The Fund & Title

Insurance
Laying the Groundwork

2
 The Fund
• The Fund was founded in 1948 by and for Florida
attorneys to help them provide real estate purchasers
and lenders with legal expertise and title protection

• Attorneys’ Title Fund Services, LLC (“ATFS”) still known

as The Fund, now provides services to thousands of
Fund members issuing title insurance on Old Republic
National Title Insurance Company (“ORNTIC”)

What is Property
Ownership?

4
 Types of Ownership
• Title can be held by one party in fee simple absolute, or in
a co-tenancy as follows:
• Estate by the entireties (presumption for married couple)
• David and Mary as husband and wife
• Married Couple is like a third “person”
• Protection from creditors against one party
• No protection from federal tax liens
• Joint tenants with right of survivorship
• David and Mary as joint tenants with right of survivorship
• “Last man standing gets all”
• Common in northeastern United States
• For married couples estate by the entireties is better
5

Types of Ownership, Continued

• Tenants in common (presumption for co-tenants not married to
each other)
• David and Mary
• Each will own an undivided one-half interest in the property unless
otherwise stated
• Partition action if one wants to sell and the other does not
• Divorce changes estate by the entireties into tenants in common
• Life estate with remainderman
• David for his life then to Mary
• David for Frank’s life then to Mary
• Enhanced or Lady Bird Deed
• David for his life then to Mary, David reserving for himself the rights to . .
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 Types of Ownership
• Title can also be held by
• A trustee of a trust
• A trust cannot hold
property
• A legal entity, such as
• Corporation
• LLC, or
• Partnership

How to Transfer
Property
Ownership
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 Deeds - Essential Requirements:
• Original document
• Notary for recording, not validity
• Two witnesses
• Notary may be a witness but must sign on the witness line
• Legal capacity
• Over 18 years old, etc.
• Language of conveyance
• Sell and convey
• Consideration (we do NOT typically insure gifts)
• Name of the preparer
• Person’s name
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Mortgages - Essential Requirements:

• Original document
• Notary for recording, not validity
• Witnesses
• Not required by Florida law
• Two witnesses required by all lenders
• Notary may be a witness but must sign on the witness line
• Legal capacity
• Over 18 years old, etc.
• Language granting a mortgage lien
• Name of the preparer
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 Conveyances by Individuals
• Sign name as on document
• Homestead considerations
• Deed
• Spouse to sign or
• Non-homestead language in deed
• Mortgage
• Spouse to join the mortgage for homestead purposes –
be specific
• Remember that it may become homestead at any time

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Conveyances by Entities & Representatives

• Authority to convey or mortgage
• Corporation or Limited Liability Company
• TN chapter 11
• Partnership
• TN chapter 23
• Agent under a power of attorney
• TN chapter 4
• Personal Representative of an estate
• TN chapter 2
• Guardian for a minor
• TN 10.04.06

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 Title Search
Introduction

Gathering of Information
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Searching Title to Land

• Only option for examining
title prior to title plants
• Attorneys
• Searched courthouse
records manually
• Courts record documents
• Order received
• Index them by names of
parties
• Creating
Grantor/Grantee Index
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 Searching Title to Land
• Later, abstracters
• Digested public records to create abstracts
• Condensed history of title to land tracing ownership back
to earliest public record
• Including a statement of all
• Liens
• Charges
• Liabilities

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Searching Title to Land

• Title plants were created to store & share abstracts
• Convert courthouse data
• Property Index
• Indexed by legal descriptions
• General Index
• Indexed by names of parties
• Sometimes errors are revealed
• More timely correction
• Some large title plants were later merged into The Fund

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 ATIDS
• ATIDS – Automated Title Information Data System is the
largest database of computerized title information in the
State of Florida
• 1967 The Fund started developing a computerized title plant
• 1971 ATIDS introduced
• Name index
• Property index

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Title
Examination
Introduction
Review of Gathered
Information for Creation of
Commitment 18

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 What is Title Examination?
• Review & evaluation of recorded documents from past to
present
• To establish
• Unbroken chain &
• Legal sufficiency of instruments – confirming accuracy
• Legal descriptions
• Parties, etc.
• To reach conclusion as to quality of title
• To determine encumbrances, limitations or adverse matters

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Examining Title to Land

• Attorneys
• Initially
• Examined courthouse records manually &
• Gave opinions of title
• Later, used title plants
• Examined abstracts &
• Created title commitment
• Today
• Still use of title plants for creation of title commitment or
• Order a commitment from The Fund
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 Legal Descriptions
• Real property can be described in several ways in Florida
• Metes & bounds
• From point of beginning go north 0º 0 min. 0 sec. for 125 feet more or
less
• Government survey method - fractional sections
• NE ¼ of the NE ¼ of Section 4, Township 1 N & Range 40 E
• Platted property
• Lot, Block, Plat Name, Plat Book No., & Page
• Lot 86, Bronson’s Landing According to the Map or Plat thereof as
recorded in Plat Book 66, page(s) 139 through 149, Public Records of
Orange County, Florida

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Legal Descriptions, Continued

• Condominiums Sec. 718.104, F.S.
• Official Record Book & Page for Declaration Of Condominium
• Apartment No. 128-C of that certain Condominium known as ELWOOD TOWER
SOUTH, a condominium, dated September 23, 1966, recorded in Official Records
Book 3184 at Page 123 at seq. of the Public Records of Broward County
• KEY – Can a surveyor find the property on the face of the earth if given the
legal description?
• Not adequate legal descriptions
• Street address
• Tax ID
• Both street address and tax ID
• Shortened tax appraiser’s description
• But PACE financing lien will attach when tax appraiser description is used
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 Chain of
Title

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Chain of Title
• In examining title
• Analyze abstract to create a chain of title

• A chain of title is a “record of successive conveyances, or

other forms of alienation, affecting a particular parcel of
land, arranged consecutively, from the government or
original source of title down to the present holder”
Black’s Law Dictionary

• Think each link is ownership – chain is from owner to owner

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 Encumbrances
&
Adverse
Matters
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Encumbrances & Adverse Matters

• Encumbrances and adverse matters may include:
• Mortgages
• Judgments
• Construction liens
• Code enforcement liens
• Child support orders
• Competing ownership claims
• Defective court proceedings
• Must be addressed in the commitment as either
• B-I – requirements or
• B-II – exceptions
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 Commitment for
Title Insurance
Reason for Title Search & Examination

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What is a Title Commitment?

• It is a promise to issue Title Insurance
• It contains the same
• Terms
• Conditions and
• Exclusions as will appear in the final policy (unless deleted)
• Jacket
• Schedule A – from chain
• Schedule B-1 –“charms” to be removed
• Schedule B-2 – “charms” to remain

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 What is a Title Commitment?
• Buyer to review to determine if exceptions (B-II) are
acceptable
• Contract calls for marketable title
• Easements & other items
• Lender to review to determine if exceptions (B-II) are
acceptable
• Settlement agent to review (even if ordered) to determine
• Accuracy
• B-I – items to be removed by satisfaction or otherwise
• B-II – if title is marketable
• B-II – items to be removed
• Seller to review to determine if all exceptions (B-II) are listed 29

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 Title Insurance

31
31

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Types of Florida Title Insurance

• Owner’s Policy (O21) ALTA 2021 Owner’s Policy with
Florida modifications
• Indemnifies owner against loss if title is unmarketable
• Issued for full insurable value = fair market value
• Loan Policy (M21) ALTA 2021 Loan Policy with Florida
modifications
• Indemnifies lender against loss if the mortgage is not a valid
lien of specified priority
• Issued for full principal indebtedness or up to 125% of that
amount
• CPL’s = Closing Protection Letters
• ALTA – 2021 (July 1, 2021)
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 American Land Title Association (ALTA)
• National trade association
• www.alta.org
• Creates ALTA title insurance
forms used throughout country
• ALTA will require that the title
agent
• Become a member
• Pay a license fee or
• Apply for and obtain an occasional
use waiver annually

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Title Insurance is Unique

Other Insurance Title Insurance
Coverage for: Future hazards Past hazards not yet
discovered
Premium is Continuously One time upon issuance of
Paid: policy

Premium is Paying future claims Reducing claims risk prior to

Spent: policy issuance & held in
reserve for future
undiscovered risks

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 What Does Title Insurance Cover?
• Occurrences before effective date which surface after effective
date
• Breaks & defects in chain of title
• Gap – Sec. 627.7841 F.S.
• Attorney’s negligence
• KEY - Forgery, fraud, undue influence, duress, incompetency,
incapacity, impersonation
• Failure of a document to be properly created, executed, witnessed,
acknowledged, notarized, delivered, indexed or recorded
• Defective judicial or administrative proceedings
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Who Does Title Insurance Protect?

• The insured and
• The attorney examining title
• By providing another resource for liability for title defects;
consequently, reducing overall attorney liability

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 Introduction:
Law, Regulations
& Industry
Standards
1

National

2
2

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 National
• Federal Law
• RESPA (Real Estate Settlement Procedures Act)
• TILA (Truth in Lending Act)
• IRS
• Reporting – 1099-S
• FIRPTA (Foreign Investment in Real Property Tax Act)
• FinCEN
• National Association of Legal Assistants (NALA) Code of
Ethics
• ALTA Best Practices
3

RESPA
• Real Estate Settlement Procedures Act
• Passed 1974
• Protects homeowners in real estate transactions
• Requires disclosures
• No kickbacks or referral fees
• Regulation X

4
 TILA
• Truth in Lending Act
• Passed in 1968
• Required disclosures of loan costs
• Gives consumers rights
• Covers more than real estate
• Regulation Z
• CFPB – Bureau of Consumer Financial Protection
• Ensures lenders treat consumers fairly

1099-S
• 1099-S Reporting is required concerning:
• Proceeds from real estate transactions
• Generally filed by the person responsible for closing the
transaction
• 1099-S requirements
• Sale or exchange for money
• Present or future ownership interest
• Improved or unimproved land, permanent structures, condominium
unit, or cooperative housing
• Deadline for filing
• February 28th if filing manually, March 31st if filing electronically
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 1099-S Exceptions (6)
1) Sale of principal residence for
• <$250,000.00 single or
• < $500,000.00 jointly
• & Non-recognition applies
2) Transferor is a corporation or governmental unit
3) Full or partial satisfaction of a debt secured by property
4) De Minimus Transfer <$600.00
5) Gifts or inheritance
6) Volume seller of real estate as stock in trade
7

1099-S
• On-demand video
• A Closing Agent’s Guide to the 1099-S
• Concept articles:
• “The Who, What and When of 1099-S Reporting,” 41 Fund
Concept 1 (Jan. 2009)
• “1099-S Reporting: Practical Tips for Frequently Encountered
Situations,” 42 Fund Concept, 105 (Dec. 2010)
• “The Catch-22 of Foreign Sellers and the form 1099-S,” 49
Fund Concept 105 (Sep. 2017)
• Links will be emailed next week

8
 Application for Filing
Information Returns
Electronically
• (FIRE) IRS Form 4419
• Electronic reporting to IRS is
required if reporting 250 or
more 1099-S forms per year
• Must submit Form 4419 to IRS
to obtain a Transmittal Control
Code (TCC) for reporting

FIRPTA
• Foreign Investment in Real Property Tax Act, Section 1445
Internal Revenue Code
• When U.S. real property is sold & seller is a “foreign person”
withholding is required by purchaser on amount realized
• Foreign person includes
• Nonresident alien individuals
• Foreign corporation &
• U.S. limited liability companies with foreign members
• Amount realized is
• Generally, the sales price but
• Could be greater if there is forgiveness of debt on a short sale
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 FIRPTA (cont.)
• Generally, the withholding amount is 15% of amount
realized
• KEY – Withholding agent is the buyer or transferee, but
the closing agent facilitates this duty
• Buyer, real estate licensee & closing agent may be liable
• Buyer has an affirmative duty to determine if seller is a
foreign person & if so, must withhold from sale proceeds
• Beware short sales & foreclosures – withholding obligation
applies to full indebtedness
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Flow Chart
for
exemption &
reduction of
withholding

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 FinCEN GTO*
• Business entity purchaser
• One or more residential real properties
• Not vacant land
• $300,000 or more
• Title insurance purchased
• No external financial (bank loan)
• Will require GTO Information Collection Form

• *Geographically Targeted Orders

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FinCEN GTO
• Miami-Dade, Broward & Palm Beach Counties
• See website for current order dates

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 NALA
• National Association of Legal Assistants
• Non-profit organization
• Voluntary certification program
• Ethical guideline

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ALTA’s Best
Practices
Industry Standards

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 What Are ALTA Best Practices?
• Reaction to vetting from lenders due to
• Dodd-Frank Wall Street Reform Act
• CFPB Bulletin of April 13, 2012
• A set of policies and procedures for settlement agents
• A way to build confidence with lenders about your internal
processes
• Each lender determines if they will require
• Written Best Practices
• Self-certification
• Third party certification
• A written guide for you
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7 Pillars of ALTA’s Best Practices

• Pillar 1 – Licensing
• Pillar 2 – Escrow/Trust Accounts
• Pillar 3 – Privacy & Information Security
• Pillar 4 – Recording & Pricing Procedures
• Pillar 5 – Title Policy Procedures
• Pillar 6 – Professional Liability Insurance
• Pillar 7 – Resolving Consumer Complaints

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 Policy Review

• All policies and procedures

• Are works in progress and
• Should change as your business changes
• Periodic review is necessary
• At least annually
• Testing procedures is also a good idea

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Resources
• ALTA website
• Samples
• Updates
• The Fund’s Website
• Tools &
• On-Demand webinars
• Building the Pillars of ALTA’s Best Practices Workshop I
• Pillars 1, 6 & 7
• Building the Pillars of ALTA’s Best Practices Workshop II
• Pillars 2, 4 & 5
• Concept articles
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 State

21
21

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State
• Florida Constitution
• Florida Statutes
• Property Assessed Clean
Energy (PACE) financing
• Florida Administrative
Code
• The Florida Bar Rules,
Regulations, Code of
Ethics

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 Constitution
• Homestead
• Alienation & devise
• Protection from creditors
• Tax benefits

• Resources
• On-Demand webinar
• There’s No Place Like
Homestead
• Homestead 2.0
• Homestead Tax Cheats:
When Chameleons Go Bad
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Florida Statutes

24

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 Deeds – Statute of Frauds
• Sec. 689.01, F.S.
• How real estate conveyed
• A conveyance of an interest in land for more than one year
• Must be in writing &
• Signed by party to be bound
• In presence of two subscribing witnesses

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Statutory Warranty Deed

• Sec. 689.02, F.S.
• Form of warranty deed prescribed
• Florida’s statutory warranty deed incorporates full warranties of
title by reference…
• “…party of the first part does hereby fully warrant the title to
said land, and will defend the same against the lawful claims of
all persons whomsoever…”
• Sec. 689.03, F.S. -
• Legal effect of statutory warranty deed
• This statutory form has legal effect of a full warranty deed

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 Statutory Warranty Deed
• If deed refers to the statute, 6 common law covenants, do not need to
be listed,
• Present Covenants
• Covenant of Seisin: “A good right to convey."
• Covenant of Right to Convey: Seller's promise that he has valid title of the property
being conveyed
• Covenant Against Encumbrances: Seller promises that there are no
encumbrances, other than those that have been previously disclosed
• Future Covenants
• Covenant of Warranty: Warranty of title that grantee & his or her heirs and assigns
will enjoy it without interruption by virtue of a paramount title
• Covenant of Quiet Enjoyment: Seller's promise to protect buyer against claims
paramount title to the property
• Covenant of Further Assurances: Seller to take affirmative steps to cure any
defects in grantor's title
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Requirements for Recording

• Sec. 695.26, F.S.
• Requirements for recording...
• Name of parties who execute & notary public
• Legibly printed
• Typewritten or
• Stamped
• Name and P.O. Box of natural person who prepared instrument
• Reserved for use by clerk
• 3 inch by 3 inch space on top right corner of first page
• 3 inch by 1 inch space at top right corner of subsequent pages

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 Why We Record …
• Sec. 695.01, F.S. Conveyances to be recorded (Florida is a
Notice state)
• Protects interests of
• Bona fide purchasers for value &
• Creditors without notice against unrecorded interests
• Sec. 695.11, F.S. Instruments deemed to be recorded from
time of filing
• Priority of recorded instruments is generally established by order of
recording
• Exceptions to this priority rule include:
• Purchase money mortgage
• Construction liens relating back to NOC
• Real property taxes & liens that are similarly enforceable

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Notaries Beware!
• Sec. 117.107 (10)-(12), F.S.
• (10) may not notarize a signature on a document if document is
incomplete or blank
• (11) may not notarize a signature on a document if person
whose signature is to be notarized is spouse, son, daughter,
mother, or father of the notary public
• (12) may not notarize a signature on a document if notary
public has a financial interest in or is a party to underlying
transaction

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 Property Assessed Clean Energy (PACE)
Financing
• Sec. 163.08 F.S.
• Provides financing for energy & wind hardening improvements
• Summary Memorandum of Agreement is recorded
• Sometime updated with Addendum to Financing Agreement
• KEY - Does not contain the borrower’s signature
• Payment of loan is by Non-Ad Valorem tax (annually with no
discount)
• KEY - New loan will require payoff
• FHA
• Fannie Mae
• Freddy Mac
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PACE Financing
• May be 18-month delay in first payment
• KEY - May not show on tax statement for 18 months
• May not show on the TRIM notice
• Payoff statement may be inaccurate
• KEY - May not contain next annual payment

• Resources
• Concept articles
• On-demand webinar “The Good, The Bad & The Ugly of PACE
Financing”

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 Marketable Record Title Act (MRTA)
• Chap. 712, F. S. became effective July 1, 1965
• MRTA intended to simplify examination of title by
extinguishing stale claims
• Claims are so old (more than 30 years) should be extinguished
by operation of law
• TN 10.01.02 for details
• May eliminate a B-II exception

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MRTA
• Exceptions to MRTA (interests that cannot be eliminated)
include:
• Matters disclosed or inherent in root of title
• Matters preserved by filing a proper notice
• Rights of parties in possession
• Matters arising after recordation of root of title
• Easements in use
• Rights of parties assessed taxes for past three years
• Most governmental interests
• Mineral rights in fee,
• KEY - But not leasehold interest and rights to entry to use mineral rights
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 Your Role in
Transaction

35

35

Attorney’s Role in a Transaction

• Attorney/Client Relationship

• Escrow Agent

• Closing Agent

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 Attorney Client Relationship
• Attorney client relationship hinges on client’s belief
• Attorney has an ethical obligation to unrepresented parties
to explain that attorney is representing an adverse interest
• Attorney has a duty to disclose matters outside scope of
representation if aware of those matters

• KEY - Attorneys should utilize engagement letters or non-

representation letters to document scope of representation

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Escrow Agent
• Designated in FR/Bar contract
• Exercise reasonable skill & ordinary diligence in holding &
delivering possession of the escrowed property; &
• Supervise closing in a reasonably prudent manner
• Pay escrowed property to closing or settlement agent
timely
• Usually money
• Needs to be collected funds

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 Closing Agent Duties
• Work in best interest of all parties including lender
• Know the contract
• Transaction begins & ends with contract
• Follow provisions in contract
• Follow timelines in contract
• Review title
• Clear title items – B-I (to do list)
• Clear possible B-II items to provide more coverage
• Follow lender’s instructions

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Disbursements to Brokers
• Chapter 475, F. S. governs licensed real estate brokers
• Licensed salespeople work for brokers &
• Must be paid through brokers
• “Closing Disbursement of Brokerage Commissions”, 44
Fund Concept 47 (June 2012)

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 Disbursements to Brokers
• Which broker(s) do I pay at closing?
• Listing broker
• Selling broker or
• Both
• Who pays the brokers commission?
• Seller
• Buyer or
• Both
• How do I know?
• Review the sales contract, introduce yourself as closing agent
& confirm commission amount & payment
• Can I ever pay a salesperson directly?
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Closing Agent Responsibilities

• Paraprofessionals support Fund Member in:
• Appropriate representation of parties
• Evaluating title
• Assuring accurate closing documents
• Assisting in & preparing to exchange funds – settling the
transaction
• Recording documents
• Following lender’s directives
• Issuing title policy(ies)
• Complying with regulations
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 Cyber Security &
Wire Transfer Fraud

Overview
• Cyber risks
• Business Email Compromise (BEC)
• Phishing attempts
• Defenses
• Passwords
• Wire transfers

2
 Cyber Risks

Cyber Security in the Age of Cyber-Crime

• Types of attacks
• Malware (Malicious Software)
• Ransomware (Fast Growing)
• Password Attacks (Guess Passwords)
• Zero-Day Attacks (Who Knew?)
• Insider Attacks (Disgruntled Employee)
• Other attacks
• Man in the Middle (MitM) – Public WiFi
• DDoS, APT, CSS, SQL Injection
• Social Engineering (You Don’t Say!)
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 Real Estate Market
• Lucrative
• Average wire transfer loss: $200,000
• Average bank robbery: $7,000
• Multiple parties communicating electronically
• Chain only as strong as weakest link
• Transaction location irrelevant
• Fraud tools easily found online
• Phishing kits & other technical tools
• Little technical knowledge needed
• Attorney, agency, broker, FSBO listings
• Fraudster sweatshops
• Required minimum success hits per week 5

Perpetrator Tactics
• Computer Intrusion
• Malicious attachment or link
• Activating gives computer access
• Hacker monitors email traffic
• Sends email from hacked account
• Social Engineering
• Non-technical manipulation
• Use of knowledge gained from hacked computer and publicly available
resources
• Exploit knowledge of chaos surrounding closing and last minute need to wire
funds

6
 Losses

Best Practices Pillar 3 – Privacy & Information Security

• Adopt and maintain a written privacy & information security plan
to protect Non-public Personal Information (NPPI) as required
by local, state and federal law
• Physical Security
• Network Security
• Disposal
• Disaster Management Plan
• Training
• Use of Service Providers
• Notification

8
 Business Email
Compromise

BEC Real Estate Fraud

1. Gain access to email account (“hack”)
2. Monitor for pending transactions
3. Commandeer real email address &
create lookalike email addresses
(“spoof”) for other participants
4. Email bogus wire transfer instructions
5. Funds wired to criminal-controlled
account
6. Funds dispersed and trail goes cold

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 Account Takeover

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Computer Intrusion
• Malware (malicious software)
• Display unwanted advertising
• Disrupt computer operations
• Gather sensitive information
• Gain access to private computer
systems

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 Bogus Email to Agent

October 17, 2023

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Spoofed Buyer Email

October 17, 2023

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 Spoofed Email
• Tim:
tsmith@gmail.com
• Fraudulent Tim:
tsmith1@gmail.com

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Agent Emails “Parties”

October 17, 2023

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 Auto-deleted

October 17, 2023

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Spoofed Agent Email

October 17, 2023

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 Spoofed Email
• Melissa:
mdombrowski@suntitleagency.com
• Fraudulent Melissa:
mdombrowski@suntit1eagency.com
• Melissa:
mdombrowski@suntitleagency.com
• Fraudulent Melissa:
mdombrowski@suntit1eagency.com

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Auto-delete / Buyer Opens

October 17, 2023

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 Spoofed Buyer Email

October 17, 2023

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Bogus Email to Buyer

October 17, 2023

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 Buyer Initiates Transfer

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Buyer Confirms Wire

October 17, 2023

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 Phishing Attempts

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Phishing Attempts
• Very Commonly Deployed Cybertheft
• Unsuspecting Individuals in Email
• Attempts to Collect Sensitive Information
• Login Credentials, CC#, Etc.
• Links to Fraudulent Websites
• Looks Legitimate on the Surface
• Uses Social Engineering
• Looks and Feels Familiar
• Spear Phishing: Advanced, Very Targeted

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 Hook, Line & Sinker
• Launch & wait
• Broker, agency & title firm targets
• Multiple email accounts receive malignant spam
• Victim’s “click” silently downloads malware
• Malware responds
• Sets up new default rules for account
• Auto-forwards to fraudster’s server any email containing keywords
(e.g., purchase, escrow, contract, down payment, cash, etc.)
• Auto-delete replies to hacker initiated email
• “Mines” account for NPPI, etc.

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Phishing Attempts
• Intruder seeks access to computer system by enticing user to
“click” email attachment or link to malicious site
• Forged messages appear to be from legitimate, real estate-
related sources
• “DocuSign”
• “Dropbox”
• “Real” underwriters, banks, title companies
• Letterhead/signature blocks of actual parties reproduced
• Once “clicked”
• Malware infects system &
• “SPAMs” user contact list
• Intruder can read/alter/redirect messages to defraud parties of infected
systems 28

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 Example

Renee Realtor, Tom Title Agent

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Example

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 Example

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Example

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 “Avoid” the Phishing Tricks
1. Urgency or Threats
2. Pressure to Do Something
3. Request Sensitive Information
4. Spelling and Grammar Issues
5. Odd Email Addresses (To, From, Reply)
6. Too Good to Be True
7. Call the Sender to Confirm
8. Common Sense

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Defenses

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 Cyber Security
• Antivirus Software • 3rd Party Assessment
• Firewalls • Patch Management
• Encryption • Vulnerability Scan
• Password Protection • 2FA or MFA
• Email Security
• Data Backups

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Antivirus Software – (Malware Protection)

• Most common protection deployed
• Defends against most Malware
• Ransomware Protection
• Drive-by Protection
• Desktop and Server Protection
• Gateway (Internet) Protection
• Keep it Updated!

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 Firewalls – (Hardware or Software)

• Adds a Layer of Protection

• Prevents Unauthorized Access
• Protects at the Gateway
• Protects at the Computer
• Provide Intrusion Protection
• Blocks Network Attacks

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Encryption
• The process of encoding a message or information in
such a way that only authorized parties can access it
and those who are not authorized cannot

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 Encryption – (Hardware or Software)
• Strong Data Protection
• Makes Data Unreadable to Hackers
• Protects Stored Data (file, volume, disk)
• Protects Data in Transit (https)
• Secure Email with Encryption
• Protects NPI, PII, PHI

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Passwords – Unique to each site

• If your common password is discovered
• Will have access to all accounts which use that password
• New rule – have better passwords & less changes
• More compliance
• Longer passwords are better passwords

Too Simple Better

H0use BigHouse$123
Cat in the Hat Correct horse battery staple
My beautiful red house Seashell glaring molasses invisible

• LONG PASSWORDS ARE STRONG PASSWORDS

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 Password Managers
• Encrypted vault for login • LastPass
credentials • Dashlane
• May also save • 1Password
• Notes
• Insurance cards
• Keeper
• Credit card information • Sticky password
• Issue security alerts • Intel’s True Key
• Generate passwords • RoboForm
• Streamlines logins • Iolo Technologies
• Break bad habits • EveryKey
• Unique passwords • My PassLock
• Change passwords
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Password Multipart Authentication

• Process – How to know its really you
• Five common authentication factors
1 Something you know
• Password, address, other names, first car, etc.
2 Something you have
• Site sends a code or token witch expires within a short time
3 Something you are
• Fingerprint, retina, iris, voice, fact, etc.
4 Somewhere you are
• IP address – it knows your computer
5 Something you do
• Gestures or touches
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 Passwords – Tips
1. Don’t use obvious personal information
2. Don’t re-use passwords
3. Don’t share your passwords – with ANYONE
• Don’t post your passwords
4. Use unique password for each site
5. Use password manager
6. Change your password regularly, or
• Indication that you have been hacked
7. Use multi-factor authentication
• Just turn it ON

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Email Security
• Protects Against Malicious Emails
• Built-in Malware Protection
• Ransomware
• Attachments, Payloads
• Spam Filtering
• Phishing Attacks
• Spear-Phishing
• Secure Email Transfer

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 Cyber Fraud Defense
• Do not use free email
accounts for business
purposes (e.g., AOL, Gmail,
Yahoo, etc.)
• Easier to hack
• Create contact information log
at the outset of transaction with
all parties’ phone numbers

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Data Backups
• Critical to Have a Backup
• Something Will Go Wrong
• Accidental Deletion
• Rogue Employee
• Corrupted File
• Hacker Activity (Ransomware)
• Backups are the Solution
• Easy to Setup and Maintain
• Keep You in Business

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 Third Party Assessment
• Consider a 3rd party vendor
• Security assessments
• Risk assessments
• Discovery & remediation
• Sign-up for notifications with product vendors
• Stay in the know with security websites
• Attend local cyber security workshops
• Register for cyber security webinars

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Resources
• IT Security Awareness Training
• SANS: https://www.sans.org/security-awareness-training
• SANS Ouch!: https://www.sans.org/ouch
• Phishing Tests/Tools
• KnowBe4: https://www.knowbe4.com/resources
• Phishme: https://phishme.com/free
• Multi-Factor Authentication: https://twofactorauth.org
• Security News: www.krebsonsecurity.com
• Mail System Check: https://mxtoolbox.com
• Breach Check: https://haveibeenpwned.com/
• Best Practices: https://www.cisecurity.org
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 Cyber Fraud Defense
• Have parties sign funds transfer agreement at beginning of
transaction
• If procedure changes confirm by calling phone number in log
• Beware of pressure to quickly change payment arrangements
• Slow down
• Stay in control of the transaction
• Verbal confirmation includes reading wire instructions (just like
confirming legal descriptions)
• Implement two-part authentication on all wire transfers

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49

Wire Transfers

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 Wire Transfer – Facts
• Wire transfer fraud in US Real Estate only – 2018 statistics
• $149,457,144.00 in 2018
• $ 12,454,759.50 per month!
•$ 409,471.63 EVERY DAY! And growing

• FBI – labeled the scams as “business email compromise” or BEC

• Fraudsters create urgency – MUST BE DONE NOW!!!

• 2018 - Florida national ranking for BEC fraud

• Number of victims – 3rd
• Amount of funds lost – 4th
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Wire Transfer
• Warn, warn, warn clients; then warn again
• Websites
• Communications – emails etc.
• Send separate notice to clients & real estate agents
• Call for verification – let client know ahead of time

• Verify – verify – verify

• Think!!

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 Wire Transfer – VERIFY
• Verify account holder information with receiving bank prior
to initiating the wire transfer!

• Verify wire account information on payoff letter – use

known number!

• Verify wire account information of seller – use known

number!
• Verify the ABA number –
• routingnumber.aba.com/default1.aspx
• Routingnumber.com
• Google bank – i.e. USAA aba number
• https://bank.codes/us-routing-number/bank/
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Wire Transfers – Warning Verbiage

• Be aware! Online banking fraud is on the rise. If you receive an email
containing WIRE TRANSFER INSTRUCTIONS call us immediately to verify the
information prior to sending funds.

• Due to increased fraud, buyers, sellers and lenders should confirm all wiring
instructions by phone directly with our office before transferring funds.

• WARNING! WIRE FRAUD ADVISORY: Wire fraud and email hacking/phishing

attacks are on the increase! If you have an escrow or closing transaction with
us and you receive an email containing Wire Transfer Instructions, DO NOT
RESPOND TO THE EMAIL! Instead, call your escrow officer/closer
immediately, using previously known contact information and NOT information
provided in the email, to verify the information prior to sending funds.
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 Wire Transfers – Use Outgoing Wire Checklist

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Wire Transfers – Use Outgoing Wire Checklist

1. Review the source of wiring instructions
• Originally
• Where they changes, if so what was the verification of the change
2. Verify instruction received
• How sent
• Call trusted number to ensure receipt
• List wire creator & authorizer
3. Verify delivery of wired funds
• Call to verify receipt

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 Wire Transfers – Best Laid Plans of Mice & Men
• No matter how many warning or how careful you are –
something will go wrong
• Review insurance to ensure proper coverage
• Losses from wire fraud
• Email is hacks and false information is sent out
• Fraudster obtains information and uses it to defraud a party – information may
have come from another party in the transaction
• Have a plan – SPEED IS OF THE ESSENCE

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Wire Transfers – ALTA Rapid Response Plan

1. Alert company management & internal wire fraud response team
2. Report to sending & receiving banks
3. Report to law enforcement
4. Call sending bank to confirm recall request has been processed
5. Inform parties in the transaction – using known numbers
6. Check with your plan to see if you need to secure internally
7. Consider contacting insurance carrier(s)
8. If wired out of the US, hire attorney in that country to help recovery
9. Document you response
10.File complaint with FBI
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 Wire Transfers TIPS
• 1. Call, don’t email wire instructions
• If you receive email instructions – do not use the number in the email to
verify the instructions
• 2. Use secure portals for communications
• 3. Verify all wire transfers instructions and portal invitations
• Known numbers
• 4. Be suspicious
• Be wary of email requesting changes in information
• 5. Forward, don’t reply
• If email came from look-a-like address it will then go to correct mail
address
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Wire Transfers TIPS

• 6. Confirm everything
• Have bank confirm the name and account prior to sending the wire
• 7. Verify that the funds transferred immediately
• 8. Confirm receipt of wires
• 9. Sender of wire to initiate phone calls verifying information
• 10. Warn all parties of BEC and wire fraud

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 Base Title
Where to Begin the Search

What is Base Title?

• A point in time in the past to begin search and examination of
title for insuring purposes
• Not ordering a Fund product find that starting point from:
• Prior Title Policy
• Title Assumption Certificate
• Title Search Report, etc.
• Fund Product will complete this task for you

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6 Possible Sources of Base Title
I. Prior policy - same lot or unit
II. Prior policy - same lot + additional land
III. Title Assumption Certificate issued by The Fund – same lot
IV. Prior Fund or ORNTIC policies - nearby lots same
subdivision
V. Plat or Declaration - at least 7 years of record
VI. Title Search Report issued by The Fund

All Searched Should Include

• Run a 20-year name search
• All parties having had an ownership beginning with base title
• Exceptions in prior policies carried forward to Schedule B of
new commitment, unless cleared of record

4
I. Prior Policy – Same Lot or Unit
• Best source of base title: easiest & fastest
• KEY - Helps when ordering new commitment
• Prior policy covering exact same lot to be insured may be current
owner or prior owner, including
• Legal description
• Recording information
• Type of policy
• Amount of policy &
• Policy serial number, if known
• Begin search
• Owner’s Policy – search from prior effective date or
• Loan Policy – search from recordation of mortgagor’s deed
5

II. Prior Policy – Same Lot + Additional Land

• Prior covering exactly the same lot to be insured, & additional land
• Legal description
• Recording information
• Type of policy
• Amount of policy &
• Policy serial number, if known
• Some prior policy exceptions may be inapplicable to proposed
insured land
• Begin search
• Owner’s Policy – search from prior effective date or
• Loan Policy – search from recordation of mortgagor’s deed
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III. Title Assumption Certificate – Issued by The Fund
• Title Assumption Certificate (TAC) is a title information product
provided by a Fund Branch
• Available on some Plats & Declarations of Condominium in
various Florida locations
• To determine availability
• Contact Branch or
• Use ATIDS
• Begin search from recording date of the Plat/Declaration as
stated on TAC

IV. Prior Fund or ORNTIC Policies – Nearby Lots/Units

• Policies on nearby lots/units in same platted subdivision or
condominium
• Prior Fund or ORNTIC policies only
• Minimum two prior policies, three better
• Issued by separate agents
• Locate lot to be insured on Plat
• Not every lot in same platted subdivision has same restrictions &
easements
• Assume developer’s title was good
• Begin search from conveyance out of developer

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V. Plat or Declaration – At Least 7 Years of Record
• Once Plat/Declaration recorded of record for at least 7 years
• Assume developer’s title is good
• Verify release of developer’s mortgage(s) as to lot to be insured
• Member must examine Plat for specific lot for particulars
• Exceptions & restrictions on subdivision must be carried forward
to Schedule B of new commitment & policies to be insured,
unless cleared of record
• Begin search from deed into developer

VI. Title Search Report

• Title Search Report (TSR) is a Fund unexamined branch
product
• Delivery of all organized title related documents from base title
to present for your examination
• All instruments must be examined by Fund member or
paraprofessional to determine ownership & applicable
restrictions & exceptions for preparation of commitment and
policies
• Begin search was determined by The Fund

10
Ordering Most Common Fund Products
• Unexamined products
• 07 – Title Search Report
• Examined products
• 20 – Commitment only
• 24 – Commitment and Final Policy
• No review of policy only typing of final policy

11

Resources
• In this chapter of Course Manual
• Examples
• Prior Policy
• Title Assumption Certificate
• Title Search Report
• Concept articles
• “Base Title –Using Prior Policies Covering Other Parcels Within the
Same Development,” 34 Fund Concept 135 (Sept. 2002)
• “Fund and ORNTIC Policies as Base Title,” 44 Fund Concept 23 (Mar.
2012)

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Special Consideration
• Proposed Policies Over $1 Million
• Member must have approval from Underwriting unless they
are working with a branch prepared commitment in excess
of $1 Million
• Assess risk of claims and to establish exceptions and
exclusions

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