October 19, 2012 VIA REGULAR AND OVERNIGHT MAIL Stephen W.

Robertson Insurance Commissioner Indiana Department of Insurance 311 W. Washington Street, Suite 300 Indianapolis, IN 46204 Re: CFPB Bulletin 2012-03 Service Provider Bulletin & Third Party Vetting

Dear Commissioner Robertson: I am writing you on behalf of the Indiana Association of Independent Land Title Agents (IAILTA) to bring your attention to a matter about which we have recently become aware. A number of our members have told us that they are receiving notices from their warehouse lenders requiring them to pay a third party as a condition of doing business. We believe that this requirement not only violates federal law found at RESPA Section 8 and its prohibition against kickbacks in the settlement process but also contemplates a new, quasi-form of insurance in which the lender would receive indemnity in the event of a closing agent defalcation or other loss. Because the third party vendors are not licensed insurance producers, we believe this action violates Indiana law under Title 27 of the Insurance Code and requires your immediate action. To better explain this recent phenomenon, please note the following. The third party firm is offering to vet the title insurance agents on behalf of the lenders who have agreed to participate in this program. The third party company, known as Secure Settlements, Inc. (SSI) out of New Jersey, is apparently seeking to charge the title agent an annual flat fee per escrow officer, as well as non-escrow officers who may play some role in closing the transaction or handling the closing file. Title agents, attorneys, closers, title searchers, abstractors, surveyors, real estate agents, mortgage brokers, and loan officers will all have to fall under the SSI vetting program, despite the fact that SSI is not a licensed provider of such services. SSI has recruited hundreds of warehouse lenders to participate in their vetting scheme. Those participating lenders have sent out the enclosed correspondence to title agents across Indiana requiring them to take action that is not otherwise required by law and that is already performed by the agents title insurance underwriters. The fees for vetting are now being passed along to the consumers in the form of higher settlement costs with no attendant benefit to the consumer or the insureds.

2 Letter to Commissioner Stephen Robertson October 19, 2012

This would be a new significant expense for title insurance companies that could quickly become an extreme burden if multiple vetting companies enter the market and the Indiana title agent faces the prospect of having to pay the same fee to several companies in order to be eligible to handle transactions with multiple lenders. These demands may be an outgrowth of increased regulatory pressures on lenders, including the enclosed Consumer Financial Protection Bureau Bulletin 2012-03 which requires lenders to take certain steps to oversee their business relationships with service providers. SSI appears to be offering a supposed safe harbor to the covered lenders under this Bulletin. However, on October 1, 2012, IAILTA members met the author of the enclosed CFPB bulletin who assured us that no such intention was ever conveyed to SSI nor contemplated by the correspondence. Consequently, we believe that further state action is required because SSIs approach places an unnecessary burden on title insurance agents and consumers with no tangible benefit. As you know, in Indiana, title insurance agents are licensed by the IDOI, required to take continuing education, undergo extensive background checks and regularly receive thorough annual audits of their escrow accounts and quality control systems by both the IDOI and their respective title insurance underwriters. Any perceived benefit to lenders or consumers from the requirement that a private third party firm duplicate the efforts of IDOI is illusory. Finally, this type of firm presents a new security concern under both federal and state law. In addition to the fees charged, SSI is asking for extensive confidential information about the escrow and title personnel as well as sensitive company information including bank account numbers. Thus, there is a legitimate concern that this information could be used in a fraudulent manner, creating a risk to consumers and their escrow funds as well as a solvency concern for Indiana title agents. Additionally, the private information on their escrow and title personnel that title agents are being asked to release, including social security number, date of birth and drivers license number, creates potential liability for them as an employer as well as an identity theft risk for the employees. These are a few of the concerns that have arisen, and there may well be others. We would like to meet with you soon to discuss this potential problem further and answer any questions you may have. Yours truly, Robert B. Holman, Esq. Member, Indiana Association of Independent Land Title Agents Enclosures Cc: Anthony L. Affatati, Sr., President, NAILTA Dan Oliver, Esq., Director, Title Insurance Division, IDOI Justin Ailes, Vice President, Governmental Affairs, ALTA Kathy Hulbert, Executive Director, ILTA