As Dr. Seuss says in his famous book, Oh, the Places You’ll Go!, “Today is your day. You’re off to Great Places! You’re off and away!” By following ALTA’s Best Practices, you too can be off and away!
Lenders routinely work with title insurance companies, settlement companies, title agents, closing attorneys, closing agents, and real estate settlement professionals (collectively referred to herein as “title agents”) in the process of closing or settling residential mortgages or “loans.” The Consumer Financial Protection Bureau (CFPB) mandates monitoring by residential mortgage lenders of certain of their third-party service providers’ (title insurance companies, settlement companies, title agents, and closing attorneys — collectively herein “title agents”) compliance with federal consumer financial laws. In response to this mandate, the American Land Title Association (ALTA) developed their Best Practices Framework: Title and Insurance Settlement Company Best Practices (“ALTA Best Practices” or the “Framework”) as a compliance benchmark to document and measure compliance with the CFPB’s requirements.
Many lenders have begun requiring self-assessments or third-party certifications from their title agents. Those lenders have indicated that a failure to evidence compliance will result in the title agent being removed from the lender’s “Approved List” to close or settle loans. To do business in the future and be competitive with their peers, title agents are adopting the ALTA Framework and performing some form of assessment (either a self-assessment or a third-party assessment) to document and demonstrate their compliance to their lending partners. The CFPB has the authority to take enforcement action (including fines) against lenders and title agents for non-compliance.
ALTA’s Framework includes best practices developed by the land title industry, which included title agents, title insurance underwriters, ALTA, and vendors within the industry. By developing the ALTA Framework, lenders were given a tool to help them monitor the title agent’s compliance. ALTA has also issued Best Practice Framework: Assessment Procedures that provide a vehicle for title agents to receive compliance certification assurance reports to evidence compliance with the CFPB requirements.
ALTA’s Framework includes best practices across these seven pillars:
- escrow accounting procedures,
- privacy and information security,
- settlement procedures,
- title policy production and delivery,
- professional liability insurance coverage, and
- consumer complaints
“You won’t lag behind because you’ll have the speed. You’ll pass the whole gang, and you’ll soon take the lead.”
Many underwriters and title agents believe that complying with the ALTA Framework will both meet regulatory guidelines and give title agents a competitive advantage in the marketplace with the peers. Through the reviews of internal controls involved in becoming compliant, title agents will be able to streamline their processes and perform settlement services in a more cost-effective manner.
CRI Can Help Get You Going On Your ALTA Way
The following is an overview of how CRI can assist you with ALTA compliance.
- Using CRI’s toolkit, you will complete a readiness assessment of your current ALTA Best Practices compliance level. CRI’s designated ALTA Best Practices team will perform and provide a gap analysis of deficiencies that need to be remediated.
- Your CRI ALTA Best Practices team will then provide specific remediation steps to become ALTA Best Practice compliant.
- CRI’s IT audit and assurance professionals can guide you through ALTA Best Practices’ pillar #3 compliance. Our IT audit and assurance team is also adept at identifying and communicating opportunities leading to process improvement and efficiencies.
- The CRI team will walk you through your compliance reporting options (review, agreed-upon procedures, or examination).
- Then, CRI will perform the necessary work required for your ALTA Best Practices compliance report.
“Oh the places you’ll go!” with CRI’s ALTA Best Practices compliance team. Contact us today to get started on meeting regulatory guidelines and gaining a step ahead of your competition.