Posts Tagged ‘Governing Documents’

What can title agents do about vendor vetting?

As a title agent, are you obligated to ensure your service providers are in compliance? And if so, how?

The Gramm-Leach-Bliley Act (GLBA), enacted in 1999 (codified as amended at 15 U.S.C Chapter 94: Privacy), establishes basic privacy standards for “financial institutions,” which includes not only lenders, but also title insurers, title agents and settlement/escrow agents.

The CFPB expects lenders to oversee their service providers to make sure that they are in compliance with the law to protect consumer interests; this was expressed in CFPB Bulletin 2012-03, published April 13, 2012. This duty extends to title agents and settlement service providers.

While title agents and settlement service providers are third-party vendors to lenders, those who provide services to title agents and settlement service providers are fourth-party vendors to lenders. The requirement to evaluate, review, and monitor qualifications and performance extends as far down the service chain as necessary to make sure that everyone is in compliance with the rules protecting customers.

So what can you do as a title agent to make sure that your vendors are in compliance?

  • You can make sure that your vendors are contractually aware of their responsibilities. There are some great sample provisions regarding “rights and responsibilities” and “confidentiality and security,” in the FDIC’s Financial Institution Letters, Guidance for Managing Third-Party Risk, which you may choose to include in your vendor contracts.
  • You can establish good vendor selection and management practices:
  • Designate someone within your company to provide oversight as the “vendor manager.”
  • Perform background and reference checks.
  • Provide due diligence questionnaires and checklists.
  • Implement non-disclosure agreements.
  • Train vendors on their consumer protection obligations.
  • Monitor and score performance, and provide feedback; sight visits can be particularly useful.
  • Provide a communication matrix or plan, and include provisions for reporting in the event of a perceived security threat or security breach.

This information is not legal, business or financial advice. It is intended only to be helpful to you and to increase awareness. There may be many ways to approach this issue, and it is always best to consult with legal counsel and subject matter experts to develop a plan that is right for you.

Florida Association Foreclosure, Part 2: The anatomy of a foreclosure by a homeowners or condominium association

In many respects an association foreclosure mirrors a bank foreclosure, with some minor differences.

Once an account is delinquent, the association is permitted under Florida Statutes to place a lien on the subject property for nonpayment of assessments.

Prior to recording this lien, the association is required to send the offending homeowner a Notice of Intent to Lien and to provide a period of time with which to bring the account current (30 days for a condominium association, 45 days for a homeowners’ association).

If the account is not brought current during this time period, the association is permitted to record its lien and institute a foreclosure action in the subject property and against the offending homeowner.

Prior to filing the lawsuit, however, the association is required to offer the offending homeowner one last chance to bring the account current.

Florida Association Foreclosure, Part 1: Understanding the terms of your purchase into a homeowners or condominium association

Because of Florida’s boom in development during the 1990s and early 2000s, many properties are included in planned unit developments, more commonly known as homeowners’ and condominium associations.

If a property is located within one of these developments, activities conducted on and uses of the particular property are governed by the association charged with overseeing the day-to-day operations of the development.

Although we tend only to notice the activities of the association as they relate to aesthetic matters (landscaping, trash disposal, pool maintenance, etc.), much of the association’s duties relate to community finances and enforcement of the association’s governing documents.

While the legal principles involving associations is vast, this blog will focus on one small aspect of the association puzzle: association foreclosures for nonpayment of assessments.

This blog contains general information only, not intended to be relied upon as, nor a substitute for, specific professional advice. We accept no responsibility for loss occasioned to any purpose acting on or refraining from action as a result of any material on this blog.

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