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									Dear RESPRO® Member:

As we enter 2008, there’s no doubt that affiliated businesses are becoming increasingly important to
companies in this challenging housing market. Not only do they have the potential to provide critical
revenues, but they also give us the resources needed to assure that every home buyer is able to close
his or her transaction.

There’s also no better time to grow our affiliated businesses’ success rates and market share for the
future. The current problems in the mortgage industry have refocused home buyers and our sales
personnel on the importance of using in-house mortgage, title, and other core services, which have a
high degree of supervision, quality service, and reasonable fees. This movement towards quality
affiliated services reinforces what RESPRO® has been advocating for years.

As Chair and Vice Chair of RESPRO®, we’re glad to present to you RESPRO®’s 2007 Summary of Activities.
As you know, RESPRO® is the only organization that is solely dedicated to helping real estate brokers,
home builders, mortgage lenders, title companies, and other settlement service providers build
successful, legally-compliant affiliated businesses. Its importance is only heightened by the necessities
of today’s marketplace.

The 2007 Annual Summary summarizes how RESPRO® worked on your behalf to counter an increasingly
hostile federal and state regulatory environment towards affiliated businesses. It also summarizes the
resources you have through RESPRO® in 2008 to help you capitalize the opportunities that your
affiliated businesses can provide you in this marketplace.

There’s no organization with a better track record in fighting unnecessary and anti-competitive
regulatory restrictions on affiliated businesses, and no organization with more resources to help you
grow them.

We look forward to working with you this year, and we hope to see you at RESPRO®’s April 1-3, 2008
Annual Conference in Washington, D.C.!


Arthur Sterbcow                                         Ronald J. Peltier
President                                               President & CEO
Latter & Blum, Inc. Realtors                            HomeServices of America, Inc.
RESPRO® Chair                                           RESPRO® Vice Chair
                      Real Estate Service Providers Council, Inc.
                         2007 Annual Summary of Activities

I. RESPRO® Regulatory Advocacy on Behalf of Affiliated Businesses
  In 2007, affiliated businesses (AfBAs) faced more regulatory scrutiny at the federal and state level
  than they have in more than a decade. Much of this scrutiny was triggered by complaints by
  independent competitors of mortgage, title, and other settlement services, who continued to urge
  Congress, HUD, and state legislators/regulators to impose restrictions on the operations of affiliated
  businesses. Some of the scrutiny was due to negative press about “sham” affiliated businesses,
  which tainted the regulatory waters for legally-compliant operations as well. The following is a
  summary of RESPRO®’s work on behalf of affiliated businesses challenges against affiliated
  businesses in 2007, with a preview of what lies ahead in 2008 that can impact the operations of
  RESPRO® members.

  A. 2007 RESPRO® Advocacy

      1. Government Accountability Office (GAO) Report to Congress: GAO’s April 2007 Report to
         Congress on competitiveness in the title industry provided a neutral analysis of the impact
         of affiliated businesses in the home buying market, despite the efforts of independent
         competitors to paint them as abusive to consumers during their briefings with GAO officials.
         The GAO pointed to information provided to it by RESPRO® that affiliated businesses can be
         beneficial because they provide consumers with better service and potential cost savings,
         and it referred to RESPRO®'s 2006 Economic Study by The CapAnalysis Group that proved
         affiliated title costs to be competitive with those of independent title businesses. RESPRO®
         also submitted an analysis of the affiliated business sections of the GAO Report to Congress
         to members of Congress, Department of Housing and Urban Development (HUD) officials,
         and the National Association of Insurance Commissioners (NAIC). Our analysis reinforced
         the GAO’s conclusions about the consumer benefits of affiliated businesses and rebutted
         allegations made by their critics.

      2. Education of Members of Congress on the Benefits of Affiliated Businesses: Some
         independent competitors of affiliated businesses have urged members of Congress to place
         restrictions on affiliated businesses, with one Congressional witness in 2006 actually
         proposing to ban their operations through federal legislation. During 2007, RESPRO® met
         with representatives of the majority of members of the House Financial Services and Senate
         Banking Committees, as well as representatives of the nation’s major consumer
         organizations, to educate them on how legally-compliant affiliated businesses across
         industry lines can provide consumers the benefits of competitive costs, convenience, and
         better service.

      3. Elimination of AfBA Discrimination in Predatory Lending Legislation: In November 2007,
         the U.S. House of Representatives passed predatory lending legislation with RESPRO®-
         supported language that would assure that the legislation does not discriminate against
       loans offered by mortgage companies using affiliated settlement service companies by
       making such loans subject to the Homeowners Equity Protection Act’s (HOEPA) restrictive
       terms. If not corrected, any mortgage companies could be prevented from using affiliated
       title and settlement service companies for lower-priced mortgage loans.

   4. Proposed Indiana Ban on Affiliated Businesses: In 2007, the Indiana Department of
      Insurance circulated a draft bulletin that interpreted Indiana state law as banning real estate
      brokers, home builders, and mortgage companies from owning any part of a state-licensed
      title agency. RESPRO® organized its members with Indiana-based operations to convince
      the Department to drop this interpretation.

   5. Proposed Ohio Restriction on Title Agency Ownership: In 2007, the Ohio Department of
      Insurance finalized a regulation to incorporate HUD’s joint venture guidelines into Ohio title
      insurance regulations. The final regulation excluded a proposal by the Department that
      would have prevented real estate brokers, home builders, and mortgage companies from
      owning more than 10% of the voting stock in a state-licensed title agency, after RESPRO®
      and the Ohio Association of Realtors worked together to convince the Department to
      eliminate this restriction.

   6. Proposed Texas Restriction on Title Agency Ownership: In 2007, an independent title
      company petitioned the Texas Department of Insurance to prohibit state-licensed title
      agencies from receiving more than 50% of their business from an affiliate, and to require
      them to get 90% of their business from the county in which they are licensed. According to
      the RESPRO® Chapter of Texas, the adoption of this petition would have meant the end of
      affiliated title businesses in Texas. The RESPRO® Chapter of Texas organized members with
      Texas-based title operations to oppose this restriction, after which the Department
      proposed to deny it. The RESPRO® Chapter of Texas will continue to oppose the proposal in

B. 2008 Outlook

   1. RESPA Reform Regulation: In 2008, HUD is expected to propose a new RESPA
      regulation in February 2008 that will modify the Good Faith Estimate (GFE).
      RESPRO® has been an active participant in RESPA rulemakings throughout its history,
      always with the goal of assuring that any regulation treats all providers equally,
      regardless of their industry or affiliation. We will continue to be an active
      participant in 2008.

   2. Legislation to Authorize Additional RESPA Penalties: HUD also has announced that it
      will ask Congress to pass legislation in 2008 to impose additional penalties for RESPA
      violators, including the ability to impose civil money penalties and to ask for
      disgorgement of profits earned from alleged violations. While RESPRO® has long
      supported strong RESPA enforcement, we have already started our efforts to assure
      that any legislation authorizing additional RESPA penalties is coupled with provisions
      that assure that HUD provides fairer, more consistent, and more clear regulatory
      guidance under RESPA.
   3. Predatory Lending Legislation/Discrimination of Affiliated Businesses: RESPRO® will
      continue its efforts to assure that any predatory lending legislation passed by
      Congress in 2008 does not discriminate against loans offered by mortgage
      companies using affiliated title companies by making such loans subject to the
      Homeowners Equity Protection Act’s (HOEPA) restrictive terms (see above).

   4. Predatory Lending Legislation/Definition of “Loan Originator”: RESPRO® also will
      continue efforts to correct the definition of the term “loan originator” in the House-
      passed bill, which could result in persons who are not otherwise involved in the
      mortgage process (e.g., a real estate agent/broker who assists a buyer with a
      mortgage loan, a marketing or data entry employee of a mortgage company) having
      to get licensed or registered as loan originators under the legislation’s requirements.

   5. New York Legislation to Require Multiple Sources of Business: In 2007, a title licensing bill
       was introduced in both the New York Assembly and Senate that would require affiliated title
       businesses licensed in the state to have multiple sources of business. RESPRO® has
       organized its members with New York operations to oppose this proposal in 2008.

   6. California, Arizona, and Texas Scrutiny of Affiliated Businesses: In 2007, the California
       Department of Insurance issued a statement saying that it will rehaul the regulatory
       environment for California title companies. One of the items on its agenda was the
       regulatory environment for affiliated businesses. Separately, state regulators in Arizona and
       Nevada have been scrutinizing affiliated businesses in the state. In April 2007, RESPRO®
       members in Arizona, California and Nevada joined together to establish a West Coast
       Chapter in order to have an organized presence of affiliated businesses in these states. The
       Chapter has met with key regulators in these states to educate them on the benefits of
       affiliated businesses, and will continue to actively monitor state regulatory and legislative
       activities that may impact affiliated businesses.

C. Advocacy Resources for RESPRO® Members

   1. On-Line Affiliated Business Advocacy Center: In 2007, RESPRO® developed an on-line
      Affiliated Business Advocacy Center for our members at www.respro.org under Government
      Affairs/The Truth About AfBAs, at which they can access information to use in educating
      their state regulators and local media about the benefits of affiliated businesses; such as
      talking points, economic studies, consumer surveys, and positive statements about affiliated
      businesses by federal and state regulators.

   2. State Issues Task Force: RESPRO®’s State Issues Task Force, open to all members, meets
      monthly to exchange information about state regulatory and legislative activities that can
      impact affiliated businesses. To join the Task Force, contact Terrie Worley at

   3. Policy Committee: RESPRO®’s Policy Committee, open to all Board members and
      representatives of their companies, continued to meet monthly to discuss activities by
      Congress, HUD, and other federal regulators that specifically can impact affiliated
      businesses. To join the Policy Committee, contact Terrie Worley at tworley@respro.org.
II. Regulatory Compliance Help for Affiliated Businesses
   The federal and state regulatory environment for affiliated businesses under the Real Estate
   Settlement Procedures Act (RESPA) and other federal and state laws has always been complicated,
   confusing and uncertain. Today, however, it is even more important to understand its twists and
   turns since the Department of Housing and Urban Development (HUD), state regulatory agencies,
   and the plaintiff’s bar have stepped up their enforcement activities. The following are RESPRO®
   regulatory compliance resources designed specifically to help our members have legally-compliant
   affiliated businesses and marketing agreements.

   A. On-Line Regulatory Compliance Center: During 2007, RESPRO® continued to build its
      regulatory compliance resources specifically designed for affiliated businesses, located at
      www.respro.org under “Regulatory Compliance Center”. This is the most comprehensive library
      of regulatory compliance information for affiliated businesses in the country.

   B. Affiliated Business Regulatory Compliance Kit: In January 2007, RESPRO® unveiled its
      Affiliated Business Regulatory Compliance Kit, a comprehensive desktop reference kit with
      readily accessible, easy-to-understand information designed to give our members the answers
      to day-to-day regulatory compliance information at their fingertips. To order the Kit, visit
      www.respro.org under “Marketplace”.

   C. Survey of State Affiliated Business Laws: In 2007, RESPRO® published its new Survey of
      State Affiliated Business Laws, the nation’s most comprehensive survey of state laws and
      regulations that affect the ability of real estate brokers, home builders, mortgage companies,
      and title/settlement service firms to create and efficiently manage affiliated businesses.

   D. RESPRO® Publications, Audio Cassettes and CDs: RESPRO® continues to offer its RESPA
      Guide for Salespersons, RESPA Primer for Joint Ventures, and RESPA Guide to Affiliated Business
      Disclosures, with substantial discounts for RESPRO® members. It also substantially built its
      supply of audio cassettes and CDs from RESPRO® Annual Conference and Fall Seminar regulatory
      compliance sessions, also with substantial discounts for RESPRO® members. To view RESPRO®
      publications, audio cassettes and CDs, visit our web site at www.respro.org under

   E. Access to RESPRO® Headquarters: RESPRO® members continue to have access to RESPRO®
      staff who are familiar with RESPA and state laws and who can work with them on their particular
      regulatory compliance question.

III. Affiliated Business Growth Strategies
   Creating an affiliated mortgage, title, insurance, or other settlement service business does not
   ensure that home buyers and owners will use its services. For 15 years, RESPRO® has served as a
   resource of information on marketplace trends and operational strategies from the nation’s leading
   affiliated business executives and consultants. The following is a summary of resources that
   RESPRO® has available to our members to help them grow their affiliated business’ success rate and
   market share.
  A. On-Line Affiliated Business Strategies Center: During 2007, RESPRO® grew its on-line
     comprehensive library of information about how to create and grow affiliated businesses, with
     articles and presentations by successful affiliated businesses and industry consultants and
     interviews with affiliated business innovators.

  B. RESPRO® Quarterly Magazine: RESPRO®’s Quarterly Magazine featured articles by the
     nation’s most successful affiliated business executives and leading industry consultants on how
     to create and grow an affiliated business’ success rates and market share.

  C. RESPRO Audio Cassettes and CDs: RESPRO® substantially built its supply of audio cassettes
     and CDs from RESPRO® Annual Conference and Fall Seminar sessions on marketplace trends and
     cross-marketing strategies for affiliated businesses, with substantial discounts for RESPRO®

  D. NEW in 2008! RESPRO® Member Forum: In January 2008, RESPRO® will launch an
     electronic Member Forum to enable RESPRO® members to directly communicate with each
     other on marketplace trends, cross-marketing strategies, and regulatory compliance issues
     affecting their ability to build successful and legally-compliant affiliated businesses and other
     strategic alliances.

IV. RESPRO® Conferences and Seminars

  A. RESPRO® Annual Conference: RESPRO®’s 2007 Annual Conference, “The Keys to Successful
     Affiliated Business & Strategic Alliances”, was held April 8-10 at the Mandarin Oriental Hotel in
     Washington, D.C. The conference attracted over 200 affiliated business executives and received
     a ranking of 44% “Excellent” and 45% “Good” by attendees.

      RESPRO®’s 2008 Annual Conference will be held April 1-3, 2008, also at the Mandarin Oriental
      Hotel in Washington, D.C. This year, RESPRO® and The Realty Alliance, a networking
      organization of the nation’s largest real estate brokers, will hold their meetings back to back in
      order to save those who want to attend both the RESPRO® conference and The Realty Alliance
      meetings an additional plane ticket, hotel stay and at leas at one full work day away from the
      office. RESPRO® members and their employees get substantial discounts to RESPRO®®'s Annual
      Conference, Fall Seminar and Audio Seminars which offer a broad array of sessions on
      marketplace trends and business strategies.

  B. RESPRO® Fall Seminar: RESPRO®’s 2007 Fall Seminar, “Affiliated Businesses & the Pursuit of
     Excellence”, was held November 5-7, 2007 at the Wynn Resort in Las Vegas, Nevada. The
     Seminar also attracted over 200 affiliated business executives and received a ranking of 46%%
     “Excellent”, 46% “Good” by attendees. For the first time, RESPRO offered attendees the option
     of choosing a basic track that covers the fundamentals of running an affiliated business, and an
     advanced track for more complex challenges.

      RESPRO®’s 2008 Fall Seminar will be held November 5-7, 2008 at the Ritz Carlton Hotel in New

  C. NEW in 2008! RESPRO® Audio Seminars: In 2008, RESPRO® will host quarterly series of
     audio seminars featuring the nation’s most successful affiliated business executives and
     RESPA/state law experts, with strategies on how to grow their success rates and advice on how
     to comply with RESPA and other federal/state laws.
                          Key RESPRO® Staff

Executive Director                   Government Affairs Director
Sue Johnson                          Ron Maas
202-862-2051, Ext. 210               202-862-2051, Ext. 213
sjohnson@respro.org                  rmaas@respro.org

Meetings & Marketing Director        Membership Director
Rae Brevard                          Rita Reynolds
(317) 472-2430                       202-862-2051, Ext. 212
rbrevard@respro.org                  rreynolds@respro.org

Administrative Manager
Terrie Worley
202-862-2051, Ext. 214

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