ALTA BEST PRACTICES SERVICES
Under Consumer Financial Protection Bureau (CFPB) guidance, lenders are now responsible for providing adequate oversight of their 3rd party vendors. Closing attorneys, title agencies and settlement companies are 3rd party providers of services to the lenders, and as such, the lenders need to ensure that the companies they deal with are compliant.
The American Land Title Association (ALTA) created the Title Insurance and Settlement Company Best Practices (ALTA Framework) to help its members/title agents highlight policies and procedures that the industry exercises to protect lenders and consumers, while ensuring a positive and compliant real estate settlement experience.
The banking industry supports the ALTA Framework, and some banks have begun to require their closing attorneys, title and settlement agents to implement the ALTA Framework and have their implementation independently verified. Thurman Campbell Group can help see you through this process.
Levels of Services
The following table provides a comparison of each engagement type and the level of confidence with which lenders may consider each.
Which level of service is right for me? It depends on a number of factors. The most important, however, may be the lenders for whom you are acting as a settlement agent. One of our team members can talk with you about your specific situation and help you determine which level of service is right for you. Contact us to request and complete a Best Practices Readiness Questionnaire.
Frequently Asked Questions – Best Practices Certification
♦ Where can I get guidance on the written policies and procedures I need to have in place to be in compliance with ALTA’s Best Practices?
ALTA’s website (www.alta.org/bestpractices) has many resources. “Best Practices” actually refers to ALTA Best Practices Framework: Title Insurance and Settlement Companies Best Practices, version 2.5, published on October 7, 2016, which is available to the public through the website mentioned. Upon becoming a member of ALTA you will have access to many of ALTA’s resources developed specifically for title agents. The first step in preparing your written policies and procedures would be to download the Framework.
Under the “Get Started” tab on the ALTA website there are numerous categories to assist you in creating your written policies and procedures, including checklists and workbooks. The workbooks are very in-depth and address each of the seven pillars set out in the Best Practices.
Your written policies and procedures should be tailored to reflect the specific circumstances and work flow present in your office. Ongoing associate training surrounding the Best Practices will ensure that your written policies and procedures match what is actually occurring.
♦ Do I need to complete the Readiness Questionnaire?
Yes. This will help us identify any areas which may cause your company to fail the certification and cost your agency additional time and money.
♦ Why do title agencies have to become certified with ALTA’s Best Practices?
The Consumer Financial Protection Bureau (CFPB) has mandated lenders to provide adequate oversight of their 3rd party vendors. Title agencies and settlement companies are 3rd party providers of services to the lenders, and as such, the lenders need to ensure that the companies they deal with are compliant. The American Land Title Association (ALTA) developed its Best Practices for the Title Industry, and title companies that become certified as following Best Practices will provide most lenders with assurances that they are doing business with a complaint company.
♦ What is the pricing for these services?
Pricing is dependent upon the level of service requested and a number of factors including: number of offices, number of employees, number of escrow accounts, number of underwriters and number of closings or settlements.
♦ How long does a certification/examination take to complete?
The length of time it takes to complete the certification/examination depends on how ready your office is to undergo an Assessment and how responsive your office is to answering questions and providing documentation. The certification/examination requires the collection and submission of an extensive list of documents, some of which may take time for you to gather. A typical certification/examination takes between 2 weeks and 5 weeks to complete.