Title agencies in the past performed nearly every function of the title and closing inhouse, relying only rarely on outside assistance for more technical or complicated legal tasks.
Today, successful title agencies are leveraging highly specialized services to build their businesses while their in-house staff focuses on their core competencies.
While that is a great strategy, it also comes with a responsibility that has been highlighted by federal and state regulators to ensure those third-party providers are meeting a host of standards required by regulatory oversight.
Some of the key performance indicators title agents should evaluate when rating their vendors and third-party providers is related to risk. There are three primary aspects of vendor risk assessment that title agents should consider: protection of client data, compliance, and disaster recovery.
Protection of client data
This first element is a no-brainer. If your vendor partner has access to your client data in the course of the services they provide, they must be held to the same standards you must meet as required by ALTA Best Practices and your state regulatory authority.
It is not enough to have verbal assurances from a third-party provider. Having their protocols in writing is a necessity, as regulators will want to know in the course of an audit that you have properly vetted your vendors to ensure their technology and systems are properly safeguarded and their employees are trained to handle client information in a way that protects it from external access.
Compliance
Evaluating your third-party providers’ practices with regard to regulatory requirements can include everything from basic cyberfraud training to meeting the requirements of their particular niche. For instance, if you are using a vendor to manage your remote-online notarization, ensure that this provider is compliant with the standards in the state in which you are closing the transaction. Each state has vetted RON providers across the country to ensure they meet specific requirements as dictated by that state’s legislature. RON is a recent innovation that has quickly altered the regulatory landscape in states in regard to what is required under the state’s mortgage closing practices.
Disaster recovery
Similar to protecting customer data, your third-party provider should have a disaster recovery plan that is in line with ALTA Best Practices. This includes a continuation of service plan should a catastrophe impact their technology or physical location as well as a robust back-up system that preserves your data embedded in their systems.
At Positively Balanced, we meet and exceed the ALTA Best Practices standards in all of the work we do for our clients in the area of escrow account management and reconciliation services. Call us today to learn more!
Comments