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Volume 97, 
August 2014



Updates to MISMO Standards Coming in November 2014 and July 2015

The Mortgage Industry Standards Maintenance Organization will release two residential mortgage data standard updates in November 2014 and July 2015.


MISMO's residential standards governance committee said in a press release on 8/19/14 that the new standards on loan data exchange transactions and corporate data formatting models of a residential mortgage loan lifecycle will be available for industry review and public comment before the official release dates. A draft of Version 3.3.1 model is will be reviewed at the MISMO Fall Summit on September 22-26, 2014.


Version 3.3.1, slated for release in November, is designed to be backwardly compatible, which will allow its Version 3.3 reference model to continue to work if applied to Version 3.3.1. All requests for updates to the existing model must be filed to the MISMO Core Data Structures workgroup by Sept. 3, after which requests will be considered for inclusion in subsequent versions. (Read complete article.)



News from PREP Chapters


In every edition of the PREP Newsletter, we highlight at least one PREP Chapter and post an abbreviated version of their most recent Chapter Meeting minutes.  You can also see what any of the PREP Chapters are talking about by going to PRIA's PREP Chapters webpage.  


Co-Chairs:  Government, Timi Bailey at and Business, Darlene Missler at  


The Metro Minnesota PREP Chapter met on June 19, 2014. The agenda included discussion on the ERERC (Electronic Recording Commission) document types now available for eRecording.  A quick reference guide for document information from Ramsey County was introduced. And there was discussion about UCC Filing, and the Safe at Home transactions and impact on title company closing functions. The next legislative session was discussed by Rick Little from the Minnesota Bar Association.  And Title companies present mentioned that they are seeing many more fraudulent checks with more regularity. Finally the meeting reviewed some details about eRecording rejections that are being seen in recording offices at this time. The next meeting of the Metro Minnesota PREP Chapter will be on September 9, 2014. (Read this Chapter's minutes on PRIA's PREP webpage.)


Proposed HMDA Changes Set to Improve Data Quality
excerpted from National Mortgage News 8/19/14

If you are looking for some light reading these last few weeks of summer, you might want to take a look at the recently released proposed rule regarding changes to the Home Mortgage Disclosure Act also known as Regulation C.


HMDA data provides information regarding home mortgage lending activity, and the proposed CFPB rule appears to significantly expand data reporting requirements for mortgage industry participants. The proposed rule itself is 573 pages long. The deadline for comments to the rule is on or before Oct. 22.


Each year HMDA data is reported for the vast majority of residential mortgage loans originated in the U.S. In 2012, information came from 7,400 financial institutions that reported data for approximately 18.7 million mortgage applications and loans.


The information that institutions report includes the name of the lender; the type and general location of the property; and the race, ethnicity and sex of the applicant. Reported HMDA data also includes information about the loan amount and whether the loan is for purchasing a home, refinancing an existing mortgage or home improvement. (Read complete article.) 




Lawsuit Puts Scrutiny on Title Company Kickbacks
excerpted from LA Times 8/17/14
A new federal court suit alleging kickback violations by one of the country's top-producing real estate sales teams raises an unsettling question for home buyers: Could your agent or broker be pocketing under the table large chunks of what you pay for title insurance?

Some legal analysts say the litigation should be a wake-up call for realty brokers and their customers nationwide. It focuses fresh attention on the often murky financial relationships that exist between title insurance agencies and realty firms - relationships that have been drawing increasing scrutiny from the federal Consumer Financial Protection Bureau.


The suit, which was filed in U.S. District Court in Baltimore this month, alleges that Creig Northrop Team P.C. - a real estate group ranked among the highest-grossing nationwide in recent years - received payments totaling $1.3 million from 2001 to 2014 from a title insurance company, which the complaint characterizes as illegal "kickbacks" that were never disclosed to buyers. The plaintiffs also allege that the defendants used "sham" employment and marketing agreements to disguise the true nature of the payments. (Read complete article.) 


Why a Slowdown in Housing Prices is Great News
excerpted from The New York Times 8/26/14 

There was some glumness in the latest news on housing prices. There shouldn't be. Slower home price rises - and in some markets, outright declines - are a sign the housing market is starting to move past the boom-and-bust cycle of the last dozen years toward a market where sensible prices driven by local economic conditions prevail.


The S.&P./Case-Shiller home price index showed prices rose 8.1 percent in 20 major cities in the 12 months ended in June, the lowest rate of increase since 2012. Compared with May's prices, national home prices actually declined oh-so-slightly, by 0.1 percent, with six major metropolitan areas reporting price declines of more than 1 percent. (Those would be Atlanta, Boston, Chicago, Cleveland, Detroit and Minneapolis.)


Why is this good news? Because the new data offer hints that a disastrous era for housing may be ending. Going back to the early 2000s, the housing market has been overwhelmingly driven by national phenomena, first the explosion in loose mortgage lending and bubbly prices that finally peaked in 2006, then the collapse in mortgage credit and prices from 2007 to 2010, and then a gradual recovery in prices since then. (Read complete article.) 


Six New Recording Offices are now eRecording through Corporation Service Company (CSC)
excerpted from eRecording.Com 8/21/14


Hunterdon, NJ, Guadalupe, NM, Humboldt, NV, Laurens, SC, McDonald, MO and Skamania, WA are amongst several new recording offices who are now electronically recording real estate documents through Corporation Service Company� (CSC�). (Read complete press release.) 

ALTA NEWS:  Michelle Korsmo, ALTA CEO, Gives Overview on the Federal Reserve's Loan Officer Opinion Survey on Bank Lending Practices

excerpted from the August 11, 2014 ALTA Advocacy Update


Here is a Survey that is worth your attention (the Federal Reserve's "July 2014 Senior Loan Officer Opinion Survey on Bank Lending Practices"). One of the biggest reasons is that the Fed publication led to two diametrically opposed headlines from banking industry news sites about its findings on the impact of the new Dodd-Frank rules on loan approvals. According to DS News, CFPB rules aren't hurting loan approvals; while according to Housing Wire, CFPB rules are hurting loan approvals. How could two banking industry publications come to such opposite conclusions? The devil is in the details.

The Federal Reserve's quarterly survey of loan officers is designed to track the general demand for and availability of both household and business credit in the U.S. In the July edition, for the first time, the Fed included a series of special questions on "the effects on the approval rates for home-purchase loans of the Ability-to-Repay and Qualified Mortgage Standards."


According to the survey, the majority of banks reported that the rules had no effect or a positive effect on the approval rate of loans eligible for sale to the GSEs, called prime-conforming mortgages (69 percent). By contrast, about half of respondents (52 percent) indicated that they had reduced approval rates for non-traditional, subprime and jumbo mortgages.  It is also important to look at the breakdown between large banks and other banks. For large banks, 78 percent saw no impact on approval rates for prime-conforming loans as opposed to only 50 percent of other, non-large banks. Further, for non-traditional and subprime loans the spread is even greater with 61 percent of large banks reporting the regulations having no impact on approval rates while 67 percent of other banks report the regulations are causing an impact.


While regulatory change (and the QM rule in particular) are costly and can certainly hurt consumers, the results of this study show that these new rules appear to be doing what they were designed to do: (1) make it harder for lenders to place consumers in risky mortgage products, and (2) encourage banks to adopt better underwriting practices.


Lastly, this study shows that that the lenders who are impacted the most by new regulations or standards are those that are the least prepared. Staying on top of changes both in Washington and with business partners has a direct impact on your business. Whether it's the QM rule, the new mortgage disclosures, or the ALTA's Best Practices, take the time to get prepared now because the result will show in the smooth transition within your operations-and quite possibly make the difference between getting a deal or not.  


Links to National News


Loan Mod Scams, Short Sale Bait-and-Switches, REO 'Sales' Top Mortgage Fraud Schemes 

HousingWire | August 27, 2014

The most active states for mortgage fraud today include California, Nevada, Arizona, Florida and Michigan, report Freddie Mac's fraud investigators.


Reuters | August 27, 2014

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 2.8 percent in the week ended Aug. 22.


DSNews | August 26, 2014
A report filed last week by the Office of Inspector General of the Federal Housing Finance Agency states that Freddie Mac and Ginnie Mae ignored "red flags" with regards to a mortgage fraud scheme perpetrated by lenders Taylor, Bean and Whitaker, and Colonial Bank, which resulted in billions of dollars in losses.
DSNews | August 27, 2014

Foreclosure activity was down all over the nation in July, particularly in the area of foreclosure inventory - homes that are in any stage of the foreclosure process - where there was a 34.4 percent drop from July 2013, according to CoreLogic's July 2014 National Foreclosure Report released on August 27.    

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In This Issue
Updates to MISMO Standards are Coming
News from PREP Chapters - Metro Minnesota
Proposed HMDA Changes Set to Improve Data Quality
Lawsuit Puts Scrutiny on Title Company Kickbacks
Why a Slowdown in Housing Prices is Great News
Six New Recording Offices are now eRecording through CSC
Links to National News
Advertise in PRIA's Newsletters
PREP Blog and PREP LinkedIn
Examples of PRIA's Products 
PREP Chapter Meetings
 September - December 2014  

      Central Florida 

      Metro Minnesota 

      North Central Texas


      SE Minnesota

      Central Texas

      Central Lakes MN




Contact Information

Do you have questions or suggestions for this newsletter or any updated information on co-chairs, emails, phone numbers, etc. please contact us:
Carolyn Ableman
PREP Coordinator

Mark Monacelli
PREP Committee Government Co-Chair, Recorder
St Louis County, Minnesota

Madeleine Nagy

PREP Committee Business

Co-Chair, ALTA

State Government Affairs


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