Real estate agent and customers shaking hands together celebrating finished contract after about home insurance and investment loan, handshake and successful deal.

Important Compliance Update from TREC

Realtors Subject to New TREC Rules Prohibiting Pay-to-Play Programs

Reminder: RESPA, P-53 and Anti-Rebating Statutes Remain in Effect for Title Agents and Are Enforced

The Texas Real Estate Commission (TREC) recently amended their rules related to rebates and specifically highlighted the prohibition of pay-to-play arrangements in the real estate marketplace. TREC said their amended rules are intended to strengthen settlement service provider independence and provide clarity for TREC license holders regarding consumer protections that also exist under state and federal rules and statutes.

To enhance your understanding of TREC’s expanded regulations, we recommend you read TREC’s explanation of their pay-to-play rule revisions. 

Here’s TREC’s expanded §535.148 related to receipt of undisclosed commissions or rebates:

(d) A license holder may not pay or receive a fee or other valuable consideration to or from any other settlement service provider for, but not limited to, the following:

  1. the referral of inspections, lenders, mortgage brokers, or title companies;
  2. inclusion on a list of inspectors, preferred settlement providers, or similar arrangements; or
  3. inclusion on lists of inspectors or other settlement providers contingent on other financial agreements.

(e) In this section, “settlement service” means a service provided in connection with a prospective or actual settlement, and “settlement service provider” includes, but is not limited to, any one or more of the following:

  1. a federally related mortgage loan originator;
  2. a mortgage broker;
  3. a lender or other person who provides any service related to the origination, processing or funding of a real estate loan;
  4. a title service provider;

Read TREC’s explanation of the changes »

Title Agents Are Subject to P-53, RESPA, and Anti-Rebating Statutes 

Title agents are subject to federal and state rules and statutes–including the Real Estate Settlement Procedures Act (RESPA) and TDI’s Rule P-53–prohibiting marketing-related rebating practices.

In response to questions from title industry professionals regarding the continued applicability of TDI’s P-53 rule, TLTA has compiled background information, FAQs, and other helpful resources related to the state and federal statutes that prohibit marketing-related rebating practices.

TLTA’s Anti-Rebating Resources for Title Professionals »

In 2004, the Texas Department of Insurance (TDI) adopted Procedural Rule 53 (P-53), which prohibits rebates and discounts for the soliciting or referring of title insurance business. P-53 is an important market conduct rule that serves to protect consumers and maintain an ethical Texas title insurance industry.  

There are also federal and state statutes that prohibit marketing-related rebating practices, as follows:

Federal Law

Under the federal government’s Real Estate Settlement Procedures Act (RESPA), kickbacks and unearned fees are prohibited, and a person cannot give or accept anything of value for a referral incident relating to or part of a settlement service involving a federally related mortgage loan. Consumer Financial Protection Bureau (CFPB) is responsible for enforcing RESPA, as well as state attorneys general.

Review the federal statute: RESPA – Section 8
Review CFPB’s rule: 12 CFR § 1024.14 

State Law

The state statute goes a step further than federal law, specifically citing the title insurance industry. In addition to prohibiting rebates and discounts, the statute states that any “thing of value” may not be “directly or indirectly paid, allowed, or permitted by a person engaged in the business of title insurance or received or accepted by a person for engaging in the business of title insurance or for soliciting or referring title insurance business.”

Review the state statute: Texas Insurance Code  §2502.051


Is P-53 enforced?
Yes, TDI’s disciplinary orders include P-53 violations. Disciplinary orders dated 2013 and older must be requested via open records request.

What is the difference between RESPA and P-53?
RESPA is the federal statute addressing the referral of settlement services and includes the typical activities of Texas title agents. RESPA is enforced by the CFPB. Procedural Rule 53 implements and clarifies the Texas statute as it relates to discounts and things of value used to solicit or refer title insurance business. TDI enforces P-53.

How do I determine if I’m in compliance?
In general, the TDI rule and other applicable statutes were not written with black-and-white examples to guide you. If you’re unsure about your actions and how P-53 might be applied to them, please consult your regulatory counsel.

The statute and rule do offer some clear guidance on how to comply, however. For instance, a title agent or company cannot give a thing of value conditioned on the referral of title insurance or provide a rebate to the consumer.

Past examples of violations include any activities that subsidize or pay for what would be business expenses for a Realtor or any other producer of title insurance business, such as printing sales materials or providing meeting or office space. Additional examples include reducing other fees in the transaction such as an escrow fee on an ad hoc or conditional basis. These are just some examples and there are many others – this is not intended to be an exhaustive list. Again, the best course of action if you are unsure is to consult legal counsel to ensure you are in compliance.

What should I do if I have information about a P-53 violation?
First, consider contacting the management at the companies involved, and alert them that they are engaged in activity that concerns you. If the suspected violation of P-53 does not stop, you can submit a formal complaint to the Texas Department of Insurance. Once you file a complaint, TDI will keep you informed of the progress and final resolution of the complaint.

The complaint you submit will be publicly available (i.e., this is not an anonymous process).

Source: TLTA

signing papers republic title

Does Extending the Closing Date Extend a Contingency Date?

Below, please find helpful information that was posted on


Members have called regarding situations where a contract is signed with an attached Addendum for Sale of Other Property by Buyer (TXR 1908) and the buyer will not obtain proceeds from the sale of her other home by the contingency date stated in Paragraph A. Callers ask if extending the closing date on the sales contract will also extend the contingency date in Paragraph A, thereby giving the buyer the additional time she needs to obtain her proceeds. No. An amendment extending the closing date does not automatically extend the contingency date in Paragraph A. Paragraph A of the Addendum for Sale of Other Property by Buyer states that if the contingency is not satisfied or waived by the contingency date then the contract will terminate automatically. A buyer wishing to continue in a transaction past the contingency date without having obtained her proceeds would have to waive the contingency. Alternatively, if the parties want to change the contingency date in Paragraph A, then that change must be specifically addressed in an amendment.


DFW Area Holiday Events

It is that special time of year. We have compiled this list for local events around our area that are great for the whole family. 

Click here if you would like a printable version.

Dallas Ranks #2 on Forbes List for Best Places for Business and Careers

The Dallas metro division has the sixth-largest population in the U.S. with 5 million people. Dallas has developed a strong industrial and financial sector, as well as becoming a major inland port, due largely to the presence of Dallas/Fort Worth International Airport, one of the largest and busiest airports in the world. The city is home to University of Texas Southwestern Medical School, Texas Woman’s University, University of North Texas at Dallas, Paul Quinn College as well as a number of religious affiliated and community colleges. The most notable event held in Dallas is the State Fair of Texas, which has been held each year at Fair Park since 1886, bringing an estimated $350 million to the city’s economy annually. The Red River Shootout, which pits the football teams of University of Texas at Austin and University of Oklahoma against one another at the Cotton Bowl, also brings significant crowds to the city.

At a Glance
  • Population: 5,007,200
  • Major Industries: Technology, Financial services, Defense
  • Gross Metro Product: $380.5 B
  • Median Household Income: $72,205
  • Median Home Price: $284,000
  • Unemployment: 3.3%
  • Job Growth (2018): 2.4%
  • Cost of Living: 12% above nat’l avg
  • College Attainment: 37.1%
  • Net Migration (2018): 11,570


October Stats Are In!

Our Stats at a Glance are here!  Click here to see our new format of the stats by county.  For more detailed information, check out this link.  Or for full stats by county, click here.  If you need past DFW Real Estate Stats information, please visit our Resource Section located on all of our office pages.

Close-up view on conceptual keyboard - Digital Signature (blue key)

Four Imperatives as Lenders Evaluate eClosing Options

Shifting consumer expectations, increasing market pressures and momentum for regulatory changes may make 2019 the year the mortgage and title industries accelerate the adoption of eClosing.

It’s no secret that consumers demand a more digital, more efficient real estate closing process. At the same time, mortgage lender profits are under pressure amid a cooling housing market and rising mortgage rates. And, across the U.S., state legislation is maturing in areas of eNotarization and Remote Online Notarization. These factors, along with widely available eSignature standards, are poised to accelerate broader acceptance of fully digital eClosings in real estate transactions in 2019.

Consider also that 65 percent of lenders who expect profit margins to increase in the next three months believed technology would be the most important reason for the expected increase, according to Fannie Mae’s fourth quarter 2018 Mortgage Lender Sentiment Survey (

Settlement providers are adapting as well. First American Chief Economist Mark Fleming recently surveyed title agents and real estate professionals and found 65 percent of respondents anticipate needing software support for Remote Online Notarization and eClosing, and secure collaboration and communication portals, in the next 12 months (

It appears that in 2019 the industry may make significant strides toward delivering a real estate transaction closing experience that aligns with the digital home search and loan application experience that has become commonplace. As with most opportunities, there are real challenges to overcome. Lenders are wise to thoroughly evaluate how to best offer eClosing options to consumers, as there are many important considerations to study and some of the industry hype around eClosings can be misleading.

Settlement providers have a unique perspective on many of these challenges given their role in closing real estate transactions. First American recently launched an eClosing solution and is engaged with multiple customers on pilot tests. In the process, we’ve gained significant experience and uncovered some important findings that, if handled appropriately, may have the ability to enhance the progress towards adoption of eClosings (

1. The Workflow Matters
Switching from a traditional paper-based signing event to an eClosing with a digital signing event requires more than the ability to eSign documents on a portal. Coordination, communication and document preparation are paramount regardless of whether the consumer signs with a pen or the click of a mouse.

In order to scale, the workflow must be more efficient than today’s paper process for both the lender and the title and settlement provider to accelerate adoption. Minimizing any additional work needed by loan processors or title and settlement agents to prepare for an eClosing versus a paper closing can facilitate greater adoption, which will help lenders more quickly reap the potential benefits of eClosings–enhanced efficiency and reduced cost to close transactions. Understanding the full signing process, including scheduling, communication, coordination, lender and title document preparation and final execution, is critical to creating an improved, digital version of the paper process.

2. Recordability is in the Eye of the County Recorder
There are thousands of county recorders in the U.S. and their views on the recordability of eSigned and native digital documents, which are used in RON and in-person eClosing transactions, can vary greatly. We’ve interviewed dozens of staff at county recorders in states that recently passed legislation supporting RON eClosings, and found varying degrees of readiness for eSigned and native digital documents. That’s important because, if documents do not adhere to state and local laws, eSigned debt obligations can be reversed in bankruptcy court, for example.

3. Build it vs. Buy it
Mortgage lenders have a variety of options on how to approach eClosing, including building their own proprietary technology, purchasing an eClosing platform from a technology vendor or working with an established settlement provider to handle digital settlement. Each mortgage lender will choose the path that best serves their customers and operations. However, for lenders who choose to bring some settlement processes in-house, it’s important to remember that doing so entails assuming the risk, control and coordination of the signing event and signing process, which many lenders and lender staff do not traditionally coordinate.

Similarly, most lenders work with many different settlement providers. So, lenders that choose to purchase or build their own eClosing platform will need to train their settlement providers on how to use the lender’s platform, including how to incorporate the title documents into the eClosing package. In a purchase market, and with typical industry turnover rates, this training process becomes an ongoing effort and expense.

4. Settlement-Driven eClosing
Some lenders may prefer their title and settlement provider handle eClosing and thus maintain the coordination and management of the signing event, along with the responsibility and risk associated with it. Each individual lender’s approach to eClosing will differ somewhat and title and settlement providers need flexibility to accommodate nuances between various approaches. This would, however, eliminate the need for lenders to own, pay for and manage the process and platforms used.

While the changes that come with bringing eClosing to the market are new, lenders and settlement providers have a long history of working in concert to complete real estate transactions with high quality. Open communication and collaboration will continue to deliver the best results for lenders, settlement providers and consumers as the real estate industry marches toward the secure, scalable adoption of eClosings.

Disclaimer: This article is intended for educational and informational purposes only. The views and opinions expressed in this article are solely those of this author, and do not necessarily reflect the views, opinions, or policies of this author’s employer, First American Mortgage Solutions.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA Insights welcomes your submissions. Inquiries can be sent to Mike Sorohan, editor, at; or Michael Tucker, editorial manager, at



Sold house sign in Midwest suburban setting. Focus on sign.

Texas Home Sales Continue To Increase In 3rd Quarter

Texas home sales increased 6.4%—to 100,733 sales in the third quarter of 2019—compared to the same period last year, according to the 2019 Q3 Texas Quarterly Housing Report released today by Texas REALTORS®.

The statewide median home price for the quarter also increased to $245,000, a 4.3% increase over the third quarter of 2018. Of all sales during the third quarter of 2019, 33.4% were priced from $200,000 to $299,999. Homes priced from $100,000 to $199,999 represented 26.9% of sales for the quarter.

“Texas ended the summer selling season with continued growth in home sales and median price in most of the major markets,” said Tray Bates, chairman of Texas REALTORS®. “Our housing market remains healthy due to strong demand and steady increases in housing inventory.”

There was an increase of active listings from the previous year of 3.5% for 111,013 listings in the third quarter of 2019. Texas homes spent an average of 54 days on the market, two days longer than the same quarter last year. 

“The Texas housing market continued to spur strong demand during the third quarter,” said Jim Gaines, Ph.D., chief economist with the Real Estate Center at Texas A&M University. “Based on sales activity, we saw prices, months of inventory, and active listings all experience significant growth in most of the markets across the state. During the remainder of the year, we expect attractive interest rates to incentivize homebuyers. In addition, new home construction will continue to pick up in markets such as Houston and Dallas, leading to an increase in housing inventory availability.”


Hailstorm on the road in a summer day

How To Stay Safe If You’re Caught On The Road In A Hailstorm

With all of the crazy weather we have in our area, here is some great suggestions on how to stay safe when you are caught on the road during a storm.

Texas is known for some severe weather.  It can cause fear in even the most seasoned of drivers, but being prepared in advance can help alleviate that fear.  If you’re caught driving in a hailstorm, you can always get to safety in short order, but there are precautionary steps you can take. Driving during one of these disastrous storms can be terrifying and has the potential of causing accidents, injury, and sometimes worse.  Be aware of your surroundings, and if you suspect that a hail storm is on its way, try to make arrangements to get off the road at your earliest and safest convenience.  If you’re unable to do so, here are some tips for staying safe on Texas roads when driving in a hailstorm:

  • Turn on your low beam headlights. reduce your speed, and maintain awareness of other vehicles.
  • If you have to continue driving until you can find safety, give yourself three times the normal distance between your vehicle and the one ahead, to avoid any rear-end collisions.
  • Pull over to the side of the road or the nearest spot with shelter and stay inside the vehicle.  However, do not park under an overpass and impeded the flow of traffic. With the high rate of speed that hail falls at, people are easily injured in its path.  This may also mitigate damage to your windshield or windows. since driving can compound the impact.  Also, if you’re on the shoulder of the road, ensure your vehicle is completely out of the line of traffic.
  • Avoid ditches due to the possibility of rising water.
  • If possible, ensure your vehicle is such that the hail hits the front of it.  With reinforced glass, windshields are able to better withstand the pelting of some hail.
  • If you’re able to, lie down in the vehicle, with your back to the windows.  And, if one is handy, cover yourself with a blanket to prevent injury from possible debris.

Stay Safe!


Can Your Unlicensed Assistant Do That? –

Along with setting rules for licensees, the Texas Real Estate Commission also governs what your unlicensed assistants can do on your behalf. The latest Texas REALTORS® legal explainer video tests your knowledge of what tasks your unlicensed assistant can handle and what you as the licensee need to take care of yourself.


house graphic republic title

Texas Housing Insight

Here is a great post from Texas A&M Real Estate Center regarding home sales for September.


Seasonally adjusted Texas housing sales decreased 2 percent in September from August after hovering around record levels the previous two months. Low mortgage rates and steady employment growth, however, supported ongoing housing demand, as exemplified by increased mortgage applications and a rise in the state’s homeownership rate. The average home continued to sell after just two months on the market. On the supply side, increased single-family permits, housing starts, and lot development indicate positive momentum for future construction. Presently, however, available inventories remain constrained, putting upward pressure on home prices, which have persistently outpaced wages. Affordability remains a primary challenge to the Texas home market, but the extended national and state economic expansion supports a favorable outlook.


The Texas Residential Construction Cycle (Coincident) Index, which measures current construction activity, ticked up with industry labor market improvements. The Residential Construction Leading Index rose to its highest level since the Great Recession amid falling interest rates and upward-trending building permits and housing starts. This suggests higher levels of construction in the coming months.

Supply-side activity accelerated at the earliest stage of the construction cycle with a 29.7 percent quarterly increase in the number of new vacant developed lots (VDLs) in the four major Metropolitan Statistical Areas. DFW’s VDLs accounted for much of the surge, rebounding after a year-long decline. The correction occurred primarily in the $200,000-$500,000 range. Improvements in North Texas and San Antonio boosted their VDLs to post-recession record levels. Lot development in San Antonio and Houston picked up for homes selling for less than $300,000; activity targeted for higher-priced homes in Houston, however, pulled back. New VDLs reached an all-time high in Austin following three straight quarterly increases.

As VDLs surged upward, single-family construction permits hovered at a post-recession record high, increasing 9.9 percent quarter over quarter (QOQ). Permit activity through September, however, remained 2 percent below levels in the first nine months of 2018. Texas’ 10,193 monthly permits (nonseasonally adjusted) accounted for 17 percent of the national total. The Lone Star State led the nation in total permits but ranked sixth in per capita issuance. On the metropolitan level, Houston topped the list with 3,371 permits, followed by DFW with 3,058. Central Texas extended a steep upward trend, issuing 1,440 and 737 permits in Austin and San Antonio, respectively.

Total Texas housing starts rose 6.3 percent QOQ as momentum shifted from the multifamily to single-family sector based on Metrostudy data. Approximately 24,000 single-family homes broke ground in the Texas Urban Triangle, rebounding to solid first-quarter levels. Half of the increase occurred in the constrained $200,000-$400,000 price range. Trending similar to VDLs, Austin single-family starts maintained a solid pace upward, while Houston held steady at its year-long average. San Antonio activity showed moderate improvement. DFW was the exception, with starts decreasing slightly following a year-long period of downward VDL and permit adjustments. Corroborating improved residential construction, single-family private construction values increased 3 percent during the third quarter. The trend, however, remained flat except in San Antonio.

Despite increased housing starts, Texas’ months of inventory (MOI) held steady at 3.6 months. A total MOI around six months is considered a balanced housing market. The MOI for homes priced less than $300,000, which comprised two-thirds of sales, balanced below 2.8 months. Inventory for luxury homes (those priced more than $500,000), however, increased for the fifth consecutive month to 8.4 months. These divergent trends exemplify the shortage of affordable housing and the current mismatch between demand and supply.

Inventory in the major metros were even more constrained than the statewide average. The MOI fell to year to date (YTD) lows of 2.3 and 3.1 months in Austin and Dallas, respectively. Fort Worth’s and San Antonio’s metrics eased slightly after a three-month slide in both locales but hovered at 2.5 and 3.5 months, respectively. The exception was Houston, where the MOI remained at 3.9 months.


Total housing sales fell 2 percent in September but maintained an upward trajectory amid lower mortgage rates and solid job market conditions. Meanwhile, existing-home sales, which make up 80 percent of total sales, decreased 2.6 percent. Nonseasonally adjusted total sales increased 8.6 percent from September 2018; after accounting for the number of business days, however, sales increased only 4.5 percent over the same period.

According to Metrostudy data, third quarter new home sales approached 25,000 in the Texas Urban Triangle for the first time since 2007, corroborating the overall strength of the state’s housing market. An increase in new-home transactions priced $300,000-$400,000 comprised over half of the quarterly improvement. Austin sold a record level 4,783 new homes during the third quarter, surpassing 20 percent year-over-year (YOY) growth. San Antonio maintained sales pace of 15 percent YOY, accounting for 3,200 new-home transactions. Dallas and Houston constituted more than two-thirds of the new home purchases, selling 9,015 and 7,712, respectively.

Texas’ average days on market (DOM) held steady at 60 days. The metrics in Dallas and Houston, where over 40 percent of statewide sales take place, remained unchanged at 56 and 59 days, respectively. Fort Worth’s DOM paused after reaching a four-year high in August of 45 days. On the other hand, Central Texas reached YTD lows of 52 and 56 days in Austin and San Antonio, respectively.

In an environment of extended economic expansion and steady job growth, Texas’ homeownership rate increased to 63 percent in 3Q2019. The national rate held firmly higher at 64.8 percent. Homeownership is persistently lower in the major metros but trended upwards. DFW ranked first among the metropolitan areas with 62.1 percent of occupied housing units being owner-occupied. Austin and Houston each posted 61.6 percent homeownership. San Antonio’s homeownership rate was 60.4 percent amid a decrease in apartment vacancy rates. The contrasting trends may indicate a recent inclination of households to rent rather than buy.

Better than expected U.S. economic data and a slightly optimistic outlook on U.S.-China trade talks slowed the downward slide in interest rates. Although long-term rates remained lower than those for short-term instruments, current economic fundamentals at the state and national level are healthy and stable. Short-term interest rates could fall further following the Federal Reserve’s third rate cut of the year in October. The ten-year U.S. Treasury bond yield inched up to 1.7 percent after falling to a three-year low of 1.6 percent in August. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate flattened at 3.6 percent. Texans capitalized on lower rates, pushing mortgage applications for home purchases up 28.3 percent YTD. Refinance mortgage applications, which are more sensitive to interest rate fluctuations, have more than doubled since year end.


The Texas median home price increased for the fourth consecutive month, reaching $243,800 for an annual growth rate of 5.1 percent. Although home-price appreciation accelerated, growth was below the double-digit levels YOY reached as recently as 2017. Austin led the metros in terms of median home price at $327,300. North Texas followed with a median price of $297,000 and $247,300 in Dallas and Fort Worth, respectively. Houston’s metric balanced at $246,800. The San Antonio median price increased to $236,000 but remained the lowest among the major MSAs.

The Texas Repeat Sales Home Price Index increased 3.8 percent YOY, decelerating from 3Q2018’s annual growth rate of 4.1 percent. The index’s growth, however, continued to outpace wage improvement, exacerbating affordability struggles. Similar to home-price appreciation, Austin’s index posted the greatest YOY increase of 4.6 percent. Fort Worth’s and San Antonio’s metrics decelerated from year-ago levels, registering 4.2 and 4.1 percent growth, respectively. The Dallas index increased 2.9 percent YOY while Houston’s rose 2.4 percent.

Click here for the full report.

Source – James P. Gaines, Luis B. Torres, Wesley Miller, and Paige Silva (November 1, 2019)…

DFW Real Estate, Housing Market, Title Insurance, Title Company

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