What are Best Practices?
After the 2008 mortgage meltdown, the federal government explored ways to make mortgage lending and the closing process more secure. The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act made lenders liable for their third-party vendors providing services in connection with consumer credit transactions, including title companies. Dodd-Frank created the Consumer Financial Protection Bureau, bestowing it immense power to promulgate and enforce regulation. Given this liability, it was apparent lenders would be hesitant in choosing title companies.
The American Land Title Association (ALTA) realized that lenders, realtors, and consumers would cautiously choose title companies, in an atmosphere of increased liability and expanding fraud and cyber threats targeting the lending, real estate, and title industries. As such, ALTA created “Best Practices” as a way for title companies to ensure their customers that they meet the most stringent industry standards.
ALTA’s Best Practices requires a title company to implement extensive written procedures in the following seven categories/pillars:
- Licensure, Continuing Education, & Training
- Control of Escrow Trust Accounts & Escrow Funds
- Privacy & Information Security
- Real Estate Settlement Procedures
- Policy Production, Delivery, Reporting, & Premium Remittance
- Levels & Forms of Professional Liability, Fidelity, & Cyber Liability Coverage
- Resolution of Consumer Complaints
Forms of Certification
A title company’s adoption and certification of Best Practices is voluntary and there are three forms of certification:
- Self-Certification – written certification by the title company itself, making an affirmative representation that it is in compliance with Best Practices.
- Underwriter Certification – written certification by a title company’s underwriter, stating that the title company is in compliance with Best Practices.
- Third-Party Certification –written certification that a title company is in compliance with Best Practices by an independent third-party, typically an accounting firm. To-date, several lenders have issued statements that they will only accept third-party certification.
D.D. Hamilton’s Certification
D.D. Hamilton chose the third and most stringent form of certification: third-party certification. Furthermore, D.D. Hamilton retained the leading national firm for ALTA Best Practices compliance: Aprio, LLP (formerly Habif, Arogeti, & Wynne, LLP), to perform an audit. The audit was performed from September 1 – November 30, 2016 and on January 6, 2017, Aprio, LLP certified D.D. Hamilton Title Company, Inc. as ALTA Best Practices Compliant.
D.D. Hamilton meets and exceeds the most stringent industry standards.
At a time of expansive regulation and increased threats of fraud and cyber attacks, D.D. Hamilton is ever vigilant protecting its customers. Some examples of the ways D.D. Hamilton protects its customers are as follows:
- D.D. Hamilton writes for the two largest title insurance companies in the country: Chicago/Fidelity Title and First American. Having strong underwriters gives D.D. Hamilton access to the most cutting edge tools and information in the title industry.
- D.D. Hamilton maintains the most stringent controls over escrow funds in its possession, including: Positive Pay, in-house daily reconciliation, and RynohLive account monitoring and reconciliation services.
- As part of its Best Practices, D.D. Hamilton retained Superior Consulting, LLC, a company that audits banks' IT security and provides assistance with regulatory compliance. Superior audited D.D. Hamilton's IT systems and related procedures to ensure it met the most stringent industry standards and the requirements of Best Practices.
- D.D. Hamilton maintains its terminal server in the Bluebird Network's colocation data center located 85 feet below ground in the Springfield Underground. D.D. Hamilton's IT systems are continually monitored by its IT service provider to protect our customers' sensitive and private information.
- D.D. Hamilton maintains E&O, Fidelity, and Cyber Liability coverage in excess of state and underwriter requirements.