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ALTA Best Practices and Compliance Standards
The American Land Title Association (ALTA) represents thousands of title companies across the US and has set guidelines for best practices. Members voluntarily choose to comply, ensuring that buyers, lenders, and real estate agents know they’re dealing with a high-quality and ethical title insurance company that can be trusted with personal information and escrow funds.
Choosing a trustworthy title company to handle your closing is one of the most important decisions you make and finding one that complies with ALTA Best Practices makes sure you’re taken care of. ALTA defines 7 areas of client protection and security, each with its own guidelines. Below you’ll find a brief description of each section, and how it benefits you.
Maintain Current Licenses – Section 1
Employees must maintain the insurance licenses, corporate registrations and other licensing required by their state. They also comply with the ALTA Policy Forms licensing guidelines. This makes sure they are in good standing with the jurisdiction where they operate.
Secure All Escrow Trust Accounts – Section 2
Title companies must have controls for escrow and trust accounts in place, even if the company has to hire an outside firm to help them. Specifically, policies ensure that:
- Escrow and client funds aren’t mingled with the company’s operating fund.
- Three-way reconciliation of escrow accounts happens at least monthly.
- Accounts are checked and reconciled daily.
- The person who has the authority to write checks from the escrow account isn’t the same person who reconciles them.
- Management reviews the reconciliations and the underwriters can look at them.
- Accounts are held in accounts at Federally Insured Financial Institutions.
- All employees handling funds have passed background checks going back 5 years.
- Staff is continually trained on the most current standards for escrow accounting.
This makes sure your escrow funds are safe and secure and only used for expenses and fees related to your account.
Protect Privacy and Information Security Policy – Section 3
Your non-public personal information (NPI) is important to keep private. ALTA standards require companies to protect it by having written procedures to keep your information physically and electronically safe while working on your closing and while storing the records afterward.
NPI security protocols must include:
- Restricted access only to authorized employees who have undergone a background check.
- Prohibition on the use of removable media like flash drives.
- Use of secure methods to transmit your information.
- Network security for collecting and sending your NPI.
- Disposal of any personal information in a secure way, such as shredding it.
- Establishment of a disaster management plan.
- Training employees on how to keep your personal data safe.
- Audits to make sure everything is in compliance.
- A plan to notify you and law enforcement if any of your data is breached.
This makes sure that your personal information is kept private from start to finish, and that if any of it is released you’ll know right away.
Adopt Recording Procedures and Settlement Fee Pricing – Section 4
Title companies providing closing services must have clear and written procedures to make sure they meet all federal, state, and local regulations covering the Settlement.
They promise to:
- Send documents to the county recorder within two business days of the settlement.
- Track the documents to make sure they arrive.
- Respond promptly to recording rejections and addressing issues to prevent delays.
- Verify that the documents are recorded properly and keep records of it.
They also have to make sure clients are paying the right price for their title insurance. They must make sure the correct fees and premiums are being charged and that any applicable discounts have been included. If you did overpay, they have to give you a refund.
Finally, section 4 covers how title companies have to make sure the third-parties they involve in the closing process, like public notaries, are qualified, have a current license, and have the required insurance and bonds to cover their services.
This makes sure your title is recorded quickly, that you don’t pay more than you have to for title insurance, and that the title company only uses certified professionals to assist in the settlement process.
Maintain Title Insurance Policy Production and Premium Remittance – Section 5
Title insurance is covered by its own legal requirements, and ALTA best practices require written procedures for the production and delivery of title insurance policies as well as sending the premiums to the underwriters.
To conform to ALTA standards, a title insurance policy must:
- Be issued and delivered to the customer within 30 days of the settlement.
- Be reported to the underwriter no more than 45 days after settlement.
- The premiums must be remitted to the underwriter as required by law.
This makes sure that your title insurance policy is in place and that you have all of the details of your coverage quickly after closing.
Secure Professional Liability Insurance – Section 6
Title companies are providing a professional service, and having appropriate professional liability coverage that includes errors and omissions is essential. This makes sure they have the financial resources to back up the services they offer.
Resolve Consumer Complaints – Section 7
This section of the best practices requires companies to have a process to address consumer complaints and:
- Have a standard form to connect a complaint to a specific transaction.
- Appoint one person as the point of contact for complaints.
- Set procedures to make the right staff members aware of complaints.
- Keep a log of complaints and how they are being resolved.
This makes sure that if you have a complaint, you’ll be heard and your problem addressed.
At ATG Title we comply with all of ALTA Best Practices so you know you’re receiving the best service by qualified professionals every step of the way. Our staff receives ongoing training and we review our procedures regularly to make sure we are constantly improving. If you’re looking for a trustworthy title insurance company, contact us at 703-934-2100 or firstname.lastname@example.org and let’s talk about how we can help you today.