New consumer protection measures mean tougher standards for lenders

Joe Taylor, owner of Marketplace Title, is pleased to announce the company has achieved third-party certification from CPA firm Pershing, Yoakley & Associates (PYA) in the American Land Title Association’s (ALTA’s) Title Insurance and Settlement Company Best Practices. The Best Practices provide peace of mind for lenders, who can now be liable for any deficiencies in a title company’s procedures under a new law effective Oct. 3. Third-party certification, rather than “self-certification,” provides ultimate peace of mind.

In many industries “best practices” tends to be a poorly defined concept at worst, and an aspirational goal at best. In the title company business, however, it means only certain existing businesses will now be invited to the closing table. That’s because ALTA has provided a new benchmark by which to judge the ability to provide peace of mind in the real estate settlement process.

Like “best practices,” peace of mind has in the past been hard to quantify. With ALTA’s Title Insurance and Settlement Company Best Practices, however, lenders now have solid criteria for determining which title companies will shield them from risk, which is more critical than ever. ALTA’s Best Practices means lenders can vet title companies more closely, and lenders are increasingly insisting on working with those that are third-party certified. And while the tenets of the Best Practices are standard, “certification” is not.

Marketplace Title began researching Best Practices Certification early this year in advance of the new TILA RESPA Integrated Disclosure Rule, a new law that combines mortgage disclosures under the Real Estate Settlement Procedures Act (RESPA) and the Truth in Lending Act (TILA). The company then determined that despite the considerable commitment in terms of time and cost, its clients deserved the peace of mind that only third-party certification could bring, as opposed to “self-certification,” which some lenders will accept in their due diligence. Self-certification means a title company can download a template of policies and procedures and tell lenders that it is in compliance.

Instead, Marketplace Title contracted with CPA firm PYA to provide an extensive, months’-long inspection, recommend remedies to any deficiencies and produce a standard attestation that follows the CPA standard of certification. The company achieved this very rigorous third-party certification after having to make investments that incurred many thousands of dollars in up-front costs and recurring monthly costs. These include computer system enhancements, the hiring of a full-time compliance officer and a designated IT security manager, and training of staff. During this process, Marketplace Title expanded its physical premises and built a classroom to serve as an educational resource for real estate agents to become well versed in industry changes such as the new law, better serve their clients and build their businesses.

Owner Joe Taylor said, “We decided to view what could have been a daunting process as an opportunity to become an industry leader in response to Best Practices Certification and make the investment in peace of mind for our clients. We don’t do anything halfway, so third-party certification by a CPA firm was the only way to go.”

About Marketplace Title
At Marketplace Title, your peace of mind is our #1 priority. The award-winning company is a leader in its field, and is unusual in having achieved its third-party certification in the American Land Title Association’s Title Insurance and Settlement Company Best Practices. It provides education in the TILA-RESPA Rule and on other business-building topics at its Real Estate Education and Success Center at its corporate office, 10600 Chevrolet Way, Suite 103 in Estero. A Cape Coral office is at 3321 Del Prado Blvd S., Suite 7. For more info visit fltitles.com, call (239) 333-4550 or email Info@FLTtitles.com. Visit www.pyabestpractices.com/verify.php and enter D5P5-X3Qi-1VQQ-3Q to verify certification status.