Over the past few months, many of you have contacted us about concerns with lender demands that title and settlement companies obtain certification from third-party vetting companies in order to continue doing business with some warehouse lenders. ALTA responded to the concerns and held conversations with the lending community to learn more about their needs and the appeal of third-party vetting companies. We have learned some good news.
In a recent conversation, an executive at a warehouse lender, who signed up with a third-party vetting company, stated that the January 1, 2013, deadline to sign up with a particular third-party vetting company is more of an aspiration and not a firm date. The warehouse lender does not intend to lose any business or have any deals fall through because a settlement agent hasn’t signed up with a vetting company.
We hope this news will give companies some breathing room to consider whether signing up with a third-party vetting company will meet their lender clients’ needs. The fact remains that lenders want to know more about the companies they do business with and the professionalism they employ. Based on ALTA’s conversations with lenders, this is being driven by regulator, investor, consumer and public demand that lenders take strong precautions to ensure consumer protection and to manage the risk surrounding settlement funds. To help title and settlement agents continue to meet that need, ALTA has developed and is publishing a set of Title Insurance and Settlement Company Best Practices to guide its membership in enhancing existing business practices to protect consumers, ensure quality service, provide for ongoing employee training, and meet legal and market requirements. Many of these practices are already an integral part of ALTA members’ day-to-day business. The goal is to provide the industry with tools to meet this lender demand for more information without the lender feeling they need to turn to a separate vetting company that may not meet all of their needs. You can read more about the announcement of these best practices in this Title News Online article.
The good news is that lenders are willing to be flexible and work with the title industry on meeting their needs. It is our priority at ALTA to ensure that the title industry has the tools necessary to meet the market needs and allow title and settlement agents to continue serving as the vital independent third party to the real estate transaction.
Michelle L. Korsmo