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Michael Krone
Michael Krone
Title: Vice President & Chief Operating Officer, Kriss Law/Atlantic Title & Closing
Age: 60
Experience: 35 years
Michael Krone has spent his career as an attorney keenly attuned to the business side of the mortgage industry and its needs. From running his own law firm to launching a tech startup to leading sales and marketing for a large title insurer, he’s seen a little bit of everything.
Q: Did you always want to be a real estate attorney?
A: No. Well, I shouldn’t say that – from when I was 7 years old I had wanted to be an attorney. And for many years I couldn’t admit why: It was because I really loved Perry Mason. And I thought that was just so frivolous – how could you want to be a lawyer because you so admired Perry Mason? But it was really true. I went to BU, because Georgetown didn’t want me, and then went to New England Law, again, because Georgetown didn’t want me. And at first I wanted to be a criminal lawyer, because that’s what Perry Mason was. It had never quite dawned on me that meant representing actual criminals – Perry Mason’s clients always got off. So I started studying real criminal law, and I was like “This sucks. I don’t want to do this.” And I think it was my third year, I started taking a few real estate classes. And I really liked real estate law … I found it fascinating, going through titles; you could see people’s history going back 50 years, who got married, who died, how much they sold for, who they sold it to. I found that really interesting.
Q: You have an extensive background with title insurance.
A: Well, I had had my own [law] firm, and then I eventually went into partnership with a couple of attorneys who were based in Wellesley. They had had a much larger firm that had contracted when they lost some big clients. And I [when I came in], I really started propelling the firm into high-volume conveyancing. I had done conveyancing for quite a while, but we really started doing 300, 400 closings a month. I always went to the mortgage conferences – it’s our biggest client, you should be there, right? Though I was often the only attorney there, which I don’t understand – but I came back from one of the Mortgage Bankers Association’s conferences, this was 1999, and I was like “Guys. Everyone is communicating with lenders electronically but us. The title industry doesn’t. We need to build an integration with the lenders.”
We had a really good technology guy who was working with us, for our needs within the firm, and when I said “we need to build this,” we were able to sit down and put it together, this connection. … We built a system where a lender could go to our site, upload their [Fannie Mae-approved electronic loan file], and we could parse it, in our system, which meant they could order electronically with us. … So now we had this really cool piece of technology and it was like, all right, what can with do with it? [We tried several different approaches – selling to individual practitioners, bulk sales to large title companies, using it to conduction nationwide closings.] It worked out well; we got paid. But in the end the industry just wasn’t ready for it [so we decided to sell the business]. By then, I had had it with real estate conveyancing. I was just burnt … My wife would ask me on Monday when I was going to be home for dinner; I’d say “Friday.” So I went to work for First American, and I was there for five years. I was then doing some consulting, and Scotty [Kriss, founder of Kriss Law], who had been one of my biggest agents at First American, had founded this firm, and he wanted to expand. So I came in. And that’s led to us being licensed in 14 states, and last month we did 1,400 closings. So it’s killing me again! [Laughs.]
Q: You mentioned that you were the one who sort of pushed your old firm into high-volume conveyancing. What was the opportunity that you saw there?
A: Marketing. Marketing it as a business. Being something different from the stodgy attorney, so impressed with themselves for clearing up a title issue that they’ve got you on the phone for half an hour and the lender doesn’t care. … [Conveyancing] is the same thing over and over again. You have to know what you’re doing, but it’s a business, and it can be run like a business. So I marketed the hell out of it, and we did very well.
Q: Every sector of this industry has gone through a host of changes the past few years. The latest hurdle are the new Truth In Lending Act requirements kicking in this August – do you think the industry is ready to give three day’s notice for closings?
A: Well, it’s funny, because if you really look at the rule, it shouldn’t be a problem. You really only have to give a new notice if there’s a change in the APR, if you institute a pre-payment penalty, or if you change the loan program. That almost never happens. Once you deliver the [good faith estimate], unless the buyer goes out to Bob’s Furniture and racks up $10,000 on their credit card and changes their [debt to income ratio], you won’t have to re-disclose. But the three-day rule is what everyone is worried about. … As long as you’re not changing the APR, the pre-payment or the loan program, why not give the closing documents two weeks in advance? Any other changes can be handed to the borrower prior to or at closing.
Q: Do you think most people are misinterpreting the rule? A lot of people seem to be very concerned.
A: They don’t read it. This is exactly what happened in 2010 when we went to tolerances [on the good faith estimate] … all of a sudden, come December, people were like, “Did you hear about this new rule?” Well, yeah. They’ve been talking about it for three years.” The problem is you’re going to have lenders who say, “If there’s any change, I’m going to re-disclose and give [another] three day’s notice.” We saw this in 2010 [with the good faith estimate]; if it was one dollar off people would redisclose. I think we’re going to see lenders so afraid of the CFPB and the magnitude of the penalties that any change is going to be redisclosed.
