Welcome to Spring (almost). As Major

League Baseball gears up for another season with reason for optimism in Chicago, unlike many past years, there is also reason to be optimistic about the Spring home buying season. With interest rates extraordinari-ly low and the pace of existing home sales growing (up 11 percent from January 2015 to January of this year), we seem to be poised for a good spring and summer.

NAR is bullish on the upcoming market, as realtor.com chief economist Jonathon Smoke noted in February: “Recent housing and eco-nomic reports predict we’ll see solid spring home sales.” Smoke went on to cite improv-ing home sales, job growth and low mortgage rates as three of the factors giving him opti-mism. The fourth is pricing:

“Prices are moving up and most of that has been attributed to the limited number of homes for-sale. At the current pace, there is a four-month supply of homes on the market — much lower than the norms of six to seven months. This is driving prices higher and encouraging consumers who hope to buy

this year to get started as soon as possible,” Smoke added.

Combine that with a commercial real estate market that continues to build momentum and it seems like we could be on our way to several good quarters in the real estate industry.

Tempering that optimism for some is the con-tinuing struggle to get mortgage loans closed in as timely a fashion as we did in the past. But keep in mind that the past is just that – past. For decades we operated in basically the same closing environment with limited changes here and there, but the HUD-1 era is over and is never coming back.

There is no doubt that closings, on the whole, are proceeding more slowly than they did in the past. According to Ellie Mae’s latest Origination Insight Report, the average time to close a loan increased to 50 total days in January, which is up four days from when TRID went into effect in October.

For now, there isn’t a universally acceptable timetable to get to closing. Different lenders are approaching the process in different ways and concentrating on getting numbers to

consumers according to the new rule. That’s understandable especially with the CFPB holding a cudgel and threatening to use it. But one of the factors that is slowing down the process is some delays in getting figures to the settlement companies. I would urge you all on the lending side of the world (as well as attorneys) to get us the numbers we need as quickly as possible so we, in turn, can speed up our process.

None of this is surprising as we get used to a new system. After all, HUD/RESPA was around 40 years, and Rome wasn’t built in a day as we Italians like to say. I believe that the process is getting better and that our time frames will shrink steadily as 2016 moves along.

IN THIS ISSUE1. My Perspective

Spring Optimism in the Air

2. Legal Landscape Mechanics’ Lien Law Change

3. Commercial Corner 2015 Great Year for Mortgages

4. CFPB TRID Updates Correction on Tolerances

MY PERSPECTIVE

By Frank Pellegrini, Prairie Title CEO

Despite TRID Delays, Spring Optimism is in the Air

New Art Exhibit at Prairie TitlePrairie Title is now hosting the works of

local artist Jim Tansley (shown with Frank

Pellegrini in front of two of Jim’s pieces).

Stop by any time and take a look.

ATG Limit IncreasingAs of May 1, attorney-agents for Attorneys'

Title Attorney Guaranty Fund will see their

limit before before reinsurance increase 50

percent to $1.5 million.

www.prairietitle.com News from Prairie Title

March/April 2016

ASSURANCE

Contact UsYou can contact any member of our management team or department heads via e-mail. Or dial our main number at 708-386-7900 and ask for the following extensions:

Frank Pellegrini - CEO .............................. ext. 1301 frank@prairietitle.com

Mary Pellegrini - Customer Service ........... ext. 1306 mpellegrini@prairietitle.com

Mandy Valentin - Closing Dept .................. ext. 1345 avalentin@prairietitle.com

Donna Krzanik - Title Dept ....................... ext. 1305 dkrzanik@prairietitle.com

Scheduling ............................................ ext. 1303 scheduling@prairietitle.com

Steve Gillum - Account Executive ....... 630-450-0093 sgillum@prairietitle.com

Michael Guerin - Account Executive .... 847-651-5635 mguerin@prairietitle.com

Van Hante - Account Executive ...........708-692-2824 vhante@prairietitle.com

Brian Zeng - Account Executive ..........630-746-9855 bzeng@prairietitle.com

Prairie Title 6821 W. North Ave. Oak Park, IL 60302 www.prairietitle.com

New Illinois Law Allows “Bonding Over” Mechanic' Lien Law A new law passed last July that went into effect

at the beginning of the year authorizes so-called

“bonding over” of mechanics liens for the first

time ever. The addition to the Illinois Mechan-

ics’ Lien Act (section 38.1) allows “any owner,

lien claimant or other person having an inter-

est in property against which a mechanics’ lien

is asserted to petition to substitute an eligible

surety bond in place of a mechanic’s lien,” ac-

cording to National Law Review article authored

by Gregory S. Gistenson and Clifford J. Shapiro.

Practically speaking, the adjustment to Illi-

nois law will allow real estate to flow into com-

merce despite the presence of a mechanics’ lien

because it’s secured by the bond. In the past, a

mechanics’ lien would keep a property locked

in limbo until the lien was satisfied, often after

protracted litigation.

According to Gistenson and Shapiro, Section

38.1 “May cause unintended consequences for

general contractors. If a general contract re-

quires the contractor to bond over liens filed by

sub-subcontractors or material suppliers with

whom they do not have a direct contract, that

contractor risks becoming personally liable to

a lower-tier lien claimant for the amount of the

lien, plus attorneys’ fees and interest. Contrac-

tors should consider carefully any such contract

requirement in light of the above provisions and

should understand the additional risks such a re-

quirement could impose.”

This new provision of the Illinois Mechanics’

Lien Law can be beneficial to real estate devel-

opers, general contractors and others, but, as

always, caution and careful planning in con-

sultation with your real estate attorney are

highly recommended.

State Offers New Veterans’ Property Tax BreakEffective at the beginning of this year for proper-

ty tax year 2015, more Illinois veterans with dis-

abilities will be eligible for tax relief as a result of

legislation recently enacted. Public Act 98-1145

and Public Act 99-0375 expand the existing prop-

erty tax homestead exemptions and mobile home

exemptions, helping more Illinois veterans with

disabilities and their families.

Veterans and their spouses who qualified for the

Specially Adapted Housing Exemption for Vet-

erans with Disabilities (35 ILCS 200/15-165) for

the 2014 tax year will receive additional proper-

ty tax relief on their 2015 property tax bills. The

Specially Adapted Housing Exemption benefit

was increased, providing a reduction in the as-

sessed value for specially adapted housing of up

to $100,000 (previously $70,000). Those veter-

ans and their families who qualify for the spe-

cially adapted housing benefit on their mobile

home will continue to be fully exempt from the

full amount of the Mobile Homes Local Services

Tax Act.

For the 2015 tax year for taxes payable in 2016,

the specially adapted housing benefit is expand-

ed to include housing specifically constructed

or adapted to suit a qualifying veteran’s dis-

ability, and is donated through a charitable

organization in compliance with the standards

set by the U. S. Department of Veterans’ Affairs.

The exemption must be reestablished annually

by certification from the Illinois Department of

Veterans to the Illinois Department of Revenue

who forwards the certification list of eligible

veterans to the local assessing official. The vet-

erans should contact their county assessor for

more information and to apply for the relief.

HUD Reform Bill Passes HouseOn Feb. 24, the U.S. House of Representatives

unanimously passed H.R. 3700, the Housing

Opportunity through Modernization Act. The

legislation is meant to improve and modernize

HUD's programs as the department prepares for

its 50th anniversary.

This legislation is sponsored by Reps. Luetke-

meyer (R-MO) and Cleaver (D-MO). Among its

provisions, the bill makes a number changes to

HUD's condo approval rules including (1) reduc-

ing the owner occupancy ratio to 35 percent, (2)

requiring a streamlined certification process, (3)

providing more flexibility for mixed use develop-

ments to receive HUD approval, and (4) requiring

the FHA to mirror Fannie and Freddie's rule on

private transfer fee covenants.

Legal Landscape

Introducing Title Man – Hero of the industryWatch for Title Man here, there and everywhere. Go to Prairie Title’s Facebook page and friend us to see where he’ll pop up next!

2 ASSURANCE News From Prairie Title March/April 2016

2015 Best Year for Mortgages Since 2007U.S. office net absorption topped 100 million

square feet for the first time since the Great Reces-

sion and the national office vacancy rate declined

another half-percentage point in 2015 as broad-

ening demand and constrained levels of construc-

tion contributed to tightening space availability in

virtually every metro area. Those findings were

included in a report released recently by Washing-

ton, D.C.’s CoStar Group.

The U.S. office vacancy rate declined from 11.3%

in 2014 to 10.8% at the end of 2015, continuing its

downward trend from the 13.2% vacancy rate at

the worst of the economic downturn, according to

data presented at CoStar's recent State of the U.S.

Office Market 2015 Review and Forecast.

“The market is overwhelmingly strong at this

point in the cycle. With the momentum in the

market, I’m sure the next quarter will also be

strong,” said Hans Nordby, managing director

of CoStar Portfolio Strategy, who presented the

findings along with CoStar Director of Office

Research Walter Page and Vice President and Re-

search Director Dean Violagis.

MBA Projects Commercial Mortgage Growth

Meanwhile, the Mortgage Bankers Association

projects originations of commercial and multi-

family mortgages to grow to $511 billion in 2016,

an increase of 3 percent from 2015 volumes and

slightly more than the previous record of $508

billion originated in 2007.

MBA also forecasts mortgage banker originations

of multifamily mortgages to reach $202 billion in

2016, with total multifamily lending at $262 billion.

“This past year was extremely strong for commer-

cial real estate finance,” said MBA Vice President

of Commercial Real Estate Research Jamie Wood-

well. “Property incomes are rising, interest rates

are low and property values are up. We expect the

momentum to continue into 2016 and to support

both the demand for and supply of commercial and

multifamily mortgage capital.”

Woodwell said a growing economy, coupled with

only gradual increases in interest rates, should

continue to support a strong commercial property

market. “But there is a chance that cap rates could

increase more rapidly in response to rising interest

rates, impacting property sales and mortgage orig-

inations,” he said.

Celebrating Anniversaries at Prairie Title

At Prairie Title, experienced employees

are our best resource. We’re now celebrat-

ing employee anniversaries on a monthly

basis, recognizing the people without

whom we could not operate.

In January, Roz Belmonte celebrated 7

years at Prairie Title.

February anniversaries included:

• Marsha White, 4 years

• Betsy Rousakis, 7 years

• Jeremie Mascheri, 9 years

Congratulations to all!

THINK OF IT AS A PROPERTY RIGHTS

FORCE FIELD

homeclosing101.org.For more information visit

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Corner

Roz Belmonte celebrates her anniversary.

ASSURANCE News From Prairie Title March/April 2016 3

TRID UpdateCFPB Corrects Error in TRID Rule on TolerancesThe Consumer Financial Protection Bureau (CFPB) on Feb. 10 published a

Correction Of Supplementary Information in the Federal Register to fix a

typographical error regarding the application of tolerances to property

insurance premiums, property taxes, homeowner’s association dues,

condominium fees and cooperative fees.

The Supplementary Information originally published by the CFPB stated

that “property insurance premiums, property taxes, homeowner's asso-

ciation dues, condominium fees, and cooperative fees are subject to tol-

erances whether or not they are placed into an escrow, impound, reserve,

or similar account.” The correction published in the Federal Register now

states that “property insurance premiums, property taxes, homeowner's

association dues, condominium fees, and cooperative fees are not subject

to tolerances whether or not they are placed into an escrow, impound,

reserve, or similar account.’ 78 FR 79730 (Dec. 31, 2013).

This change is consistent with other language in the Supplementary

Information, particularly the sentence preceding the corrected portion of

the supplement that reads, “property insurance premiums are included in

the category of settlement charges not subject to a tolerance, whether or

not the insurance provider is a lender affiliate.” 78 FR 79730, 79829 (Dec.

31, 2013).

With this error corrected, the costs affiliated with property insurance

premiums, property taxes, homeowner's association dues, condominium

fees, and cooperative fees may now change without impacting the allow-

able tolerances for the transaction.

Despite this change, lenders and settlement agents must make good-faith

efforts to provide accurate estimates. As a reminder, once the initial

Closing Disclosure

is issued, all changes

should be made with an

updated Closing Disclosure

that the creditor must provide

to the consumer at or before consum-

mation. The creditor may not provide a revised Loan

Estimate on or after the date the creditor provides the consumer with the

Closing Disclosure.

Leeway Promised in Early TRID ExamsThe Consumer Financial Protection Bureau openly acknowledged that the

transition to new mortgage-disclosure requirements presents a major

challenge for lenders, saying it will give them some leeway in upcoming

exams, reported National Mortgage News in February.

“We're very aware of the significant challenges the industry has faced in

order to get into compliance with this rule,” said Allison Brown, a program

manager in mortgage servicing in the CFPB's office of supervision policy.

The bureau will be “very sensitive” to the implementation's impact on

lenders, title companies, closing agents and real estate professionals,

Brown said in February at a Mortgage Bankers Association conference in

Orlando, Fla.

“We understand that most industry members were ready on Oct. 3, but

there are going to be implementation challenges that you wouldn't know

about until the rules took effect and you started using those disclosures,”

she said.

Prairie Title is TRID Ready

Prairie Title Gets top Scores!Prairie Title’s performance was recently reviewed by

Wells Fargo, and we received their highest scores in

three key Wells Fargo categories.

• Mortgage on time delivery: 100 percent

• Title Policy on time delivery: 88.1 percent

• Recording Fee Accuracy: 85.7 percent

We’re always working to get better, but it’s gratifying

to be recognized for strong performance by such an

important real estate lender.

4 ASSURANCE News From Prairie Title March/April 2016