Over the past few years, many challenges in the marketplace have influenced and changed the way the business of title insurance and real estate settlement are conducted. Many of these changes have prompted lenders to consolidate their business and even consider taking their settlement work in-house. ALTA’s Board of Governors is committed to promoting the vast agent and settlement network that exists today. In order to help title and settlement companies to understand what lenders, regulators and consumers are seeking in the marketplace, ALTA is pleased to announce the publication of the “Title Insurance and Settlement Company Best Practices.”
The Best Practices are a benchmark for the mortgage lending and real estate settlement industry to protect consumers, to promote quality service, to provide for ongoing employee training and to meet legal and market requirements. Today’s announcement is the culmination of much work and discussion with agents, underwriters, lenders, regulators, and other stakeholders.
Meeting the Best Practices is a voluntary decision by title insurance and settlement companies. ALTA expects that those companies that choose to adopt the policies and procedures will use their compliance as a way to market their business.
These Best Practices include seven main pillars designed to help members highlight the practices the title industry uses to ensure a positive and compliant real estate settlement experience for lenders and consumers. These major Best Practices are listed below, and a full copy of the “Title Insurance and Settlement Company Best Practices” is available here.
Title Insurance and Settlement Company Best Practices:
- Establish and maintain current license(s) as required to conduct the business of title insurance and settlement services.
- Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts, allowing for electronic verification of reconciliation.
- Adopt and maintain a written privacy and information security program to protect Non-public Personal Information as required by local, state and federal law.
- Adopt standard real estate settlement procedures and policies that ensure compliance with Federal and State Consumer Financial Laws, as applicable.
- Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance.
- Maintain appropriate professional liability insurance and fidelity coverage.
- Adopt and maintain procedures for resolving consumer complaints.
During this year’s annual convention, we reviewed the results of a survey conducted on membership’s current business practices. The survey showed that the industry already follows many of these Best Practices. Because of this, ALTA believes that we in the industry must do a better job of promoting and communicating to lenders our commitment to professionalism and the measures we take to protect consumers and the real estate transaction.
This is just the beginning of our efforts to help our members fulfill the Best Practices. Over the coming months, ALTA will be providing a number of member benefit tools and educational opportunities, including sample policies and procedures. In addition, we will focus on each Best Practice pillar in our publications and in webinars to offer clear examples and helpful solutions for meeting these standards.
To aid this effort, ALTA is looking for members to submit sample policies already in place. Submissions will be anonymous and distributed to a related ALTA committee (Internal Auditing, Technology, Forms, Public Relations, etc.) in order to produce standard policies or guidelines for the industry. You can submit your policies here.
ALTA will continually improve these Best Practices, seeking comments from stakeholders as the Association edits and adapts these standards in the future. A formal committee of ALTA members will regularly review and make improvements to these Best Practices, seeking comment on each revision.
ALTA is delighted to release our full “Title Insurance and Settlement Company Best Practices” at a time of tremendous growth and change in the industry. 2013 will be another year full of opportunity and challenge as we adapt to a new regulatory environment and continued movement within the housing industry as a whole. For more information about the Best Practices, we’ve also compiled a list of Frequently Asked Questions.
As you read and digest our “Title Insurance and Settlement Company Best Practices,” your comments and questions are always welcome. We are here to assist you and look forward to continuing to serve you in 2013.
Michelle L. Korsmo