It’s hard to believe that it has already been one year since Alliant National and our technology partners launched SecureMyTransaction in response to the urgent need for robust, scalable fraud prevention and identity verification tools. Over the last year, many of you have provided feedback on our service, and I am humbled by the stories I’ve heard about how SecureMyTransaction has helped defend against fraud. Seller impersonation, vacant property fraud, wire fraud, and deed and document forgeries are deeply damaging to our industry and the consumers we serve, and I sincerely thank you for your valuable input.
Thanks in large part to your help and support, I am proud to share two significant updates regarding SecureMyTransaction.
First, the American Land Title Association (ALTA) has announced today that SecureMyTransaction has achieved ALTA Elite Provider status. As part of that process, SMT was rigorously vetted as a provider and received recommendations from ALTA members. This designation is an important milestone and affirms SMT’s effectiveness in helping agents respond to increasingly sophisticated fraud schemes.
Second, we’re excited to announce that this week, SMT is being updated to include new features allowing you to customize the user experience with your branding, the branding of your real estate partners, and even lenders. This includes incorporating your logos, contact information, and messaging for a seamless, integrated ID verification experience that reflects your unique business style. With this added ability to customize the platform, SMT not only offers protection but also supports brand visibility and business growth.
We remain committed to growing and enhancing SecureMyTransaction, and your feedback will guide our efforts. You can also follow updates at SecureMyTransaction.com.
If you have thoughts or questions about SecureMyTransaction, please reach out to me or any member of our team.
The American Land Title Association has published its ALTA Best Practices Framework version 4.0, featuring several significant updates to Pillars 2, 3 and 4 in response to what the trade group identified as a changed environment, including new laws, increasing fraud threats, and more complex technology.
On a recent ALTA webinar explaining the changes, the association listed a litany of ways the industry has changed over the past decade, including earnest money apps, remote workers, an explosion of new technology, remote online notarization, more sophisticated fraud, real time payments, and a growing technology environment that includes a complex web of third-party integrations.
Because of the drastically different environment in which title agents are now working, ALTA has broadened its focus to address increasing complexity in operations, including safety, customer experience and efficiency.
“These revisions have been made with the specific objective of allowing agents and direct operations to continually improve their practices and procedures to ensure financial, data security and operational stability, and to provide lenders and other constituents with the assurances that their needs are being fulfilled by these efforts,” ALTA said in its official release of version 4.0 on January 23.
For Alliant National agents, it is important to note that the implementation date of May 23 will affect assessments and renewals, which if conducted after that date, must be based on the 4.0 framework.
Let’s take a look at some of the most significant changes.
Pillar 2: Escrow Accounting:
ALTA made several changes to Pillar 2, including updating the treatment of non-settled funds and outstanding file balances, use of fintech applications, escrow funds training, and wire transfers.
Loss of Funds
The Pillar 2 purpose section was updated to note that the loss of funds in a transaction may fall outside of E&O coverage and could become the responsibility of the title agency.
Fintech Applications
In addition to having policies and procedures in place that prohibit or control the use of ACH transactions and internal wire transfers, agents must also ensure procedures are in place for electronic/digital receipt of funds from web-based fintech applications.
When using a third-party earnest money deposit or disbursement platform that facilitates digital transfer of escrow account receipts and disbursements, the agent must ensure the platform meets good funds law requirements and is not subject to the Electronic Funds Transfer Act (EFTA), which would allow for reversal of consumer payments.
On the ALTA webinar, association representatives noted that one of the most important changes agents should pay attention to is the requirement that they carefully vet platforms they are using to receive incoming funds to make sure those platforms do not allow for reversal of funds.
Along those same lines, in the previous versions of the Best Practices, agents were absolutely prohibited from accepting and wiring out funds before they had cleared.
Recognizing that agents were sometimes taking this risk in extenuating circumstances, the new language provides some leeway, saying that agents should ensure that undue risk is not being undertaken for deposits that are not fully settled.
As an example, a title agent may accept a check after a closing for an inconsequential amount – $20 for example – but are prohibited from incurring the risk of accepting a substantial amount of money and wiring out before it has cleared. The level of risk should be commensurate with the amount of money being risked and the company’s size and ability to assume that risk, and that threshold must be determined by each company.
Wire Transfers
Given growing security concerns over the vulnerability of wire transfers, agents are now required to have documented procedures to verify wire transfer instructions independent of the initial communication, and those verification procedures should include multi-factor authentication (MFA). (See ALTAs Outgoing Wire Preparation Checklist)
Best practices were also updated to recommend the use of wire verification services, with the caveat that those providers should be vetted to assess risk of use, security protocols and the provider’s ability to protect consumer data.
ALTA pointed out during the webinar that companies can have the most sophisticated policies to protect themselves against wire fraud but may still find themselves exposed to risks due to human error. Wire verification services, where they are available, efficient and economical, should be used as another tool to prevent fraud.
Background Checks
While the original best practices required agents to get background checks only on employees who had access to customer funds, the updated procedures extend that requirement to all employees at the time of hire with updates every three years thereafter.
Aging Escrow Balances
Procedures are updated to require that managers review and approve any activity in aging escrow file balances.
Pillar 3: Privacy and Information Security Programs to protect NPI
ALTA made important updates to many aspects of an agent’s responsibility to protect NPI, including physical protection, cloud security, and the agent’s incident response plan.
Written Information Security Plan (WISP)
One of the most extensive changes to Pillar 3 is the requirement for a written information security plan (WISP) and a privacy plan to protect NPI as required by local, state and federal law. Specifics of the updated procedure include:
The use of MFA for access to systems containing NPI
A password management plan that requires unique login names and system passwords to access systems containing NPI
System passwords must meet minimum standards, which include:
reentry of the password after system idling
passwords that expire after a certain period of time
difficult-to-guess passwords that include upper- and lower-case letters, special characters and a minimum length of eight total characters
Timely software updates, which when left outdated, can result in data breaches, cyberattacks, ransomware attacks and other NPI exposure
Background Checks
One additional requirement is that access to the company’s information systems must be granted only to authorized employees and authorized service providers who have undergone background checks.
This extends to physical access as well, with version 4.0 adding the caveat that only authorized employees and authorized service providers who have undergone background checks should be allowed access to desk, cabinets or storage areas where NPI is housed.
Miscellaneous Changes
Other changes to Pillar 3 include:
Extending network security requirements to use of cloud systems, virtual equipment, data centers and third-party hosting
Updating the disaster recovery and business continuity plan to specifically include a compromise of systems or facilities
Adding language that notes the inclusion of continuity of operation for consumer settlements and timely notification to all parties in case of any delays due to a disaster
Noting that the written incident response plan should follow the recommendations of the ALTA Cybersecurity Incident Response Plan
Specifying that service provider policies are to be consistent with the company WISP – including IT consultants, outsourcing company employees and third-party software employees. Software tools and resources are also to be consistent with WISP
Pillar 4: Settlement
Pillar 4 updates increase an agent’s responsibility for vetting internal and external signing professionals and for selection of remote notarization platforms, as state law and underwriter guidelines have changed dramatically since the pandemic. As part of the new consumer focus, changes were also implemented related to staff training and consumer notifications.
Training
Pillar 4 is updated to include training for staff to provide a framework for:
Minimizing errors
Enabling a timely response to concerns raised following a settlement
Addressing consumer complaints
This updated requirement for improved training calls for agents to created a formalized training program for every aspect of the title and escrow process. While it may have been sufficient in the past to ask a new hire to shadow another employee for a few days to learn the procedures, ALTA has now determined an informal approach can lead to inconsistencies and errors.
A formal training program can ensure everyone within the agency is handling each aspect of the process in exactly the same way. It also overrides the dangers of a new employee from going rogue and “doing it the way we did it at my previous agency.”
Most importantly, the updated Best Practices framework encourages agents to document every aspect of the training so that all managers within the agency follow the same protocols when training a new employee.
Remote Online Notarization (RON)
Agents whose employees will be notarizing documents via remote notarization are required to select a platform authorized by the state in which the notary is located and one that is approved by the agent’s title underwriter. Returning once again to the issue of NPI, the updates require the agent to ensure the platform is capable of meeting the minimum requirements of the state, including retention of the video and safeguarding NPI. This same level of oversight is required if the agent engages a third-party to notarize documents via RON.
Signing Professionals
As with RON oversight, responsibility is placed on the agent to verify signing professionals have state and contractually required licensing and insurance. In addition, agents must perform background checks for signing professionals employed by the company and ensure that third-party signing professionals have the required professional designation, insurance and bond.
Miscellaneous Updates
Pillar 4 includes several other miscellaneous updates, including:
A requirement to provide an affiliated business relationship disclosure in compliance with state and federal law
Guidance for additional procedures to follow when using an e-recording vendor
New guidance in the payment of fees or tax for escrow trust accounts
Pillars 5, 6 and 7
Only one update was made to Pillar 6, which is a new mandate to review cyber, crime, and E&O coverage limits and exceptions annually.
No substantive changes were made to Pillars 5 and 7.
Updated Documents
As part of this revision, ALTA also published the following ALTA Best Practices Framework documents, available at https://www.alta.org/best-practices/.
The Best Practices Assessment Procedures
Internal Assessment Report and Letter
Third-Party Assessment Report
Alliant National agents are encouraged to carefully review current policies and procedures in light of these important best practices updates. This is especially critical for agents who are facing assessments after the May 23 implementation date.
Please contact your Alliant National underwriting counsel if you have any questions or concerns as you review and implement these new policies.
Is your agency set up to close transactions using remote online notarization (RON)? If so, the American Land Title Association (ALTA) is encouraging you to let lenders know by updating your ALTA Registry listing.
“RON is in high demand and lenders are actively looking for title and settlement companies that can close their loans using this technology,” the association said in a recent post. “Being RON Ready could lead to new revenue during these difficult times.”
There is no cost to be included on the ALTA Registry.
Download the latest status Recording Jurisdiction Operating Status Report anytime.
Is your
local recording office open? To protect the health of their employees, many
governmental recording offices have decided to reduce staff, reduce hours or
temporarily close their doors due to risks associated with the COVID-19 virus.
ALTA is
tracking the operating status of recording jurisdictions around the country
based on reports from ALTA members, colleagues and State/Regional Land Title
Associations.
If you have
updates to the information you find, please contact ALTA by emailing details to
countystatus@alta.org. ALTA is currently collecting the following information:
Operating
Status (Open, Closed, Partially Open)
Posted
Reopening Date (if available)
Search
Status (Online, Walk-Ins, Unavailable)
Title
Plant Data Available (Yes/No)
Recording
Status (eRecording – All or Limited, Walk-Ins, Drop-Offs, Mail, Unavailable)
County
Plan (Staffing, reopening plan, how the backlog/queue of recordings will be
processed)
ALTA ONE is next week, October 22-25th at the
Fairmont Hotel in Austin, Texas. It’s an important event bringing together
leaders in the title industry to swap new ideas and business practices in
educational sessions that really work.
As always, there’s a lot of content! ALTA ONE will cover a range
of hot topics, so which sessions are a must-attend?
We enlisted the help of Nathan Marinchick, Director of Research
and Educational Programming at Alliant National, to help identify the top 10
education sessions you may want to place on your ALTA ONE dance card next week.
Wednesday, October 23, 2019
9:00 am – 10:00 am OMNI SESSION: THE POWER OF PURPOSE
ALTA’s
CEO, Diane Tomb, will share her vision for the coming year and what she sees as
the industry’s greatness opportunities and weaknesses. And Entrepreneur, author
and “ad man” Roy Spence will help ignite your “epiphany of purpose” during this
keynote — Have you found your purpose? What motivates you? What truly drives
your company? Discover and fulfill your purpose.
10:30 am – 11:30 am NOTABLE:
TEXAS TITLE AGENTS ARE ROCKING WITH RON
In 2018, Texas became the 3rd
state to permit remote online notarization. This session will provide a
first-hand perspective on implementing RON in your operation. As RON becomes
legal in your state you won’t want to miss this opportunity to learn from early
adopters.
1:00 pm – 1:30 pm ENGAGEMENT LAB: COMMERCIAL BUSINESS:
GETTING YOUR FEET WET WITHOUT SINKING THE BOAT
This lab is designed to demonstrate how your title and closing
skills and experience have given you a solid foundation to explore the world of
commercial real estate transactions with confidence.
2:00 pm – 3:00 pm NOTABLE: RESPA 411
This session will review the latest cases and enforcement
actions on RESPA, affiliated businesses, and marketing services agreements.
Come with your questions and discuss the latest trends in RESPA compliance. Experts
will address the future of the CFPB and enforcement actions.
3:30 pm – 4:00 pm ENGAGEMENT LAB: BUILDING A FLEXIBLE
WORKFORCE
Our industry is facing significant changes from a staffing standpoint. How do you face the challenges of finding new people when you have a retirement or just the everyday turnover? What does flexibility in your workforce look like and how can you successfully adapt your business to recruit and retain new staff through these changes? Join this lab to discuss these challenges and brainstorm solutions.
3:30 pm – 4:00 pm ENGAGEMENT LAB: CULTURE AUDIT WITH ALLIANT NATIONAL’S BOB GRUBB
Culture is central to the health of an organization. However,
it is often invisible to those in it, making it difficult to understand what
our culture is, and more importantly, what areas require improvement. This is
why a culture audit is a good idea. Join this lab to learn how this process
works and what to do with the results.
Thursday, October 24, 2019
8:45 am – 10:00 am OMNI SESSION: FROM THE DARK WEB TO WALLSTREET (SPONSORED BY INCENTER TECHNOLOGY)
Wire
Fraud keeps us up at night. Listen to two local law enforcement detectives
involved in a headline-making case in which money was stolen, then recovered,
through a wire fraud incident. Additionally, an Austin based Realtor will
discuss how unsuspecting clients can fall victim to wire fraud schemes. And Cybersecurity
is top-of-mind for all of us, whether we’re thinking about our professional or
personal lives. The director of cybersecurity for Morgan Stanley Wealth
Management and Investment Technology, Rachel Wilson, knows exactly the dangers
you face. Wilson will share her expertise on how best to protect your business
and avoid falling prey to scams and attacks.
10:30 am – 11:30 am NOTABLE: PROPOSED ALTA POLICY FORMS – WHAT’S COVERED, WHAT’S NOT?Title insurance is what we sell, so it’s imperative to know when coverages change. Hear from two ALTA Forms Committee experts about the proposed updates to the 2006 policies. You will be introduced to the new versions, know why changes were made, and what they mean for your business.
12:30 pm – 1:30 pm NOTABLE: THE
UNEXPECTED BENEFITS OF DIGITAL CLOSINGS
Often when we talk about digital closings,
we talk about what’s in it for the consumer or lender. But you should also
focus on the benefits that digital closing can bring to your operation. In this
session, learn how digital closing technology can change your workflow and
improve efficiency – while also providing the more convenient and prompt
closing your consumers and lenders want.
12:30 pm – 1:30 pm NOTABLE: 8 LEGIT WAYS TO MARKET YOUR CULTURE TO HUMANS UNDER 40
If you’re job searching and under the age of 40, you’re probably not going to get excited about a job that offers “competitive benefits” and a “standard work week” with “two weeks of paid vacation.” Sorry, title pros! The new wave of employees has different expectations and you do have to adapt and market your values differently. Take home 8 great ideas to attract talented employees for your business.
