Survey Shows Majority of Title Professionals Working Toward Best Practice Compliance
July 14, 2015
The majority of title professionals have started the process of becoming compliant with ALTA’s Title Insurance and Settlement Company Best Practices, according to Habif, Arogeti & Wynne’s second annual ComplianceSuccess Survey.
The 2015 survey looked at title and settlement professionals’ attitudes and perceptions about compliance, as well as gauged where companies are in the process of becoming compliant. It also examined the challenges businesses are facing when becoming ALTA Best Practices compliant.
HA&W, an ALTA Elite Provider and CPA firm that provides ALTA Best Practice compliance benchmarking, readiness and assurance reporting, conducted the survey in March and April of 2015. The survey included over 200 companies located across the nation which ranged in size from less than 100 residential closings per year to more than 10,000 residential closings per year.
According to the survey, 87 percent of the respondents have completed the first pillar (licensing) of the Best Practices. Pillar 3, which deals with information security and protecting non-public personal information, continues to be the most problematic area with only 63 percent completing this Best Practice. Meanwhile, only 10 percent indicated they had not started working toward Best Practice compliance. Of that 10 percent, the survey showed that almost 60 percent intend to begin the process within the next three months. A sizeable number of respondents who had not begun working toward compliance (29 percent) indicated that they do not intend to begin the process until lenders require it.
That day may be coming soon with more lenders announcing their requirements.
“National and regional institutions like Wells Fargo, SunTrust, BancorpSouth, IBERIABANK and Trustmark have been announcing their compliance guidelines for their third-party partners,” said Lee Fields, managing director of Business Consulting Services at HA&W. “Guidelines currently range from requiring completed self-assessments to certifications by independent third parties by certain dates.”
The most significant hurdle to completing implementation was time. According to the survey, 71 percent said the time needed to focus on Best Practices took attention needed to run their day-to-day business. Other top issues slowing implementation included cost (59 percent), staffing/resources (50 percent) and lack of guidance from lenders around certification.
When asked if they had assessed their current level of compliance, 40 percent of respondents indicated that they had, whether through ALTA’s self-assessment readiness guides or through a third-party assessment. An additional 42 percent of respondents said that either their ALTA self assessment or third-party assessment was in progress, while only 16 percent said that they had not begun to assess their level of compliance. Small companies were more than twice as likely as large companies to have not yet begun assessing their current level of compliance, the survey showed.
Of those who had completed their assessment process, the overwhelming majority said Pillar 3 cost the most money and took the most time to become compliant.
“Title agents are learning that building a strong security and privacy program that can be proven is not necessarily simple,” said Dan Schroeder, partner-in-charge of Information Assurance Services at HA&W. “The change can pervade procedures for all personnel, not just IT, and requires well-defined policies and procedures, and oftentimes technology investments. While many agents may find this to be daunting and frustrating, all indications are that the oversight and requirements from both regulators and lenders are such that this change is here to stay – whether this is driven by ALTA, other regulations or simply lender vendor management programs. The public is not going to tolerate looseness and lack of accountability for entities entrusted with custody of personal information.”
Contact ALTA at 202-296-3671 or [email protected].