Title Industry Best Practices According to ALTA

Here’s what those in the title industry need to know about ALTA’s best practices and how to take them one step further with CertifID.

Title Industry Best Practices According to ALTA

Here’s what those in the title industry need to know about ALTA’s best practices and how to take them one step further with CertifID.

Written by:

Tom Cronkright

Read time:

6 minutes

Category:

Education

Date:

Jun 8, 2022

Real estate professionals in the title industry have a critical job in the lending and home buying process.

Between having to navigate specific regulatory requirements and local, state, and federal laws to handling complex financial and title documentation, those in the title industry are adept at handling millions of dollars worth of transactions every year.

On top of it all, real estate professionals in the title industry also have to be comfortable dealing directly with customers, adapting to new techniques and tools, and securing a lot of personal information.

Having to juggle all of these demands—often under tight deadlines and high levels of scrutiny—mean that title and escrow agents need to constantly be at the top of their game and on the lookout for the latest best practices.

In addition to knowledge sharing among peers, a powerful resource comes directly from the American Land Title Association (ALTA): its Title Insurance and Settlement Company Best Practices, which was published to help title and escrow agents more fully satisfy their roles.

ALTA’s best practices for title industry professionals: Here are the 7 pillars you need to know.

ALTA’s best practices, known as the pillars, should be the starting point for running and managing your title company, helping to minimize risk and fully support your customers. 

Here is a brief summary of each of the pillars and what each is focused on helping you to instill in your day-to-day workflow.

Pillar No. 1: Establish and maintain current license(s) as required to conduct the business of title insurance and settlement services.

Ensuring your business’s insurance and settlement services are current with state licensing and corporate requirements helps to ensure your company is in good standing with the state. Doing so also helps to ensure your processes and procedures are aligned with the latest standards and best practices.

Pillar No. 2: Adopt and maintain appropriate written procedures and controls for escrow trust accounts allowing for electronic verification of reconciliation.

When workloads build and transactions get complex, having standardized, documented procedures for handling escrow trust accounts and verification of activities helps to protect your customers and minimize the risk of the loss of client funds. This pillar also provides additional best practices that focus on the frequency of reconciliation, account naming conventions, and account access controls.

Pillar No. 3: Adopt and maintain a written privacy and information security program to protect nonpublic personal information as required by local, state, and federal law.

In addition to meeting federal and state laws, title companies must have a written information security program that states how they protect client information and guides their actions in the event of an incident. 

These plans should also include how data is stored, handled, and safely deleted and how your security controls are tested and audited. Given the rise in cyberthreats around the globe, the procedures outlined in this pillar can be further strengthened with additional cybersecurity best practices.

Pillar No. 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.

This pillar emphasizes the need for training and standardization to help your title company handle each settlement consistently, thoroughly, and to federal and state requirements. 

This pillar also focuses on the need to verify the identity and qualifications of other professionals involved in the transaction and how to perform the necessary quality checks to make for a smooth transaction.

Pillar No. 5: Adopt and maintain written procedures related to title policy production, delivery, reporting, and premium remittance.

Having documented procedures for each phase of the real estate closing process helps your business to deliver the right services to customers in a timely manner, including the delivery and remittance of their title insurance policies. 

Pillar No. 6: Maintain appropriate insurance and fidelity coverage.

While state and local requirements can vary, obtaining professional liability insurance and errors and omissions insurance can help to protect your company against the normal risks faced in the course of doing business. 

In addition, ALTA recommends considering cyber liability insurance while others in the industry also choose to protect each of their wire transfers with an additional $1 million with a platform such as CertifID.

Pillar No. 7: Adopt and maintain written procedures for resolving consumer complaints.

As real estate professionals, you are there to serve your customers, deliver the quality service they deserve, and build trust in your brand. Having a process to collect and address complaints helps to solve potential issues quickly and strengthen your company’s reputation in the larger real estate industry.

Take your title company to the next level.

As a title industry professional, you pride yourself on your ability to bring organization, precision, and security to each of your accounts. After all, this is what gives your customers confidence in your abilities and peace of mind that their transactions will be handled efficiently and effectively.

ALTA’s seven pillars help your organization form the foundation it needs to operate securely, meet the latest standards, and deliver the service your customers expect. However, with the rise in threats to the closing process and to your customers, title agents can take their work one step further by choosing to secure the mortgage payoff and wire transfer process with a platform such as CertifID. 

Want to learn more about how our platform can bring strong end-to-end encryption to the wire transfer data collection process and protect your clients from tomorrow’s fraudsters? Then make sure to catch up on our To Catch a Fraudster webinar series.

Tom Cronkright

Co-founder & Executive Chairman

Tom is an accomplished entrepreneur and licensed attorney. He has founded and led award-winning businesses to receive honorable recognition in their respective fields. Tom is also a highly sought-after speaker who lends his expertise to the world of real estate, fraud, and security-related topics across the country.

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