d a t e s a h e a d eic is sixty years strong · 2013. 4. 3. · carlsbad, ca 92018-1069 (760)...

Publication of the Escrow Institute of California Winter/2007

EIC IS SIXTY YEARS STRONG

Dear EIC Member,

As we embark upon EIC’s 60 Year Anniversary celebration in San Diego thisspring, it is with great pride in our industry that I tell you the state of our associa-tion is strong.

This past year, the EIC Board and I have engaged in an ambitious plan to thor-oughly review all aspects of the organization, management and lobbyist func-tions. The goal is increase our membership and strengthen the effectiveness ofour association so that we can better represent the interests of our members toconsumers, as well as regulators and policy makers.

I want to take this opportunity to share with you the advancements we’ve madeas an association and the direction in which we are headed.

EIC has been fortunate this past year to have so many new members join theBoard of Directors with fresh ideas. Included in this newsletter is an organizationchart so that you can familiarize yourself with the people representing you andtheir areas of focus.

More than ever, membership in EIC provides an experienced network of peers foreach of us to draw upon. One of the most valuable aspects of my own member-ship in EIC is how much I’ve learned from so many of you at dinner meetingsabout how you handle the challenging world of escrow. As a small company, thispeer networking is gold to me and my business. As an EIC member, you alwayshave a network of peers just a phone call away.

It is an honor to serve as the Chair of EIC. Thank you for your commitment to ourindustry and the success of our association.

Sincerely,

P.J. Garcia

16

Escrow Institute News Winter 2007

ESCROW INSTITUTE OF CALIFORNIA

P.O. Box 1069Carlsbad, CA 92018-1069(760) 633-4EIC • FAX (760) 942-1048

Dated Material

PRSTSTDU.S. POSTAGE

PAIDENCINITAS, CAPERMIT NO. 363

D A T E S A H E A D

MARCH 8, 2007General Membership MeetingMission Inn3649 Mission Inn Avenue – Riverside

MAY 3 – 6, 2007Annual Spring ConferenceLoews Coronado Bay Resort – San Diego4000 Coronado Bay Road

JULY 12, 2007General Membership MeetingWest Los Angeles

Publisher: Tim Egan, President & CEO

Loews Coronado Bay Resort San Diego

3649 Mission Inn Avenue Riverside

8

Escrow Institute News Winter 2007 Escrow Institute News

9

Winter 2007

EIC/CEA RALLIES AGAINST GARAMENDIEIC/CEA RALLIES AGAINST GARAMENDI

Escrow Institute News

15

Winter 2007

2


New DOC Commissioner Takes Active Role in Escrow Issues

One of the expressed goals of the EIC Board is to rebuild our relationship with the Department ofCorporations into a more positive and collaborative working relationship. We are encouraged withthe response from DOC and with the response so far to the issues and initiatives we have broughtforward to the Department.

One of the bright spots of 2006 was Gov. Schwarzenegger’s appointment of the new Department ofCorporations Commissioner, Preston DuFauchard.

Tim Egan and I had the pleasure of meeting the Commissioner in September and were able to ac-quaint him with some of the more pressing issues facing the industry, including the proposed hostileregulatory initiative from DOI Commissioner John Garamendi and our concerns regarding “virtualescrow.” Since our meeting, the Commissioner helped organize an interagency team from DOC, DREand DOI to conduct a more thorough review of virtual escrow and the issues that surround thismodel.

Prior to his appointment, Mr. DuFauchard served as assistant general counsel for Bank of America,supervising securities litigation related to mergers, investment banking and broker dealer operationsfrom 1997 to 2005. In other words, we have a commissioner with some “real world” experience.

Most important to EIC is that the Commissioner has attended each of the Escrow Law Advisorymeetings upon being appointed. And he’s not just showing up, he’s actively engaged in theCommittee’s discussions and he’s listening. The Commissioner has offered some practical sugges-tions, including the idea of approaching DOI and DRE to do cross agency (joint) audits for companieswho run “controlled” licensed escrow companies.

Working with the Assistant Commissioner Louisa Broudy and Special Administrator Kathleen Partin,we were able to restart the highly popular DOC Management Class for senior licensed escrow per-sonnel. The response to the first class in January exceeded all expectations. Look for announcementsfrom EIC and the Department as to scheduling of future Management Classes.

The Department’s Office of Law & Legislation headed up by Deputy Commissioner Tim LeBas con-tinues to be very active in working with the Institute on mutual legislative and regulatory initiatives.Mr. LeBas and Tim Egan frequently meet to review and refine our strategy to seek legislation toestablish the standards for a “Uniform Escrow Law.” Like with any controversial big picture initia-tive, timing and the political will of the Legislature and the Governor to enact such legislation is key.We will continue this important campaign with the Department in 2007.

Escrow Law Advisory Committee Takes Action

The Escrow Law Advisory Committee took an aggressive role in 2006 to educate the DOC aboutimportant issues facing our industry, such as.

• Kickbacks through affiliated companies, which are not under DOC jurisdiction, that affect theability of the licensed industry to compete on a level playing field.

14


Attention EIC membership: Due to the great response for our September 18-28,2007 Fall FoliageCruise from New York to Canada, Princess Cruises has generously extended the booking depositdeadline to March 20, 2007!! Make your reservations fast before the incredibly low balcony pricedisappears!

Trip Itinerary

Sep 18 Sail from New York this evening Sep 24 Sydney, Nova Scotia 8am-5pmSep 19 Newport, Rhode Island 7am-4pm Sep 25 Charlottetown, Prince Edward Island 8am-5pmSep 20 Boston, Massachusetts 8am-5pm Sep 26 At seaSep 21 Bar Harbor, Maine 7am-6pm Sep 27 Quebec City 7am all day (overnight on ship)Sep 22 St John, New Brunswick 7am-3pm Sep 28 Quebec City disembark this morningSep 23 Halifax, Nova Scotia 8am-5pm

CATEGORY DESCRIPTION RATE/PERSONBC Stateroom w/balcony (232-274 ft.) $2465

Other categories are available, please call for prices.Call for pricing for air from your preferred point of departure.

INCLUDES:⇒ 10 days cruising the Grand Princess⇒ All port charges & taxes⇒ All on-board meals & entertainment

RESERVATIONS:A deposit of $450 per person is required toreserve your stateroom by March 20, 2007FINAL PAYMENT:Final payment is due by June 28, 2007

CANCELLATION POLICY:In addition to a $50/person cancellation administrative fee, the following cancellation penalties apply:75 to 57 days before departure .............. $450/person 28 to 15 days before departure ……......... 75%56 to 29 days before departure ............. 50% Less than 15 days before departure ……. 100%

Trip cancellation insurance is available and strongly recommended.For reservations/information call Dana Huckestein at Lewis Travel:

2788 W. Bullard Avenue2788 W. Bullard Avenue2788 W. Bullard Avenue2788 W. Bullard Avenue2788 W. Bullard AvenueFresno, California 93711Fresno, California 93711Fresno, California 93711Fresno, California 93711Fresno, California 93711

(800) 350-1872 or (559) 431-1800 cst #2008653-10

Disclaimer – Lewis Travel & Cruises (dba Wanderers – LT&C) acts as a sales agent for any airline, hotel, car-rentalcompany, tour operator, cruise line, or other service provider named in your itinerary (“Suppliers”). LT&C is notresponsible for acts of omissions of the Suppliers, their failure to provide services or adhere to their own schedules, theirfailure to pay any refund, or for any personal injury, property damage, or other loss, accident, delay, inconvenience, orirregularity which may be caused by any party not under LT&C’s control. By accepting this invoice or itinerary, youhereby agree to release LT&C from all claims arising out of any problem covered in this paragraph.


3

Winter 2007

• DOC’s position on buyer credits from brokers was reexamined and changed as a direct result ofthe activity on the Advisory Committee.

• Reverse Discrimination: Representatives are currently challenging the idea that a real estate lic-ensee cannot receive a discount to which they would otherwise be entitled as a member of thepublic at large.

• “Virtual Escrow” has been on the agenda at each and every meeting for over a year, and the resultis DOC/DRE and DOI have undertaken joint meetings to assess and address the issue.

• Reinstatement of the DOC Newsletter and Management classes: both appear to be back on tracknow, with one newsletter out and one Management class completed.

Expanding Our Influence and Building New Relationships

Another important goal this past year has been outreach to other industry groups at both the stateand national levels. Our intent is to open doors to collaborative ventures such as the cooperativeefforts to fight the Garamendi regulations with CEA and CLTA. We opposed the regulations for ourown reasons, but allied where it made sense to further our interests. Tim Egan and I also had a verypositive meeting with the California Association of Mortgage Brokers in 2006 and collaborations withvarious organizations are in discussion stages but are not yet ready for “prime time”.

The National Affairs Chair is a new position being filled by Genia Engelstad. This past year shetraveled to a number of national conferences to represent California’s independent licensed escrowindustry. Thanks to Genia, EIC now has a seat at the table where she’s able to provide input – for thefirst time – to the Mortgage Brokers Association and others who set the rules by which the rest of usmust live and work under. Included in this newsletter is Genia’s report on the recent AEA Sympo-sium.

As a result of the contacts she has made and the conversations she’s been a part of this past year,Genia came to the EIC Board to recommend that we approach AEA to amend their bylaws and allowEIC to join as a second chapter for California. This would give us direct representation on the na-tional level that isn’t filtered through CEA.

Similar efforts are underway to build strategic alliances with other trade associations like CLTA,ALTA, NNA, CAR, NAR and many other national and state business federations and groups. Themore we communicate and coordinate were appropriate with these other powerful interests, thebetter chance we stand to accomplish our goals and objectives.

The introduction of our newly designed and constantly evolving website has been and will continueto be a major tool for communication both with our members and with the various constituencies weare involved and serve.

Affiliate Members = Full Partners

In 2006, the Board of Directors established an Affiliate Committee with a board position for the Chair.The goal plain and simple is to make our Affiliate Members full partners in our association.


13

Winter 2007

GARCIA Re-Elected Chair for 2007

PJ Garcia of Beach Pacific Escrow was re-elected by the Board of Directors as Chair of the Insti-tute for 2007. Joining PJ on the 2007 Board will be:

Chair-elect: Judy Gooler Monrovia Escrows

First Vice Chairs: Genia Engelstad – National Affairs Elite Escrow Services of San DiegoSunny Maden – State Affairs South Hills Escrow Corp.

Second Vice Chair: Tina Thompson Silver Pines Escrow, Inc.

Third Vice Chair: Tricia Vagt Covina Escrow Company, Inc.

Secretary: Diane Binkerd Lake Ridge Escrow, Inc.

Treasurer: Beulah Stidham Madrona Park Escrow, Inc.

Directors: PJ Bremer Cardinal Pacific Escrow ServicesDave Brooks Canon Escrow, Inc.Judi Cunningham Crestwood Escrow ServiceMarina Flores Las Flores Escrow Co., Inc.Dee Lopez Renaissance Escrow, Inc.Edward Navarro Action EscrowNati Perez Citi Escrow Services, Inc.Aziz Valliani Bellflower Escrow Company

As always, members are welcomed to contact any Board member or EIC Headquarters to be-come involved in an Institute Committee or policy initiative.

4


Because we talk and interact with our Affiliate providers so often, their partnership in EIC is indis-pensable, and as I am reminded, the critical third leg of the stool – EIC/EAFC, DOC and IndustryAffiliates. Thank you to all our Affiliate Members for your support, commitment and friendship.

Moving Forward…

Over the past 60 years, EIC has been dedicated to promoting our members’ interests at every level ofthe industry, in every part of the state, as well as to represent and advocate the positions of the indus-try before the key political and policy leaders in Sacramento, Washington, D.C. and local county level.

We need to build on that success and expand the benefits of membership to include more educationalopportunities as well as benefits such as group purchasing plans that we can negotiate as an associa-tion to help our members. For example, we are following closely legislation before Congress that, ifenacted, would allow professional trade associations such as the Institute to organize and providegroup health insurance plans for its members, with the goal of cutting costs for each member of theAssociation.

We have an expansion of our Public Relations campaign in the final planning and production stages.Our 2006 efforts put EIC and the California licensed escrow industry on the map and radar of bothstate and national regulators and interest groups. Our 2007 goal is to bring those resources closer tohome and facilitate members in recreating that success locally for their own businesses.

Tina Thompson is our 2007 2nd Vice Chair. Her position today includes Education and Programs. Sheis busily assembling her team with her first order of business this year to seek high quality content forthe membership meetings and for the Spring Conference and to work with our Affiliate Memberpartners to create educational programs that bring added value to our members and their employees.It can’t be said too many times…our partnership with Affiliate Members is invaluable to the successof the Institute and our industry.

Our plan also includes a resumption of the various Specialist Group meetings. You may rememberfrom past years, previous groups were Management; Bulk Sales and Mobile Home. They were allvery popular and have been sorely missed.

As always, EIC will continue to closely monitor legislative and regulatory activity at the State andNational levels; and advocate and represent the industry as required. An example has been our yearlong battle with the Department of Insurance over its proposed title/escrow rate setting regulationswhich, if enacted, would seriously impact our members and industry. Please refer to our most recentletter to the new DOI Commissioner on this critical issue. The Institute Board understands the criticalrole we must play in most cases to defend the industry against unwanted assaults, i.e. Affiliate Busi-ness Arrangements/Bundling, proposed RESPA Reform, Garamendi Regulations, and many otherlegislative/regulatory challenges. With our members support we will fight for our industry and theparity we so deserve.

In closing, I would like to thank all of you for the expressions of support I have received over the pastyear. I would particularly like to the thank both the 2006 and the 2007 Boards of Directors, for theirwillingness to accept the challenges and opportunities I threw at them and not only rise to meet them,but in turn upped the ante and proposed even more and better ideas and expansions of their commit-ment to the Institute and industry.


5

Winter 2007

12


There was much discussion about conflicts of interest. Is there a conflict of interest when a loanbroker is also the real estate agent? Can the loan broker take the documents out for signing? Howabout when the loan broker also performs escrow services? Like Virtual Escrow? Most in the roomexcept those from California were not aware of the Virtual Escrow Model and believe me after it wasdiscussed, there was real concern. MBA and Wells Fargo expressed concern about this issue as well.I urged them to consider not allowing this conflict to exist. Don’t let one party perform all of thesefunctions. I don’t know that I made an impact with my statements, but there was a lot of note takingon the part of the panelists! I felt that their response was somewhat wishy washy… It is like we knowit is a problem and we don’t like it but what can we (the lenders) do? Wishy Washy!

ENotarization

The first speaker was Marc L. Aronson, President of the United States Notary Association. He is fromPennsylvania and was a clever speaker. Kind of brought some humor to the dry subject of notaries. Ithink we all need to get up to speed on such acronyms as UETA / PRIA / eSign / MISMO / SISAC etc.

Bill Anderson was also in attendance and he represented the view of the National Notary Associa-tion.

I believe that we as notaries and owners of small business need to really become aware of thesetrends and eNotary initiatives. I believe that perhaps a future Escrow Institute meeting should bedevoted to this with lots of time for hands-on experimenting with documents and how to perform aneNotary. What is an electronic credential? The Escrow Institute has formed a committee to researchthese issues and how they will impact us. If you are interested in participating, please contact me orTim Egan or PJ Garcia and we will get you signed up!

The Escrow Institute is committed to being a voice within the American Escrow Association. If theypurport to represent all settlement agents in America, then there must be a place for us, IndependentLicensees, at their table. We will keep you posted on our progress.

Did you know that the Minnesota Twins professional baseball team calls the Hubert H. HumphreyMetrodome in Minneapolis home? Not for long I take it, they are as we did in San Diego contemplat-ing a new ballpark. Anyway enough trivia already! Call me if you need more details about thewonderful state of Minnesota!

Respectfully submitted...your Board member-at-large,

Genia Engelstad

3rd

Vic

e-C

hair

Tric

ia V

agt

Trea

sure

rB

eula

h S

tidha

m2n

d V

ice-

Cha

irTi

na T

hom

pson

Secr

etar

yD

iane

Bin

kerd

1st V

ice-

Cha

irS

unny

Mad

enG

enia

Eng

elst

ad

Par

liam

enta

rian

Jud

y G

oole

r

Cha

irP

J G

arci

aW

ebsi

te

Com

mitt

eeD

OC

Issu

es

Com

mitt

eeP

ublic

Rel

atio

ns

& A

dver

tisin

g

Lega

l & L

eg.

FIR

PTA

* C

al

FIR

PTA

Issu

es

Com

mitt

ee

Inte

rnet

Esc

row

Fr

aud

RE

SP

A D

ocum

ents

R

evie

w C

omm

ittee

EP

AC

New

slet

ter

Edito

rial B

oard

Spe

cial

Eve

nts

Com

mitt

ee

Mem

bers

hip

Ret

entio

n &

Dev

elop

men

tB

udge

t & F

inan

ceB

y-La

ws

& S

tand

ing

Rul

es

Lobb

yist

Cap

ital

Rep

rese

ntat

ion

Man

agem

ent

Sm

ith&

Egan

A

ssoc

iate

s

Oth

er

Con

tract

ors

Boa

rd o

f Dire

ctor

s N

omin

atio

n

Cha

ir E

lect

Jud

y G

oole

r

Hos

pita

lity

Affi

liate

Com

mitt

ee

Mem

ber

Pub

licat

ions

Con

fere

nce

&G

M P

lann

ing

Com

mitt

eeR

ed =

Sta

ndin

g C

omm

ittee

sB

lue

= S

peci

al C

omm

ittee

s

Prin

t Dat

e: 0

2/14

/07

6


11

Winter 2007

MINNESOTA TRIVIA - DID YOU KNOW? - That the name Minneapolis comes from the Indianword “minne,” meaning water and the Greek word “polis,” which means city? The City of Minne-apolis has been nicknamed the City of the Lakes.

BACK TO BUSINESS - There was much discussion in the group that the lenders will have to adjusttheir pre-closing procedures. AEA and MBA will have to take a lead in educating the loan broker,funders, and processors as to the guidelines and what will be expected of each party to the transac-tion. It is the intention that the industry trade groups provide training to their members on the con-tent of the general closing instructions.

Version 21 of the General Instructions is now posted on line at the Escrow Institute Website http://escrowinstitute.org/. Please take the time to look at this document. Putting our head in the sand andthinking this DOES NOT effect us now is NOT how we should be handling this very important issue.Many lenders are NOW signing on to this proposed form and using them now. I suggest that youtake the time to read, review and comment on the form NOW!

Again the reasons for the proposed form:To add greater efficiency to the closing process (??)Add greater clarity as to who is responsible for whatProvides remedies for failure to complyChange industry behavior inherently subject to risk of fraudProvide a building block for electronic mortgages

Kenneth Markison commented that lenders would like states to have more UNIFORM notary laws.Like California he would like to see the rest of the country keep a journal of notarial acts along withsignatures and thumbprints.

He remarked again that MBA, the Mortgage Bankers Association, is committed to electronic storageof documents, therefore electronic documents and signings are not too far away!

Stephen D. Morrison commented that White Collar crime is the fastest growing CRIME in the UnitedStates. The losses are in the BILLIONS of dollars.

I got the impression once again that the lenders want us to be their eyes and ears. They want us toreport things such as double escrows, flips, equity skimming, suspicious activity, forgeries, silentseconds, changes to the borrowers finances, changes in title, changes to the sales contract, etc. just toname a FEW of the items that we are will/be required to report. Now I am all for being a watch dog,but what are they (the lenders) responsible for? YIKES!

A couple of suggestions that I made about the new closing instructions:

1. Do not refer to an impound account as an “Escrow” Account. I think consumers are con-fused by this. We are an escrow company we DO NOT collect and hold impounds.

2. I requested that a settlement agent NOT be “lumped” in with title fees. I/WE are not a titlecompany. I am an independent escrow company and I perform escrow services.

There was some discussion that the changes need to be made to the HUD RESPA form. I say let’sstart here and work on it!

10


AMERICAN ESCROW ASSOCIATIONSymposium 2007 – Minneapolis, MN - January 19, 2007

By Genia Engelstad – Vice Chair, National Affairs

A goal that the Board of Directors set for this year is a more active role in the American Escrow Asso-ciation. Some of you may remember that I attended the AEA Conference in Reno last year represent-ing the Escrow Institute. As a continuation of my role as 2007 First Vice Chair-National Affairs, Iattended the AEA Symposium in Minnesota. Now many of you may be asking yourselves WHY?Why Minnesota? Why January? Well I just don’t know. I do know that some of the nicest folks inthe country live in the Midwest! Everyone in Minneapolis was gracious, kind, thoughtful, informedand really welcomed this Southern California Girl! The HIGH was 20, the skies BLUE and the windCOLD. I had a wonderful visit and wished I could have stayed longer…for real!

The topic of this event was Uniform Closing Instructions along with eNotary initiatives. The speakers:David Shean, AEA Closing Practices Committee Chair; Kathy L. Alexander, AEA President; KennethMarkison, Mortgage Bankers Association; Stephen D. Morrison, Wells Fargo Home Mortgage; MarcAronson, United States Notary Association; Bill Anderson, National Notary Association. The lunchkeynote speaker was Michael DeVito, Senior Vice President Retail Fulfillment and Underwriting,Wells Fargo Home Mortgage. WHEW lots of titles.

MINNESOTA TRIVIA: Did you know the Loon is Minnesota’s official State bird? The Pink-and-White Lady Slipper is the State flower?

Anyway, back to business. They gave a brief overview of where we were and we are in connectionwith RESPA/FIRPTA/1099’S/911/PATRIOT ACT/IDENTITY THEFT all the hot button issues thatcaused us to act and react the way we do in connection with lenders requirements and regulations.MBA is extremely interested in how we perform our settlement agent’s functions due to the comingreality of eSignatures, eNotary, eRecordings etc. All the original documents that are created will beelectronic. It is coming so be ready!

Everyone is in the electronic area, lenders, escrow, title, termite companies and most importantlyconsumers. The new GENERAL closing instructions are intended to provide clarity to the transac-tion.

NOTE: I for one am not entirely sure that this now 42 page document provides CLARITY, but I amtrying to keep an open mind.

The thought is that the general instructions will be posted on every lending institution website, pro-vided they sign on and agree to use the new instructions. We won’t necessarily receive a copy withour loan documents. All we will receive is the SPECIFIC closing instructions that pertain to OUR file.

NOTE: I have a concern that the lender COULD change the general instructions and we would not beaware that we COULD be responsible for more than we bargained for. Perhaps that will be workedout.


7

Winter 2007

8


9

Winter 2007

EIC/CEA RALLIES AGAINST GARAMENDIEIC/CEA RALLIES AGAINST GARAMENDI

10


AMERICAN ESCROW ASSOCIATIONSymposium 2007 – Minneapolis, MN - January 19, 2007

By Genia Engelstad – Vice Chair, National Affairs

A goal that the Board of Directors set for this year is a more active role in the American Escrow Asso-ciation. Some of you may remember that I attended the AEA Conference in Reno last year represent-ing the Escrow Institute. As a continuation of my role as 2007 First Vice Chair-National Affairs, Iattended the AEA Symposium in Minnesota. Now many of you may be asking yourselves WHY?Why Minnesota? Why January? Well I just don’t know. I do know that some of the nicest folks inthe country live in the Midwest! Everyone in Minneapolis was gracious, kind, thoughtful, informedand really welcomed this Southern California Girl! The HIGH was 20, the skies BLUE and the windCOLD. I had a wonderful visit and wished I could have stayed longer…for real!

The topic of this event was Uniform Closing Instructions along with eNotary initiatives. The speakers:David Shean, AEA Closing Practices Committee Chair; Kathy L. Alexander, AEA President; KennethMarkison, Mortgage Bankers Association; Stephen D. Morrison, Wells Fargo Home Mortgage; MarcAronson, United States Notary Association; Bill Anderson, National Notary Association. The lunchkeynote speaker was Michael DeVito, Senior Vice President Retail Fulfillment and Underwriting,Wells Fargo Home Mortgage. WHEW lots of titles.

MINNESOTA TRIVIA: Did you know the Loon is Minnesota’s official State bird? The Pink-and-White Lady Slipper is the State flower?

Anyway, back to business. They gave a brief overview of where we were and we are in connectionwith RESPA/FIRPTA/1099’S/911/PATRIOT ACT/IDENTITY THEFT all the hot button issues thatcaused us to act and react the way we do in connection with lenders requirements and regulations.MBA is extremely interested in how we perform our settlement agent’s functions due to the comingreality of eSignatures, eNotary, eRecordings etc. All the original documents that are created will beelectronic. It is coming so be ready!

Everyone is in the electronic area, lenders, escrow, title, termite companies and most importantlyconsumers. The new GENERAL closing instructions are intended to provide clarity to the transac-tion.

NOTE: I for one am not entirely sure that this now 42 page document provides CLARITY, but I amtrying to keep an open mind.

The thought is that the general instructions will be posted on every lending institution website, pro-vided they sign on and agree to use the new instructions. We won’t necessarily receive a copy withour loan documents. All we will receive is the SPECIFIC closing instructions that pertain to OUR file.

NOTE: I have a concern that the lender COULD change the general instructions and we would not beaware that we COULD be responsible for more than we bargained for. Perhaps that will be workedout.


7

Winter 2007

6


11

Winter 2007

MINNESOTA TRIVIA - DID YOU KNOW? - That the name Minneapolis comes from the Indianword “minne,” meaning water and the Greek word “polis,” which means city? The City of Minne-apolis has been nicknamed the City of the Lakes.

BACK TO BUSINESS - There was much discussion in the group that the lenders will have to adjusttheir pre-closing procedures. AEA and MBA will have to take a lead in educating the loan broker,funders, and processors as to the guidelines and what will be expected of each party to the transac-tion. It is the intention that the industry trade groups provide training to their members on the con-tent of the general closing instructions.

Version 21 of the General Instructions is now posted on line at the Escrow Institute Website http://escrowinstitute.org/. Please take the time to look at this document. Putting our head in the sand andthinking this DOES NOT effect us now is NOT how we should be handling this very important issue.Many lenders are NOW signing on to this proposed form and using them now. I suggest that youtake the time to read, review and comment on the form NOW!

Again the reasons for the proposed form:To add greater efficiency to the closing process (??)Add greater clarity as to who is responsible for whatProvides remedies for failure to complyChange industry behavior inherently subject to risk of fraudProvide a building block for electronic mortgages

Kenneth Markison commented that lenders would like states to have more UNIFORM notary laws.Like California he would like to see the rest of the country keep a journal of notarial acts along withsignatures and thumbprints.

He remarked again that MBA, the Mortgage Bankers Association, is committed to electronic storageof documents, therefore electronic documents and signings are not too far away!

Stephen D. Morrison commented that White Collar crime is the fastest growing CRIME in the UnitedStates. The losses are in the BILLIONS of dollars.

I got the impression once again that the lenders want us to be their eyes and ears. They want us toreport things such as double escrows, flips, equity skimming, suspicious activity, forgeries, silentseconds, changes to the borrowers finances, changes in title, changes to the sales contract, etc. just toname a FEW of the items that we are will/be required to report. Now I am all for being a watch dog,but what are they (the lenders) responsible for? YIKES!

A couple of suggestions that I made about the new closing instructions:

1. Do not refer to an impound account as an “Escrow” Account. I think consumers are con-fused by this. We are an escrow company we DO NOT collect and hold impounds.

2. I requested that a settlement agent NOT be “lumped” in with title fees. I/WE are not a titlecompany. I am an independent escrow company and I perform escrow services.

There was some discussion that the changes need to be made to the HUD RESPA form. I say let’sstart here and work on it!


5

Winter 2007

12


There was much discussion about conflicts of interest. Is there a conflict of interest when a loanbroker is also the real estate agent? Can the loan broker take the documents out for signing? Howabout when the loan broker also performs escrow services? Like Virtual Escrow? Most in the roomexcept those from California were not aware of the Virtual Escrow Model and believe me after it wasdiscussed, there was real concern. MBA and Wells Fargo expressed concern about this issue as well.I urged them to consider not allowing this conflict to exist. Don’t let one party perform all of thesefunctions. I don’t know that I made an impact with my statements, but there was a lot of note takingon the part of the panelists! I felt that their response was somewhat wishy washy… It is like we knowit is a problem and we don’t like it but what can we (the lenders) do? Wishy Washy!

ENotarization

The first speaker was Marc L. Aronson, President of the United States Notary Association. He is fromPennsylvania and was a clever speaker. Kind of brought some humor to the dry subject of notaries. Ithink we all need to get up to speed on such acronyms as UETA / PRIA / eSign / MISMO / SISAC etc.

Bill Anderson was also in attendance and he represented the view of the National Notary Associa-tion.

I believe that we as notaries and owners of small business need to really become aware of thesetrends and eNotary initiatives. I believe that perhaps a future Escrow Institute meeting should bedevoted to this with lots of time for hands-on experimenting with documents and how to perform aneNotary. What is an electronic credential? The Escrow Institute has formed a committee to researchthese issues and how they will impact us. If you are interested in participating, please contact me orTim Egan or PJ Garcia and we will get you signed up!

The Escrow Institute is committed to being a voice within the American Escrow Association. If theypurport to represent all settlement agents in America, then there must be a place for us, IndependentLicensees, at their table. We will keep you posted on our progress.

Did you know that the Minnesota Twins professional baseball team calls the Hubert H. HumphreyMetrodome in Minneapolis home? Not for long I take it, they are as we did in San Diego contemplat-ing a new ballpark. Anyway enough trivia already! Call me if you need more details about thewonderful state of Minnesota!

Respectfully submitted...your Board member-at-large,

Genia Engelstad

3rd

Vic

e-C

hair

Tric

ia V

agt

Trea

sure

rB

eula

h S

tidha

m2n

d V

ice-

Cha

irTi

na T

hom

pson

Secr

etar

yD

iane

Bin

kerd

1st V

ice-

Cha

irS

unny

Mad

enG

enia

Eng

elst

ad

Par

liam

enta

rian

Jud

y G

oole

r

Cha

irP

J G

arci

aW

ebsi

te

Com

mitt

eeD

OC

Issu

es

Com

mitt

eeP

ublic

Rel

atio

ns

& A

dver

tisin

g

Lega

l & L

eg.

FIR

PTA

* C

al

FIR

PTA

Issu

es

Com

mitt

ee

Inte

rnet

Esc

row

Fr

aud

RE

SP

A D

ocum

ents

R

evie

w C

omm

ittee

EP

AC

New

slet

ter

Edito

rial B

oard

Spe

cial

Eve

nts

Com

mitt

ee

Mem

bers

hip

Ret

entio

n &

Dev

elop

men

tB

udge

t & F

inan

ceB

y-La

ws

& S

tand

ing

Rul

es

Lobb

yist

Cap

ital

Rep

rese

ntat

ion

Man

agem

ent

Sm

ith&

Egan

A

ssoc

iate

s

Oth

er

Con

tract

ors

Boa

rd o

f Dire

ctor

s N

omin

atio

n

Cha

ir E

lect

Jud

y G

oole

r

Hos

pita

lity

Affi

liate

Com

mitt

ee

Mem

ber

Pub

licat

ions

Con

fere

nce

&G

M P

lann

ing

Com

mitt

eeR

ed =

Sta

ndin

g C

omm

ittee

sB

lue

= S

peci

al C

omm

ittee

s

Prin

t Dat

e: 0

2/14

/07


13

Winter 2007

GARCIA Re-Elected Chair for 2007

PJ Garcia of Beach Pacific Escrow was re-elected by the Board of Directors as Chair of the Insti-tute for 2007. Joining PJ on the 2007 Board will be:

Chair-elect: Judy Gooler Monrovia Escrows

First Vice Chairs: Genia Engelstad – National Affairs Elite Escrow Services of San DiegoSunny Maden – State Affairs South Hills Escrow Corp.

Second Vice Chair: Tina Thompson Silver Pines Escrow, Inc.

Third Vice Chair: Tricia Vagt Covina Escrow Company, Inc.

Secretary: Diane Binkerd Lake Ridge Escrow, Inc.

Treasurer: Beulah Stidham Madrona Park Escrow, Inc.

Directors: PJ Bremer Cardinal Pacific Escrow ServicesDave Brooks Canon Escrow, Inc.Judi Cunningham Crestwood Escrow ServiceMarina Flores Las Flores Escrow Co., Inc.Dee Lopez Renaissance Escrow, Inc.Edward Navarro Action EscrowNati Perez Citi Escrow Services, Inc.Aziz Valliani Bellflower Escrow Company

As always, members are welcomed to contact any Board member or EIC Headquarters to be-come involved in an Institute Committee or policy initiative.

4


Because we talk and interact with our Affiliate providers so often, their partnership in EIC is indis-pensable, and as I am reminded, the critical third leg of the stool – EIC/EAFC, DOC and IndustryAffiliates. Thank you to all our Affiliate Members for your support, commitment and friendship.

Moving Forward…

Over the past 60 years, EIC has been dedicated to promoting our members’ interests at every level ofthe industry, in every part of the state, as well as to represent and advocate the positions of the indus-try before the key political and policy leaders in Sacramento, Washington, D.C. and local county level.

We need to build on that success and expand the benefits of membership to include more educationalopportunities as well as benefits such as group purchasing plans that we can negotiate as an associa-tion to help our members. For example, we are following closely legislation before Congress that, ifenacted, would allow professional trade associations such as the Institute to organize and providegroup health insurance plans for its members, with the goal of cutting costs for each member of theAssociation.

We have an expansion of our Public Relations campaign in the final planning and production stages.Our 2006 efforts put EIC and the California licensed escrow industry on the map and radar of bothstate and national regulators and interest groups. Our 2007 goal is to bring those resources closer tohome and facilitate members in recreating that success locally for their own businesses.

Tina Thompson is our 2007 2nd Vice Chair. Her position today includes Education and Programs. Sheis busily assembling her team with her first order of business this year to seek high quality content forthe membership meetings and for the Spring Conference and to work with our Affiliate Memberpartners to create educational programs that bring added value to our members and their employees.It can’t be said too many times…our partnership with Affiliate Members is invaluable to the successof the Institute and our industry.

Our plan also includes a resumption of the various Specialist Group meetings. You may rememberfrom past years, previous groups were Management; Bulk Sales and Mobile Home. They were allvery popular and have been sorely missed.

As always, EIC will continue to closely monitor legislative and regulatory activity at the State andNational levels; and advocate and represent the industry as required. An example has been our yearlong battle with the Department of Insurance over its proposed title/escrow rate setting regulationswhich, if enacted, would seriously impact our members and industry. Please refer to our most recentletter to the new DOI Commissioner on this critical issue. The Institute Board understands the criticalrole we must play in most cases to defend the industry against unwanted assaults, i.e. Affiliate Busi-ness Arrangements/Bundling, proposed RESPA Reform, Garamendi Regulations, and many otherlegislative/regulatory challenges. With our members support we will fight for our industry and theparity we so deserve.

In closing, I would like to thank all of you for the expressions of support I have received over the pastyear. I would particularly like to the thank both the 2006 and the 2007 Boards of Directors, for theirwillingness to accept the challenges and opportunities I threw at them and not only rise to meet them,but in turn upped the ante and proposed even more and better ideas and expansions of their commit-ment to the Institute and industry.

14


Attention EIC membership: Due to the great response for our September 18-28,2007 Fall FoliageCruise from New York to Canada, Princess Cruises has generously extended the booking depositdeadline to March 20, 2007!! Make your reservations fast before the incredibly low balcony pricedisappears!

Trip Itinerary

Sep 18 Sail from New York this evening Sep 24 Sydney, Nova Scotia 8am-5pmSep 19 Newport, Rhode Island 7am-4pm Sep 25 Charlottetown, Prince Edward Island 8am-5pmSep 20 Boston, Massachusetts 8am-5pm Sep 26 At seaSep 21 Bar Harbor, Maine 7am-6pm Sep 27 Quebec City 7am all day (overnight on ship)Sep 22 St John, New Brunswick 7am-3pm Sep 28 Quebec City disembark this morningSep 23 Halifax, Nova Scotia 8am-5pm

CATEGORY DESCRIPTION RATE/PERSONBC Stateroom w/balcony (232-274 ft.) $2465

Other categories are available, please call for prices.Call for pricing for air from your preferred point of departure.

INCLUDES:⇒ 10 days cruising the Grand Princess⇒ All port charges & taxes⇒ All on-board meals & entertainment

RESERVATIONS:A deposit of $450 per person is required toreserve your stateroom by March 20, 2007FINAL PAYMENT:Final payment is due by June 28, 2007

CANCELLATION POLICY:In addition to a $50/person cancellation administrative fee, the following cancellation penalties apply:75 to 57 days before departure .............. $450/person 28 to 15 days before departure ……......... 75%56 to 29 days before departure ............. 50% Less than 15 days before departure ……. 100%

Trip cancellation insurance is available and strongly recommended.For reservations/information call Dana Huckestein at Lewis Travel:

2788 W. Bullard Avenue2788 W. Bullard Avenue2788 W. Bullard Avenue2788 W. Bullard Avenue2788 W. Bullard AvenueFresno, California 93711Fresno, California 93711Fresno, California 93711Fresno, California 93711Fresno, California 93711

(800) 350-1872 or (559) 431-1800 cst #2008653-10

Disclaimer – Lewis Travel & Cruises (dba Wanderers – LT&C) acts as a sales agent for any airline, hotel, car-rentalcompany, tour operator, cruise line, or other service provider named in your itinerary (“Suppliers”). LT&C is notresponsible for acts of omissions of the Suppliers, their failure to provide services or adhere to their own schedules, theirfailure to pay any refund, or for any personal injury, property damage, or other loss, accident, delay, inconvenience, orirregularity which may be caused by any party not under LT&C’s control. By accepting this invoice or itinerary, youhereby agree to release LT&C from all claims arising out of any problem covered in this paragraph.


3

Winter 2007

• DOC’s position on buyer credits from brokers was reexamined and changed as a direct result ofthe activity on the Advisory Committee.

• Reverse Discrimination: Representatives are currently challenging the idea that a real estate lic-ensee cannot receive a discount to which they would otherwise be entitled as a member of thepublic at large.

• “Virtual Escrow” has been on the agenda at each and every meeting for over a year, and the resultis DOC/DRE and DOI have undertaken joint meetings to assess and address the issue.

• Reinstatement of the DOC Newsletter and Management classes: both appear to be back on tracknow, with one newsletter out and one Management class completed.

Expanding Our Influence and Building New Relationships

Another important goal this past year has been outreach to other industry groups at both the stateand national levels. Our intent is to open doors to collaborative ventures such as the cooperativeefforts to fight the Garamendi regulations with CEA and CLTA. We opposed the regulations for ourown reasons, but allied where it made sense to further our interests. Tim Egan and I also had a verypositive meeting with the California Association of Mortgage Brokers in 2006 and collaborations withvarious organizations are in discussion stages but are not yet ready for “prime time”.

The National Affairs Chair is a new position being filled by Genia Engelstad. This past year shetraveled to a number of national conferences to represent California’s independent licensed escrowindustry. Thanks to Genia, EIC now has a seat at the table where she’s able to provide input – for thefirst time – to the Mortgage Brokers Association and others who set the rules by which the rest of usmust live and work under. Included in this newsletter is Genia’s report on the recent AEA Sympo-sium.

As a result of the contacts she has made and the conversations she’s been a part of this past year,Genia came to the EIC Board to recommend that we approach AEA to amend their bylaws and allowEIC to join as a second chapter for California. This would give us direct representation on the na-tional level that isn’t filtered through CEA.

Similar efforts are underway to build strategic alliances with other trade associations like CLTA,ALTA, NNA, CAR, NAR and many other national and state business federations and groups. Themore we communicate and coordinate were appropriate with these other powerful interests, thebetter chance we stand to accomplish our goals and objectives.

The introduction of our newly designed and constantly evolving website has been and will continueto be a major tool for communication both with our members and with the various constituencies weare involved and serve.

Affiliate Members = Full Partners

In 2006, the Board of Directors established an Affiliate Committee with a board position for the Chair.The goal plain and simple is to make our Affiliate Members full partners in our association.


15

Winter 2007

2


New DOC Commissioner Takes Active Role in Escrow Issues

One of the expressed goals of the EIC Board is to rebuild our relationship with the Department ofCorporations into a more positive and collaborative working relationship. We are encouraged withthe response from DOC and with the response so far to the issues and initiatives we have broughtforward to the Department.

One of the bright spots of 2006 was Gov. Schwarzenegger’s appointment of the new Department ofCorporations Commissioner, Preston DuFauchard.

Tim Egan and I had the pleasure of meeting the Commissioner in September and were able to ac-quaint him with some of the more pressing issues facing the industry, including the proposed hostileregulatory initiative from DOI Commissioner John Garamendi and our concerns regarding “virtualescrow.” Since our meeting, the Commissioner helped organize an interagency team from DOC, DREand DOI to conduct a more thorough review of virtual escrow and the issues that surround thismodel.

Prior to his appointment, Mr. DuFauchard served as assistant general counsel for Bank of America,supervising securities litigation related to mergers, investment banking and broker dealer operationsfrom 1997 to 2005. In other words, we have a commissioner with some “real world” experience.

Most important to EIC is that the Commissioner has attended each of the Escrow Law Advisorymeetings upon being appointed. And he’s not just showing up, he’s actively engaged in theCommittee’s discussions and he’s listening. The Commissioner has offered some practical sugges-tions, including the idea of approaching DOI and DRE to do cross agency (joint) audits for companieswho run “controlled” licensed escrow companies.

Working with the Assistant Commissioner Louisa Broudy and Special Administrator Kathleen Partin,we were able to restart the highly popular DOC Management Class for senior licensed escrow per-sonnel. The response to the first class in January exceeded all expectations. Look for announcementsfrom EIC and the Department as to scheduling of future Management Classes.

The Department’s Office of Law & Legislation headed up by Deputy Commissioner Tim LeBas con-tinues to be very active in working with the Institute on mutual legislative and regulatory initiatives.Mr. LeBas and Tim Egan frequently meet to review and refine our strategy to seek legislation toestablish the standards for a “Uniform Escrow Law.” Like with any controversial big picture initia-tive, timing and the political will of the Legislature and the Governor to enact such legislation is key.We will continue this important campaign with the Department in 2007.

Escrow Law Advisory Committee Takes Action

The Escrow Law Advisory Committee took an aggressive role in 2006 to educate the DOC aboutimportant issues facing our industry, such as.

• Kickbacks through affiliated companies, which are not under DOC jurisdiction, that affect theability of the licensed industry to compete on a level playing field.

Publication of the Escrow Institute of California Winter/2007

EIC IS SIXTY YEARS STRONG

Dear EIC Member,

As we embark upon EIC’s 60 Year Anniversary celebration in San Diego thisspring, it is with great pride in our industry that I tell you the state of our associa-tion is strong.

This past year, the EIC Board and I have engaged in an ambitious plan to thor-oughly review all aspects of the organization, management and lobbyist func-tions. The goal is increase our membership and strengthen the effectiveness ofour association so that we can better represent the interests of our members toconsumers, as well as regulators and policy makers.

I want to take this opportunity to share with you the advancements we’ve madeas an association and the direction in which we are headed.

EIC has been fortunate this past year to have so many new members join theBoard of Directors with fresh ideas. Included in this newsletter is an organizationchart so that you can familiarize yourself with the people representing you andtheir areas of focus.

More than ever, membership in EIC provides an experienced network of peers foreach of us to draw upon. One of the most valuable aspects of my own member-ship in EIC is how much I’ve learned from so many of you at dinner meetingsabout how you handle the challenging world of escrow. As a small company, thispeer networking is gold to me and my business. As an EIC member, you alwayshave a network of peers just a phone call away.

It is an honor to serve as the Chair of EIC. Thank you for your commitment to ourindustry and the success of our association.

Sincerely,

P.J. Garcia

16


ESCROW INSTITUTE OF CALIFORNIA

P.O. Box 1069Carlsbad, CA 92018-1069(760) 633-4EIC • FAX (760) 942-1048

Dated Material

PRSTSTDU.S. POSTAGE

PAIDENCINITAS, CAPERMIT NO. 363

D A T E S A H E A D

MARCH 8, 2007General Membership MeetingMission Inn3649 Mission Inn Avenue – Riverside

MAY 3 – 6, 2007Annual Spring ConferenceLoews Coronado Bay Resort – San Diego4000 Coronado Bay Road

JULY 12, 2007General Membership MeetingWest Los Angeles

Publisher: Tim Egan, President & CEO

Loews Coronado Bay Resort San Diego

3649 Mission Inn Avenue Riverside

d a t e s a h e a d eic is sixty years strong · 2013. 4. 3. · carlsbad, ca 92018-1069 (760)...

Documents