Changes to Pillar 4 of Best Practices Add Third-party Signing Standards

November 22, 2016

Changes to ALTA’s Title Insurance and Settlement Company Best Practices that went into effect in October included the addition of standards for engaging third-party signing professionals.

In addition to addressing recording and pricing procedures, pillar 4 now includes policies for when title and settlement agents use a third-party signing professional to close transactions.

Pillar 4 now includes the following:

  • Maintain written procedures to help ensure that any third-party signing professional—including Notaries Public—engaged by a title or settlement company  possess the appropriate qualifications, professionalism and knowledge … determined by a mix of legal and contractual obligations.

To comply, companies must conduct the following due diligence:

  • Verify that the third-party signing professional is covered by Errors and Omissions insurance, and a Notary surety bond, if required by state law.
  • Require that third-party signing professionals furnish evidence of their current state licensure, where required, or evidence if they have attained a recognized and verifiable industry designation, and provide an acknowledgement of compliance with Company’s instructions and Company’s information security program as detailed in Pillar 3 of these Best Practices.

It should be noted that if a third-party signing professional is directly employed by a title or settlement agent or underwriter that provides evidence of compliance with the Best Practices, Company does not need to perform the due diligence requirements outlined in this section of the ALTA Best Practices.

Also, the company that contractually retains the third-party signing professional is responsible for verifying that the applicable standards are met.

“We felt that it was important to include standards in the Best Practices Framework to reflect the increased prevalence and reliance by title insurance agents and underwriters on third-party signing professionals,” said Don O’Neill, a member of the Best Practices Executive Committee and chief compliance officer at WFG National Title Insurance Co. “Given this trend and the development of industry designations and certifications in the notary industry, this addition highlights these tools to agents.”

Contact ALTA at 202-296-3671 or