Mortgage Professionals Should be Optimistic About the Future

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Feature Secure email If you are not already send- ing prelims to your lenders via secure email, you are openly acknowledging that you do not understand or acknowl- edge the importance of protecting non- public personal information (NPPI). You may have already lost a referral source and simply don't know it yet. Document destruction Secure shredder boxes for all excess documents. Daily three-way reconciliation In 2009, the New York Bureau of Insurance recommended to agents: "Get an automated solution to monitor your escrow accounts through three-way and daily reconciliation of escrow accounts". Large national title agencies (LNTA) reconcile three ways each day, as do practically all the title and escrow agencies in the West. When I have been out West, as I recently was for the Pacific Northwest Annual Conference, every agent rec- onciled daily, utilized positive pay, and limited the acceptance of good funds. I jokingly said, "Back East we don't know escrow!" No offense intended, but those are the simple, hard facts. Positive Pay with Payee Match At a very minimum you must utilize positive pay. If you currently A Crash Course in Compliance Here's how to solve compliance problems before they start, based on American Land Title Association Best Practices. By Richard M. Reass 22 | TH e M ReP o RT working feverishly to put in place Master Service Level Agreements to ensure they continue to re- main viable in the new market- place. They have embraced the American Land Title Association (ALTA) Best Practices as a perfor- mance baseline. These large agen- cies have established a compliance infrastructure with dedicated compliance officers, budgets for implementation, and process improvements already being put into place. The aim is to protect client non-public personal infor- mation (NPPI), ensure IT and physical security, and safeguard escrow settlement funds. At the same time, many have expressed concern over the dimin- ishing role of small, independent title agencies. Large or small, agen- cies resisting change have no fu- ture. But even those in the midst of change still wonder how much is enough and whether they can still compete—or even survive—in this new environment. Size does not preclude fraud and defalcation; rather it can magnify the losses exponen- tially. TitleServ, a large national title agency, was shuttered in 2014 amid accusations of fraud amounting to millions of dollars. More recently, LandCastle Title, an attorney-run title agency in Georgia, was bailed out by another company after a senior partner was accused of embez- zling more than $30 million in settlement funds. Doing nothing is not an option. But smaller agencies will never have the financial resources avail- able to the large, national compa- nies, even though the magnitude of their compliance concerns is exponentially greater. Many have multiple offices in multiple states and hundreds of employees. Each employee in each office must be trained, certified, and compliant. Of course, that means agencies face additional costs. For a small title company, initial compliance expenses could be anywhere from $25,000 to $50,000. From there, ongoing compliance will likely require a minimum of $10,000 a year. It's all a matter of prioritiza- tion, planning, commitment, and follow-through. In the end, small providers must decide whether their businesses are worth $50,000. If you have a good relationship with your banker, this is the time to request a line of credit. Frankly, title and settlement companies are only being required to do what agents should have been doing all along. Your clients should expect that your agency will protect their personal data Simple and eaSy Starting pointS: Does your firm utilize any of the following security products or services? Credit: LenderSecure survey of 49 U.S. title and settlement companies, November 2014 Document Destruction Compliance Training Escrow Reconciliation Positive Pay Background Screening IT Security & Assessment Email Encryption Data Security/Data Encryption Cyber Insurance

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