Best Practices 2013 - Res Title -€¦ · Best Practices Manual Page 1 ... Real time disaster...

BestPracticesManual2013

www.res-title.com

Res/Title,Inc.ResidentialTitle&EscrowServices,P.C. www.restitle.com

BestPracticesManual Page1

MissionStatementThisBestPracticesManualhasbeendevelopedbyRes/Title,Inc.(ResidentialTitle&EscrowServices,PC)inaccordancewiththeguidelinessetforthbytheAmericanLandTitleAssociationandincompliancewithboththeGramm‐LeachBlileyActandtheConsumerFinancialProtectionBureauestablishedundertheDodd‐FrankAct.ThegoalofthismanualistooutlinethepoliciesandproceduressetforthbyRes/Title,Inc.inourcommitmenttoprotectthesecurityoftheconsumersandcontinuetoprovideprofessionalqualityservicetoourclients.IntroductionRes/Title,Inc.’sBestPracticesManualfollowstheguidelinesoftheAmericanLandTitleAssociationwhichwasdevelopedinorder“tohelpmembersillustratetoconsumersandclientstheindustry’sprofessionalismandbestpracticestoensureapositiveandcompliantrealestatesettlementexperience.”1ThecompilationofthismanualdrawsfrompreviouslydesignedpoliciesandproceduresactivewithinRes/TitleincludingourthirdpartycertifiedInformationSecurityPolicyManual.Infurthercompliancewiththenewregulatoryenvironment,Res/Title,Inc.isalsoanapprovedsettlementagentwithSecureSettlements,Inc.

1 http://www.alta.org/bestpractices/docs/ALTA_Title_and_Settlement_Company_Best_Practices.pdf



BestPracticeOne–LicensingDefinition:Establishandmaintaincurrentlicense(s)asrequiredtoconductthebusinessoftitleinsuranceandsettlementservices.Res/TitlePolicyandProcedures:AllRes/TitlelicensesaremaintainedthroughtheAdministrativeDepartment.CurrentlyRes/Titleisactiveandingoodstandingin27includingtheDistrictofColumbia.AlistingofcurrentlicensenumbersisavailableinAppendixA.

Licensesarerenewedbasedonstateregulationsandattheearliestpointthatrenewalbecomesavailable(typically90daysinadvance)

AnnualReportsarefiledandcompletedyearlywithallapplicablefees Whereapplicable,continuingeducationcreditsarecreditedforagent

licensingBestPracticeTwo–EscrowAccountControlsDefinition:Adoptandmaintainappropriateandeffectiveescrowcontrolstomeetclientandlegalrequirementforsafeguardingofclientfunds.Res/TitlePolicyandProcedures:Allescrowfundsaremaintainedinseparatedesignatedaccountswhicharereviewedforreconciliationdiscrepanciesonadailybasis.Theseaccountsaremonitoredunderthefollowingcontrols:

DailyreconciliationofdebitsandcreditstotheaccountaswellasavailablebalancesusingthelatestRhynoSoftware

PositivePayandACHDebitblockssetuponallaccounts Openescrowbalancesandoutstandingchecksreviewedbymanagementon

aweeklybasis ThreeWayReconciliationscompletedonamonthlybasisandreviewedfor

accuracybymanagement Appropriateauthorizationlevelsaresetandmaintained Recipientoftopunderwriterratingsinyearlyaudits



BestPracticeThree–InformationandDataPrivacyDefinition:EstablishandmaintainawrittenprivacyandinformationsecurityprogramtoprotectNon‐PublicPersonalinformationasrequiredbylocal,stateandfederallawRes/TitlePolicyandProcedures: Res/Title,Inc.hasacomprehensivesecurityprogramdesigned to insure that all necessary information security safeguards are in place andadequately address GLBA requirements. All employees of Res/Title are expected tocontribute to this program and report any incidents that may affect the security of theorganization’s information systems. The following policies are addressed withinRes/Title’sInformationSecurityPolicyManualwhichhasbeenreviewedandapprovedbyathirdpartyITCompany.

Controlledaccesstophysicalandelectronicstorageaswellassecuredestructionofphysicaldocuments

Securetransmissionofinformation Monitoringofthirdpartyserviceprovidersaccess Physicalentrycontrolstopreventunauthorizedaccess Networkguidelinesandaccesscontrolsincludingrestrictionsonuser

authenticationsandauthorization Remoteaccesscontrolsandrestrictions Uptodatevirusmanagementsoftwareandfirewallcontrolsagainst

malicioussoftware,virusesandunauthorizedwebsites Realtimedisasterrecoveryimagingofallserverswithadditionalonsite

backup BusinesscontinuityPlanfordisasterpreparedness SecurityIncidentReportingandResolution Backgroundchecksonallpersonnel Trainingofemployeestoensurecompliancewithprogram RestrictionsandtheappropriateusesofRes/Titlesystems



BestPracticeFour–SettlementPoliciesandProceduresDefinition:AdoptstandardrealestatesettlementpoliciesandproceduresthatensurecompliancewithFederalandStateConsumerFinanciallawsRes/TitlePolicyandProcedures:Res/Title’suseofsoftwareandtechnologyallowsustotrackafilethrougheachstepoftheclosingprocessandprovidecompletetransparencyoftheworkbeingdoneoneachfile.Assuchweareabletoverifythateachpartoftheclosingprocessadherestoaccuratecompanyproceduresandthatchecksandbalancesareinplaceto monitor these procedures. A full listing of settlement procedures is attached asAppendixB.Theseinclude:

Obtainingproperinformationrequiredpriortoclosing Uptodateaccesstopremiumrateinformation Completereviewofclosinginstructions Properprocessingofmortgagepayoffs Accuratedisbursementofproceedsandhandlingofescrowfunds Timelyandaccuraterecordingguidelines

BestPracticeFive–TitleProductionDefinition:Adoptandmaintainappropriateproceduresfortheproduction,delivery,reportingandremittanceoftitleinsurancepoliciesdesignedtomeetbothlegalandcontractualobligations.Res/Title Policy and Procedures: Res/Title, Inc.’s policy is to deliver all policies tocustomerswithintheguidelinessetforthbytheunderwriters’agencycontracts(generallyby theendof the first fullmonth followingclosing). Policiesarepreparedanddeliveredfollowingreviewthatalltermsandconditionsofthetitleinsurancecommitmenthavebeensatisfiedandallclosingdocumentsandnecessaryreleaseshavebeenrecorded.



BestPracticeSix–Errors&OmissionsandFidelityCoverageDefinition:MaintainappropriatelevelsofprofessionalliabilityandfidelitycoveragetoensurethefinancialcapacitytostandbehindtheprofessionalservicesprovidedRes/Title Policy and Procedures: Res/Title, Inc. consistently maintains all levels ofinsurance as required by underwriters and lenders and that is comparable to thecomplexity,natureandscopeofouroperations.Coverageisheldforprofessionalliability,fidelity coverage (including employee theft, forgery & altercation, computer and fundstransferfraud)aswellassuretybondcoverageinanystatesthatitisrequired.

Type Policy#Expiration

Date CoverageLimitCommercialUmbrella B4017281823 05/25/14 $3,000,000.00

CommercialGeneralLiability B4017480094 05/25/14$1,000,000/occurrence$2,000,000/aggregate

WorkersComp WC417480144 05/25/14 $1,000,000ERISAPensionFundBond 69504650 03/27/14 $10,000FLCommercialBlanketFidelityBond 70059902 03/06/14 $150,000VATitleSettlementAgent 70105401 03/06/14 $100,000TNTitleInsProducersBond 70271952 03/23/14 $25,000FLTitleAgentBond 70059897 03/06/14 $35,000VAIndAttySettlementAgentBond 70105388 03/06/14 $200,000

ProfessionalLiability(E&O)PFP6018229‐

01 02/03/14$1,000,000/claim

$2,000,000aggregate

FidelityBond 105825380 08/19/14

EmployeeTheft‐$1,000,000Forgery‐$500,000

ComputerFraud‐$500,000ComputerRestoration‐

$100,000FundsTransFraud‐$500,000

ClaimExpense‐$5,000



BestPracticeSeven–ConsumerComplaintsDefinition:Adoptandmaintainproceduresforreceivingandaddressingconsumercomplaintssothatanyinstancesofpoorserviceornon‐compliancedonotgoundiscovered.Res/TitlePolicyandProcedures: Res/Titleisverysensitivetoanycomplaintsthataremade. AnyandallcomplaintsreceivedbyanemployeearetobeforwardedtoourChiefOperationsOfficer for immediateresolution. Thisresolutionwillalways includea followuptonotonlytheconsumerbutalsotheirloansofficertoensurethatitisagreedthattheissuehasbeenfixed. Incertaincases,thecomplaintwillalsoresult inaverbalfollow‐upwith an employee regarding the circumstances causing the complaint and a review ofRes/Title’spoliciesandprocedures.

FurtherinformationregardingRes/Title’sBestPracticescanbeobtainedbyemailingusatcompliance@res‐title.com.



APPENDIXA‐LICENSING

RES/TITLE,INC.StateLicensesandSuretyBonds

STATE

AGENCYLICENSE&EXPIRATIONDATE

(Agency‐Res/Title,Inc.)

AGENTLICENSE&EXPIRATIONDATE(Agent‐JamesV.

Paolino)

ArizonaLicense#889255Exp.04/30/2015 NotRequired

ColoradoLicense#370182Exp.02/01/2015

License#369379Exp.12/31/2014

Connecticut N/A N/A

Delaware**License#1106249 Exp.02/28/2015

**License#1106079Exp.02/28/2015

DistrictofColumbia

BasicBusinessLicense#2899168/65128XXXX‐

69004704Exp.05/13/2014License#2896190Exp.12/31/2014

Florida

#P043847 NoExpiration(forTitle

Agencies)

#P041630NoExpiration(aslongasinGoodStandingwith

HomeState)

GeorgiaLicense#118788Exp.12/31/2014

License#784367;Exp.12/31/2014

Illinois

CertificationIssued5/30/2007

(OnlyAuthorizationRequired;NoExpiration) NotRequired



STATE




Paolino)

IndianaLicense#533198Exp.04/30/2014

License#531093Exp.03/31/2015

Kentucky

NotRequired(TitleInsuranceisnota

licensedline)

NotRequired(TitleInsuranceisnota

licensedline)

Maine

License#AGN158072

*Exp.4/1/15

License#PLN120510NoExpiration(aslongasingoodstandinginhome

state)

Maryland#NPF99953622Exp.6/5/14

#099953664Exp.12/31/14

Massachusetts N/A N/A

MichiganLicense#0081927(noexpiration)

License#0427136(noexpiration)

MinnesotaLicense#40020700Exp.10/31/2014

License#40018230Exp.12/31/2013

NewHampshireLicense#2040063Exp.05/31/2014

License#0390000(DebraJ.Thompson,Esq.)

Exp.09/30/2014

NewJerseyLicense#1187784Exp.05/31/2014

License#1180279Exp.12/31/2013

NewYork NotRequired NotRequired

NorthCarolinaLicense#1000002744

Exp.3/31/2014License#8641007(NoExpiration)



STATE




Paolino)

OhioLicense#3567109/30/2013

License#72352412/31/2014

PennsylvaniaLicense#465853Exp.7/17/2014

License#464238Exp.12/31/14

RhodeIsland

License#2041431(Eff.7/1/2007‐No

Expiration)License#2041092Exp.12/31/2014

SouthCarolinaLicense#167294

*1/1/14License#437570

5/5/14

TennesseeLicense#2031069

03/01/2015License#970355Exp.12/31/2013

Vermont NotRequiredLicense#339381Exp.03/31/2014

VirginiaLicense#113252Exp.06/30/2014

License#507496(NoExpiration)

Wisconsin NotRequiredLicense#2498743Exp.12/31/2013



APPENDIXB–SETTLEMENTPOLICIES&PROCEDURES

Software

SoftProEnterprise(upgradingtoSoftProSelectin2014) GreenFolders(PaperlessManagementSystem) SharePoint(Marketing/SalesTeamManagement)

GeneralGuidelines

WeacknowledgethatLendersexpectfulldisclosureofallreceiptsanddisbursementsinaccordancewithwrittenmutualinstructions.

AllsetsofClosingInstructionsarecollectedandreviewedpriortoclosing. IfanyonesetofClosingInstructionsisadversetoanothersetofclosinginstructions–we

obtaininwritingfromallpartiesconsenttothechangesmadetocorrecttheadversematterspriortoclosing.

Theclosingisperformedinaccordancetoallinstructionsfrom:

a)LenderClosingInstructionsb)TitleCommitmentc)PurchaseAgreementd)Anyothermisc.agreements(EscrowAgreements,etc.)

FollowallHUDRegulationsinpreparationoftheHUDSettlementStatementsandbesurethatALLdisbursementchecksMATCHEXACTLYastowhatisshownontheHUDSettlementStatement.

SpecificDetailedGuidelines

DisbursementofBuyer/BorrowerProceeds: Anyamountshownonline303oftheHUD‐1SettlementStatement(fundsduefrom

Buyer/Borrower)mustcomeintoyourescrow/trustaccountfromtheborrowerorbedisbursedtoyourborrowerasshowninSectionD.

Anyfundsreceivedbyanyotherpartymustreflectonaseparatelineinthe200seriesdesignatingthesourceoffunds.

Borrowerproceedsfromarefinance,ifany,areonlybepaidinstrictcompliancewiththewrittenclosinginstructionsprovidedbythefundinglender.Pre‐closingconsentisobtainedfromthelenderonanyrequesttopayadditionalparties.Ifsuchconsentispaid,thechangesarelistedinthe1300sectionoftheHUD‐1.Wedonotrelyonapprovalofthemortgagebroker.Additionally,thefunder’sapprovaloftheHUD‐1orclosingstatementisnotsufficient.



DisbursementofSellerProceeds:

SellerproceedsarenotassignedorotherwiseandaredisbursedtoSeller,asdefinedintheLoanClosinginstructionsandHUD‐1.WheretheSellerrequeststheproceedstobepaidotherwise,pre‐closingclearanceisobtainedbyus.

Multipledisbursementstothesamepayeearenotacceptableespeciallywhenaskedtodisburseinincrementsof$10,000orlessasthismaybeperceivedasparticipationinamoneylaunderingscheme.

Ifalenderdisapprovesofanyrequesteddisbursementthesellerorborrower,asappropriate,isnotifiedinwriting.

WheredirectedorallowedbyLender,wewillacceptwritteninstructions: Depositproceedsdirectlyintoabankaccountonbehalfoftheprincipals. Cutseparatechecksorsendawireinthenameofeachindividualselleror

borrower.

MortgagePayoffs:

PayoffStatementsshouldonlybeaccepteddirectlyfromthelenderbeingpaidoff–NEVERfromanindividualwhodeliversittoyou(itcouldhavebeenaltered).

Mustbeinwritingandshouldreferenceloannumberandpropertyaddressinadditiontoborrower’sname.

Watchhomeequitylinesofcreditandobtainasigned‘closingletter’fromtheborrowertothelenderrequestingthatthecreditlinebeclosed.

Putsufficientdetailonthepayoffchecktoidentifythepropertyandborrower. Ifpropertyisinforeclosure,makecertainyouhaveaccountedforanyattorney’sfeesand

othercourtcosts. Sellersarenevertodelivertheirownpayoffcheck.Payoffchecksmustbedeliveredina

mannerinwhichthedateandtimeofreceiptofthecheckcanbedocumented.

EscrowedFundsDisbursement:

Approvers’and/orchecksigners’responsibilitiesonexternaldisbursementsaretoensurethepaymentamountsaresupported,propervendorsarepaid,anddisbursementshavebeenproperlyauthorizedbytheescrowofficer.

Acheckthathasbeenissued,processedintheaccountingrecords,butsubsequentlylost,stolenorreturnedtotheCompanyare“voided”.

o Iftheoriginalcheckhasbeenreturned,markit“Void”,removethesignatureportionofthecheckandforwardittoaccountingforadjustmenttotheappropriaterecords.Voidedchecks,iffound,mustberetained.

o Ifthecheckhasbeenlostorstolen,firstdetermineifthecheckhasclearedthebank.



o Theaccountingdepartmentshouldcontactthebanktoverifythatthecheckhasnotclearedthebank.

o Ifithasnotcleared,thebankshouldbeadvisedtoplaceastoppaymentonthecheckandconfirmationnumbershouldbereceived.

o Nocheckmaybereissueduntilithasbeendeterminedthatithasnotclearedthebankandyouhavereceivedauthorizationfromtheaccountingdepartment.

o Iftheoriginalcheckissubsequentlyfound,itshouldbeforwardedtotheaccountingdepartmentwithanoteacrossthefaceoftheoriginalcheckstatingthatastoppaymentwasissuedonthischeckandindicatingthedateofthestoppayment.

Wiretransferauthorityistobecentralizedwithinalimitednumberofmanagement,accountingoradministrationemployees.

CustomersaretocommunicateallwiretransferrequestsinwritingandeachSettlementAgentisthentocommunicatethewiretransferinformationtooneoftheauthorizedemployeesinwritingorbyfaxandconfirmedinwriting.

InallcasesofinitiationofawiretransferbyaSettlementAgent,areasonablesecurityproceduremustbeusedtovalidatethetransfer.

Onceacheckhasbeentendereditisnotallowedtobewireduntilatleast24hourshaspassedanditcanbeconfirmedthatthecheckwasnotcashed.

PricingProcedures

Onaconsistentbasis,the“RatesandRemittances”languageintheIssuingAgencyContract

isreviewedwithallpersonnelresponsibleforrateandsplitcalculations,policyissuance

andpolicyreporting.Whenratechangebulletinsareissued,thereviewsareimmediateinordertoinsurethatproperratechangesaremade.

Whenratechangebulletinsareissued,SoftProCorporation(escrowsoftware)iscontacted

toconfirmthattheyhavebeennotifiedbytheunderwriterandwillhavetheproperupdatesmadetothesoftware.

Oneachtitleorder,onlinecalculatorsareusedtoensurecorrectfeesarebeingchargedfor

policypremiums,statespecificfees,andendorsements(copyofratesheetisineachfile).

Recordingprocedure

Documentsaresubmittedorshippedforrecordingtotheproperrecordingofficewithin3

businessdaysofSettlement.

Whereavailable,electronicrecordingisused.

Shipmentsofdocumentsforrecordingaretrackedandalogiskept.

Weverifythatrecordingactuallytookplaceandmaintainrecordinginformationforeach

documentineachfile,aswellasaseparatelogofallrecordings.



Whennoticeisreceivedthatadocumenthasbeenrejected,thedocumentistreatedasa‘newclosing’andalleffortismadetoresolvetheproblemandsubmitforre‐recordingwithintwodays.Ifasolutionisnotforthcoming,weconsultwithourunderwriteranddevelopastrategytomitigateimmediately.

TitlePolicyProductionandFileMaintenance

TitleinsurancesearchesandexamswillbemadewithdueregardtorecognizedtitleinsuranceunderwritingpracticesandinaccordancewithourUnderwriter'sbulletins,manualsandotherinstructions,includinganystateorfederalapplicablerequirements.

o EachpolicyissuedonbehalfofyourUnderwriterisissueduponadeterminationofinsurabilityoftitlewhichincludes,butmaynotbelimitedto:

(i) asearchfromearliestpublicrecordsorinaccordancewithapplicablestatelawand/orUnderwriter'swritteninstructions;and

(ii)anexaminationofalldocumentsaffectingtitletothesubjectproperty. Each title order or transaction is maintained and contains all documents upon which we

reliedtomakeourdeterminationofinsurability,including,butnotlimitedto:affidavits,maps,lien waivers, surveys, title reports, searches, examinations, together with a copy of eachcommitment,policy,endorsementandothertitleassuranceissued.

Wealsomaintaininourclosingfileforeachtransactionwithoutlimitation;closingstatements,disbursementworksheets,copiesofallchecksdisbursedandreceipted,depositslips,escrowagreementsandanyotherinstrumentsordocumentsexecutedorcreatedatClosing.Wekeepthephysicalfileaswellasacopyinourelectronicfilingsystemthatallowstrackingandfuturereview.

CopiesofclosingfilesarepreservedinaccordancewithapplicableStatedocumentretentionrequirements(10years),orinthecaseofalegalholdorder,inaccordancewithinstructionsofourUnderwriter(s).

Intheeventthatwedestroyordisseminatethefilesforanyreason,itisdonesosecurelyandinsuchawaythatweshallmaintainandprotectanyconfidential/privateinformationcontainedinsuchfilesinaccordancewithapplicableStateandFederallaw.

WemaintainapolicyregisterinaformapprovedbyourUnderwritershowingthedispositionofallpoliciesandotherpre‐numberedformsfurnished.Differencesareproperlyidentifiedasvoidedpoliciesorotherwise.

Whenclaimsarefiledandtheunderwriterrequestsacopyofthefileinquestion,orwhenfilesarerequestedforotherreasons,wepromptlysearchforandprovidetherequesteddocumentation.Theseinclude

o alldocumentsreceivedbyAgentinwhichUnderwriterisapartytoanyadministrativeand/orjudicialproceedings;

o allwrittencomplaintsorinquiriesmadetoanyregulatoryagencyregardingtransactionsinvolvingtitleinsurancepolicies,endorsements,commitmentsorothertitleassurancesofaparticularUnderwriter;



o anyinformationallegingaclaiminvolvingapolicy,commitment,endorsementorothertitleassuranceofanUnderwriteroratransactionforwhichanUnderwritermaybeliable;and

o Alloriginaldocumentationandworkpapersassociatedwiththetransactionorconductgivingrisetoanyexamination,claimorcomplaint.

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