Overcoming Concerns and Leveraging Best Practices
|May 23, 2013|
While ALTA’s “Title Insurance and Settlement Company Best Practices” are voluntary, title professionals must remember it’s important to talk to their lender clients and learn about their requirements and then discuss all the steps and processes agents already have place to protect transactions. ALTA President Frank Pellegrini said agents should look past any burdens they feel in conforming established routines to these practices.
“The marketplace is demanding change and we must deliver if we are to remain at the vital center of the real estate transaction,” he added. “Ultimately, those who are willing to seek greater heights will succeed. Being certified in best practices, professionals will set themselves apart and this will allow them to leverage continued growth.”
With the CFPB holding lenders liable for the actions of the service providers they do business with, it’s essential title professionals understand the urgency implementing the best practices. Recent enforcement actions against lenders service as notice the CFPB will penalize financial institutions when their third-party vendors’ actions harm consumers.
Leveraging the Best Practices
While voluntary, Craig Haskins, a member of ALTA’s Best Practices Task Force, views the policies and procedures as a requirement. He said national and regional lenders seem to want some type certification of an agent before sending title and closing orders.
“We've already watched a handful of national lenders run to underwriters because of some unscrupulous acts of bad agents,” added Haskins, who is executive vice president of Knight Barry Title Group. “So while implementation of the Best Practices is voluntary, our company is adopting them all, then seeking certification before we voluntarily watch the business leave us because of the acts of a few bad guys.”
Until a certification process is in place, Haskins said his company will proactively self promote its implementation of the Best Practices. Other agents should think about this as well. Companies could consider redesigning their website and utilizing social media to highlight best-practice compliance.
“We are a large agent and we've worked very hard over the years to convince lenders that not all agents are alike,” Haskins said. “We don't want to be lumped into the category as some of the agents who have stolen funds or blown up closings with poor practices. It's actually tough for lenders to separate the good agents from the bad ones, but this certification will certainly help as long as the auditing process is strict and thorough.”