The American Land Title Association (ALTA) Best Practices Framework has been developed to assist lenders in satisfying their responsibility to manage third party vendors. ALTA members advocate a safe and efficient transfer of real estate and have high standards when searching land title records and preparing insurance documents. To provide the best possible chance of avoiding land title problems, risk should be eliminated prior to insuring. As such, effective safeguards should be in place.
The ALTA Best Practices Framework includes seven pillars related to risk
- Licensing – Establish and maintain current License(s) as required to conduct the business of title insurance and settlement services.
- Escrow Trust Accounting – Adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts allowing for electronic verification of reconciliation.
- Protecting NPI – Adopt and maintain a written privacy and information security program to protect Non-public Personal Information as required by local, state and federal law.
- Settlement Processing – 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.
- Policy Production – Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance.
- Insurance Coverage – Maintain appropriate professional liability insurance and fidelity coverage.
- Consumer Compliant – Adopt and maintain written procedures for resolving consumer complaints.
It is recommended that title companies develop a plan of action for following ALTA Best Practices Procedures and implement controls around those processes to effectively mitigate the risk of an unsafe and inefficient transfer of real estate. The key questions companies need to ask themselves are:
- How are we going to demonstrate and tie those practices into our quarterly or monthly processes?
- How are we going to continuously monitor those practices so we’re ready if a client wants to come on-site?
- How are we going to be prepared for an efficient audit once it’s time for one to be performed?
A SSAE 16 or SOC 2 Assessment can satisfy the ALTA Best Practices Framework
There are two main compliance examinations that Title companies can do in order to demonstrate to their stakeholders that their controls are in place and meet the ALTA best practices. One is the Statements on Standards for Attestation Engagements (SSAE) No. 16 and the other is the Service Organization Control (SOC) 2 examination. Utilizing a provider such as A-LIGN to perform these assessments ensures that the ALTA best practices framework is effectively and efficiently implemented within an organization’s control environments. Title agencies need to be prepared rather than determining what’s needed after everything is in place and/or a service has been sold.
Let us answer any of your questions about SSAE 16 or SOC 2 examinations regarding the ALTA Best Practices Framework. Please call us at 888-702-5446 or email us here.