MReport May 2019

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18 | TH E M R EP O RT COVER STORY According to Goisse, aligning yourself with the right business partners, at the right time, "is a necessity in effectively scaling your business and meeting client needs." He said that a "true" partnership entailed selecting the right partner and integrating your company with them to drive collaboration. "Partners should be an extension of your organization and busi- ness objectives. Of course, these relationships should be founded in transparency and oversight as the two hold each other account- able for fulfilling their agreed upon objective," Goisse said. "In any business relationship, trust is a huge factor for success, especially when you're dealing with large sums of money as well as very private, personal data on a regular basis," Blair said. "As more and more business is conducted online, the world becomes increas- ingly impersonal, making company ethics invaluable." According to Blair, the alarming increase in wire fraud has been a key challenge that the association, as well as title companies, are look- ing to mitigate this year. Fraud Watch A recent FBI report noted that more than 9,600 victims lost over $56 million from wire fraud in 2017 in the real estate/rental sector alone. Overall, nearly a billion dollars were diverted or attempted to be diverted from real estate purchase transac- tions. In 2016, the Internet Crime Complaint Center experienced a 480 percent increase in wire fraud scams reported to title companies. These numbers in themselves reflect one of the biggest challenges faced by the title industry today— data security. "Wire fraud in real estate transactions continues to be a significant challenge. Fraudsters typically attempt to trick borrow- ers into wiring down payment funds to an account owned by or linked to the hackers," Leavell said. Additionally, Blair pointed out that title companies are being encouraged to report fraud incidents regardless of the dollar loss to the FBI to give a better picture of the threat. On their part, last year ALTA developed the ALTA Rapid Response Plan for wire fraud inci- dents, which outlines 10 steps that companies should follow if they've been hit by wire fraud. "Wire fraud continues to evolve, meaning title and settlement compa- nies must remain vigilant to protect funds involved in transactions," Blair said. "Companies must remain committed to employee training and following policies and procedures to fight evolving cyber threats." Title companies are taking the threat seriously too. "In addition to providing extensive tools and train- ing on cyber fraud and security, we are also investing in a modern closing experience for buyers and sellers," Leavell said. "The com- pany's Secure Portal allows buyers and sellers to complete and e-sign opening paperwork, and send and receive messages, through authen- tication-based security. Reducing email communications in favor of a more secure portal helps to reduce wire fraud risk." Looking Up A s the positive macroeconomic factors enumerated earlier continue to fuel the growth of title companies opportunities abound for this segment in 2019. "The momentum continues to build across the industry to offer eClosing options to consum- ers, and we may see significant progress toward delivering a real estate transaction closing experi- ence that more closely aligns with the digital home search and loan application experience consum- ers have embraced," said Kevin Wall, President, First American Mortgage Solutions. According to O'Donnell, provid- ing best-in-class services from reputable companies can enhance the mortgage experience and lead to potential long-term borrower relationships. "Working with companies that can embrace tech- nology to provide the consumer with new tools, like remote online notarization, can help enhance and grow business opportunities," she said. "The ability of all participants to share data and communicate more effectively is an opportunity to deliver a better product for the benefit of the consumer." Consolidation is another trend that will define the industry in 2019. "Smaller title agents will be purchased by bigger underwriters, even as agency operations will continue to focus on plugging a diverse set of solutions to bring efficiency for the smaller indepen- dent agents to create a win-win situation," Slonaker said. From a regulatory point of view, Blair said that remote online notarization legislation was passed in 11 states and bills have been introduced in another 25 states as of March 2019, which will ease the closing process. Another area of opportunity, according to Clarke, was the fact that title companies were adopting a new mindset where, instead of being an external player, they were a completely integrated partner within the mortgage process. "The future of the mortgage industry will be defined by how each player in the mortgage process interacts with another and their ability to support consumer demand," he said. Looking at what consumers want, Hall said that bringing all service providers into a homog- enous and consumer-interactive mobile application has been the recent focus of most top-tier lend- ers, an area where larger service firms can simplify this execution to encourage greater adoption across the broader market. As fair weather continues to shine upon the title industry, it has the opportunity to reinvent itself to become one that powers new, innovative business models. "Title and escrow have been isolated to almost an afterthought for many," Baker said. "Now they can be looked at as the champions that will partner with the lenders, bro- kerages, and other entrepreneurs that seek to meet the growing demands of today's consumers." RADHIK A OJHA is a professional writer and editor specializing in the mortgage banking sector. She is a graduate of the University of Pune, India, where she received her B.A. in Commerce with a concentration in Accounting and Marketing and an M.A. in Mass Communication. Upon completion of her master's degree, Ojha worked at a national English daily publication in India (The Indian Express) where she was a staff writer in the cultural and arts features section. Ojha also worked as Principal Correspondent at HT Media Ltd covering the retail market and at Honeywell as an executive in corporate communications. "Relationships lie at the core of the mortgage business and it's important for lenders and title companies to work together with honesty and integrity." —Matt Clarke, CFO, COO, Churchill Mortgage

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