By: Mark Welp, CPA, CFE- H&M Principal
The American Land Title Association (ALTA) is a vital resource for title insurance and settlement companies. This national trade association offers best practices which are designed to help define a strong set of procedures to follow to protect consumer information.
Title insurance and settlement companies work hand-in-hand with financial institutions, and is an industry faced with increased regulatory demands in regards to the way that they handle the level of risk involved in their dealing with service providers.
These high-level best practice exercises, as composed by ALTA, should be implemented by title insurance and settlement companies.
1.) Establish and maintain current license(s) as required to conduct the business of title insurance and settlement services.
2.) Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation.
3.) Adopt and maintain a written privacy and information security program to protect Non-public Personal Information as required by local, state and federal law.
4.) Adopt standard real estate settlement procedures and policies that help ensure compliance with Federal and State Consumer Financial Laws as applicable to the Settlement process.
5.) Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance.
6.) Maintain appropriate professional liability insurance and fidelity coverage. 7.) Adopt and maintain written procedures for resolving consumer complaints.
Once the ALTA Best Practices are implemented, an organization can elect to take part in the ALTA Best Practices Assessment Program, which provides certification to the company. The process to get certified is rigorous and involves strict PASS/FAIL guidelines.
Taking any and all of these measures will allow lenders to assess third-party risk on a higher level, which is vital. If you would like assistance in getting started with this process, H&M would be happy to assist you. Contact us today.