie Mac (PMMS), Federal Reserve Interest Rate (Percent) Single-Family Multifamily 10-Year Treasury Forecast June 2003 3.33% July 13, 2003 5 5.21% % 0.5 points .s July 1958 3.20% July 1965 5.80% . % 0.5 points
    12. 14. In the good ol’ days there was one type of mortgage…
    13. 15. Types of Mortgages Today! <ul><li>30,20,15 & 10 Fixed Rate </li></ul><ul><li>30,20,15 & 10 Fixed Rate with a 2/1 Buy Down </li></ul><ul><li>1 Year Adjustable </li></ul><ul><li>1 Year Convertible Arm </li></ul><ul><li>2/1 Arm </li></ul><ul><li>3/1 Arm </li></ul><ul><li>5/1 Arm </li></ul><ul><li>7/1 Arm </li></ul><ul><li>7/1 Convertible </li></ul><ul><li>5/25 Balloon </li></ul><ul><li>7/23 Balloon </li></ul><ul><li>7/23 Balloon with 2/1 Buy down </li></ul><ul><li>Home Equity </li></ul><ul><li>Land Purchase Loans </li></ul><ul><li>97% Community Homebuyer </li></ul><ul><li>Construction </li></ul><ul><li>Interest Only </li></ul><ul><li>Plus Many More… </li></ul>
    14. 16. U.S. Mortgage Activity $ trillion
    15. 17. Document Rejection Costs <ul><li>2002 - 102 million transactions recorded </li></ul><ul><li>Average rejection rate 12.5% </li></ul><ul><li>$50 per rejection </li></ul><ul><ul><li>$40 Private Sector & $10 Public Sector </li></ul></ul><ul><li>$637,500,000 </li></ul><ul><li>Cost to one PRIA Member </li></ul><ul><ul><li>$1.03 per document or $634,140 per year </li></ul></ul>
    16. 18. In order to sell a loan there are 4 Requirements… <ul><li>Note </li></ul><ul><li>HUD 1 Statement </li></ul><ul><li>Title Insurance Policy </li></ul><ul><li>Recorded Mortgage </li></ul>
    17. 19. Industry Changes <ul><li>Where once real estate was bought and sold by the section or 40 acre parcel, it is now bought and sold by the square foot </li></ul><ul><li>Not only are the surface rights conveyed, but the sub-surface, air rights and water rights are sold as well </li></ul><ul><li>From land, homes and farms to time shares, cooperatives, and condominiums/planned communities, dockominiums… </li></ul><ul><li>Real Estate Attorneys are becoming more and more creative in transferring title from one party to another </li></ul><ul><li>Global positioning satellites are indicating to land owners that they may not own the land that is legally described in their deed </li></ul>
    18. 20. Industry Changes <ul><li>On average, the number of documents recorded has increased by approximately 250% + in the last 10 years </li></ul><ul><li>The number of pages per document has increased </li></ul><ul><li>Where once the bulk of documents arrived from within the county/state, they now arrive from all over the U.S. and world </li></ul><ul><li>A few years ago, loan origination to closing averaged 60 to 90 days, now can be one week or less… </li></ul><ul><li>The Internet directs you to the courthouse for information </li></ul><ul><li>eMortgages, eRecording, etc. </li></ul><ul><li>Change is going on all around us = choice! </li></ul>
    19. 21. Industry Changes <ul><li>On average, the number of documents recorded has increased by approximately 250% + in the last 10 years </li></ul><ul><li>The number of pages per document has increased </li></ul><ul><li>Where once the bulk of documents arrived from within the county/state, they now arrive from all over the U.S. and world </li></ul><ul><li>A few years ago, loan origination to closing averaged 60 to 90 days, now can be one week or less… </li></ul><ul><li>The Internet directs you to the courthouse for information </li></ul><ul><li>eMortgages, eRecording, etc. </li></ul><ul><li>Change is going on all around us = choice! </li></ul>
    20. 22. Government must do more with less …
    21. 23. “ Provides an opportunity to develop standards and create alliances ” “ Electronic Evolution”
    22. 24. “ We sometimes have a tendency to take things for granted or to forget industry past!”
    23. 25. PRIA <ul><li>PRIJTF created in 1998 </li></ul><ul><li>PRIJTF Converted to the Property Records Industry Association (PRIA) </li></ul><ul><li>in August of 2002 </li></ul><ul><ul><li>501c3 Non Profit Corporation Public/Private Partnership </li></ul></ul><ul><li>PRIA is a standard setting organization </li></ul>It is the Industry that binds us; It is the Partnership that unites us
    24. 26. PRIA Accomplishments & Projects in the works <ul><li>Real Estate Document Formatting………… ( Complete ) </li></ul><ul><li>Indexing Standards………….. ( C ) </li></ul><ul><li>Notary Standards………….. ( C ) </li></ul><ul><li>Recorders Guide to Revised Article 9…………. ( C ) </li></ul><ul><li>Model Electronic Recording Act………… ( C ) </li></ul><ul><li>Mortgage Satisfaction Act……….… ( C ) </li></ul><ul><li>Records Access Policy Committee……………. ( Active ) </li></ul><ul><ul><li>Military Discharge (DD14)….……….. ( C ) </li></ul></ul><ul><ul><li>Privacy Access Work Group….…….. ( A ) </li></ul></ul><ul><ul><ul><li>SSNs and the Internet </li></ul></ul></ul><ul><li>Electronic Recording Standards………… ( A ) </li></ul><ul><li>eNotarization and Notary Requirements ………………….. ( A ) </li></ul><ul><li>First Page Indexing Requirments………… ( A ) </li></ul><ul><li>Parcel Code Review Committee ( A ) </li></ul><ul><li>State Advisory Council (SAC)……….. ( A ) </li></ul><ul><li>Backup and Disaster Recovery Workgroup…………. ( A ) </li></ul><ul><li>Property Education Partners Project (PREP)…………….. ( A ) </li></ul>
    25. 27. First Page Indexing Layout   “ Return to” Party Information Area   “ Registry/Recorded” Information Area     “ Prepared by” Party Information Area       Document “Caption” (Name)   “ Grantor” Information Area   “ Grantee” Information Area   “ Subject Property/Legal Description” Information Area   “ Meaning and Intended Clause” Information Area   “ Associated & Referenced Document” Information Area   “ Additional Names” Information Area
    26. 28. <ul><li>REMEMBER </li></ul><ul><li>Transmitting documents electronically is another means of getting a document to the recorder. </li></ul><ul><li>We will still receive documents via the mail, title companies, closing agents, attorneys, over the counter, etc. Paper is not going away! </li></ul><ul><li>People are “down” on what they are not “up” on! LeAnne Tolley </li></ul>
    27. 29. How do we create standards? <ul><li>Build Alliances and Network </li></ul><ul><ul><li>American Land Title Association </li></ul></ul><ul><ul><li>American Escrow Association </li></ul></ul><ul><ul><li>Association of Title Information Management </li></ul></ul><ul><ul><li>NACRC/IACREOT </li></ul></ul><ul><ul><li>National Notary Organizations </li></ul></ul><ul><ul><li>Legal XML/OASIS </li></ul></ul><ul><ul><li>National Association of Secretaries of State </li></ul></ul><ul><ul><li>National Conference of Comm. on Uniform State Laws (NCCUSL) </li></ul></ul><ul><ul><li>American BAR Association </li></ul></ul><ul><ul><li>National Public Records Research Association </li></ul></ul><ul><ul><li>Property Appraisers Association </li></ul></ul><ul><ul><li>Government </li></ul></ul><ul><ul><li>Drill down to the states </li></ul></ul><ul><ul><li>Electronic Financial Services Council </li></ul></ul><ul><ul><li>SISAC </li></ul></ul><ul><ul><li>Mortgage Bankers Association </li></ul></ul><ul><ul><li>MISMO </li></ul></ul>
    28. 30. What does industry alignment look like?
    29. 31. Industry Alignment… Copyright 2004 Mortgage Industry Standards Maintenance Organization www.mismo.org How do we choose our ESIGN and UETA solutions? What should we be thinking about? How do we create and process eMortgage files? How is the business data defined? How do we plug all this into the County Recorder? How do we know this is the real eNote? MERS eNote Registry How do we know which digital sigs. to trust? SISAC
    30. 32. This is what it looks like!
    31. 33. “While technology creates new opportunities, technology also creates new challenges…”
    32. 34. Challenges… <ul><li>Posting information on the Internet </li></ul><ul><ul><li>Data & Document Images </li></ul></ul><ul><li>Security </li></ul><ul><li>Level of States’ involvement </li></ul><ul><li>Adherence and willingness to adopt standards </li></ul><ul><li>Rogue Public Officials </li></ul><ul><li>Rogue Vendors </li></ul><ul><li>Education, Education, Education… </li></ul>
    33. 35. PRIA Sponsors the…
    34. 36. PREP Survey <ul><li>383 Survey Responses </li></ul><ul><li>139 Title </li></ul><ul><li>107 Escrow </li></ul><ul><li>119 Recorders </li></ul><ul><li>17 Others </li></ul><ul><li>1 Skipped </li></ul>
    35. 37. PREP Survey <ul><li>Do you think a joint work group among escrow, title, and county recorders would be benefit in your area? </li></ul><ul><li>343 Yes </li></ul><ul><li>30 No </li></ul><ul><li>10 Skipped Question </li></ul><ul><li>90% Yes </li></ul>
    36. 38. PREP Survey <ul><li>Would you find value in educational opportunities among escrow, title and county recorders? </li></ul><ul><li>352 Yes </li></ul><ul><li>22 No </li></ul><ul><li>8 Skipped the question </li></ul><ul><li>93% </li></ul>
    37. 39. Minnesota Task Force Model <ul><li>Group formed in 1997 </li></ul><ul><li>Mission: “To ensure quality representation for the home buying public we need to improve communication between title industry and the counties to make this process easier.” </li></ul>
    38. 40. Why? <ul><li>The title companies were requesting the forum to discuss specific needs such as standardization, consistent recording procedures and reduced timing for recording. </li></ul><ul><li>The counties needed a forum to express concern over the document rejection rate. Also wanted a vehicle to communicate with the appropriate people in the industry. </li></ul>
    39. 41. Accomplishments <ul><li>Since 1997 held regular meetings every 6-8 weeks </li></ul><ul><li>Past years there been numerous joint education programs </li></ul><ul><li>Mutually support each others legislation </li></ul><ul><li>Shared detailed reports tracking document rejections, recording times, etc. </li></ul><ul><li>Effective forum to disseminate info., discuss changes/policies/procedures, etc. </li></ul>
    40. 42. PREP National Coordinator <ul><ul><ul><ul><ul><li>Ardis Schmitt </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>[email_address] </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>709.550.1708 </li></ul></ul></ul></ul></ul>
    41. 43. Identity Theft & Fraud <ul><li>“ Identity theft and identity fraud are terms used to refer to all types of crime in which someone wrongfully obtains another person’s personal data in some way that involves fraud or deception, typically for economic gain.” </li></ul>
    42. 44. Identity Theft & Fraud <ul><li>Identity Theft & Fraud is the fastest growing crime in the United States! </li></ul><ul><ul><li>27.3 million cases/complaints in last 5 years </li></ul></ul><ul><ul><ul><li>9.9 in 2003 </li></ul></ul></ul><ul><li>It is a face less crime! </li></ul><ul><li>It is a federal crime! </li></ul><ul><li>Criminals stock in trade is your transaction </li></ul>
    43. 45. The Social Security Number (SSN) was created in 1936 as a means of tracking workers’ earnings for Social Security Benefits.
    44. 46. Common Ways to Acquire Individuals Information <ul><li>Improper disposal of credit card applications </li></ul><ul><li>Mail boxes </li></ul><ul><li>Lost/stolen wallets and palm pilots, etc. </li></ul><ul><li>Dumpster diving </li></ul><ul><li>Internal operations </li></ul><ul><li>Telemarketing </li></ul><ul><li>Internet Phishing </li></ul><ul><li>File a change of address form </li></ul><ul><li>Credit Card Scanners </li></ul><ul><li>Obtain your credit report by posing as a land lord, employer, etc. </li></ul><ul><li>Our own negligence </li></ul>
    45. 47. Minimize Your Risk… <ul><li>Order a copy of your credit report </li></ul><ul><li>Place passwords on your credit cards, bank and phone accounts </li></ul><ul><li>Limit the # of credit cards you own </li></ul><ul><li>Do not give out information unless you initiated the transaction </li></ul><ul><li>Secure personal information in your home </li></ul><ul><li>Use initials and limit information on checks. Do not add account #’s </li></ul><ul><li>Cut up hotel keys </li></ul><ul><li>Ask about information security procedures in your work place </li></ul><ul><li>Only use secure websites </li></ul><ul><li>Copy information and limit information in your wallet/purse </li></ul><ul><li>Buy a shredder </li></ul><ul><li>Be aware and vigilant! </li></ul>
    46. 48. If you are a victim <ul><li>Place a fraud alert on your credit report- Equifax, Experian, TransUnion </li></ul><ul><li>Close any accounts that have been tampered with or opened fraudulently </li></ul><ul><li>Contact your local law enforcement agency </li></ul><ul><li>Call the ID Theft Hotline </li></ul><ul><ul><ul><li>877-438-4338 </li></ul></ul></ul>
    47. 49. PRIA Vision
    48. 50. Working Together We can make a difference! www.pria.us
    49. 51. Q & A Mark A. Monacelli Property Records Industry Association [email_address] 218.726.2675