For the first time in over two years, I was recently asked by a loan broker whether or not I was vetted through Secure Settlements, a third party vetting agency who claims to be able to properly vet a title agent to insure to the lender that they (the title agent) are compliant with best practices, and are trustworthy by offering a comprehensive risk management report of third party services providers, including title agents, appraisers, accountants, attorneys, document preparation firms, etc.
In 2012 this same company was very actively engaged in trying to get all lenders to use their services and many, if not most, lenders began to think that perhaps this third party service was needed to protect the consumer.
As a result of the tireless efforts of the American Land Title Associaton and the various state Title Associations it was determined that in fact the underwriters all do a phenomenal job of vetting their title agents and agencies with annual audits, monthy reports, monthly on site visits, etc. , and so, when this e-mail came to me inquiring as to whether or not I had been 'vetted' by this third party vendor, I replied as follows:
No, it is not something I have been required to do despite the best efforts of Secured Settlements to capture business from title agents after the CFPB issued a statement some years ago regarding oversight of title agents and others who have access to consumer information, which statement the CFPB has since clarified.
A couple of years ago this was an issue but I thought vetting through Secure Settlements or any other 3rd party vetting service was a thing of the past. I was very actively involved in this issue on behalf of MLTA in 2012 and am familiar with the way in which Secure Settlements attempts to capture business by promising referrals, etc if a vendor pays to be vetted. This practice has been suggested by some to be a violation of RESPA Section 8 (kickbacks and referrals) see link here http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/ramh/res/respamor#HT
None of the major lenders, including Wells Fargo, B of A etc, require vetting through this or any other 3rd party. They rely instead on the underwriters, all of whom run credit checks, background checks,licensing checks, bonding requirements etc for all of their approved agents. The closing protection letters used by all underwriters insure the lender against such things as fraud, failure to comply with instruction, etc. The ALTA, (American Land Title Association) the MLTA (Maryland Land Title Association) and the NAILTA(National Association of Independent Land Title Agents) as well as other State Land Title Associations worked tirelessly to address this issue of 3rd party for profit agencies providing a redundant process to do exactly what underwriters are already doing. The CMC (Consumer Mortgage Coalition) has recently joined forces with NAILTA to further address this matter and in addition ALTA has implemented and is enforcing its Best Practices All title agents must be compliant in order to retain their appointments with their underwriters.
Further, these 3rd party vetting agencies are:
NOT able to measure competency or skill
NOT a governmental agency or endorsed by the government
NOT a licensing authority
NOT an independent licensing agency
NOT a State authorized disciplinary agency
So, the questions for today are:
Have you recently been asked whether or not you had been "vetted" by Secure Settlements or any other third party vendors. And, if so, what was your reply?
If you have been vetted by a third party vetting service, what was your reasoning for paying thier fee and going through their process?
Call me to discuss your position on this issue.
Charlene Perry, CLTP
Key Title, Inc.