38 Hoosier Banker October 2014 o it on time and do it right!” may sound like a grade school lesson, but the American Land Title Association (ALTA) Best Practice No. 4 incorporates this standard into everyday real estate settlement policies and procedures at the office. Additionally this practice prioritizes compliance with these standards and staff training. ALTA Best Practice No. 4: Adopt standard real estate settlement procedures and policies that help ensure compliance with federal and state consumer financial laws, as applicable to the settlement process. Purpose: Adopting appropriate policies and conducting ongoing employee training helps ensure the company can meet state, federal and contractual obligations governing the settlement. Adopting compliant written procedures is half the battle. The ALTA best practices give the opportunity to write the rules regarding the real estate settlement procedure implemented in your office, as long as those rules comply with the law and the time frames set forth in the ALTA best practices. ALTA acknowledges that you are the expert in real estate settlement procedures. The overriding theme remains, “Do it on time and do it right.” Do it on time. Review your legal, contractual and ethical requirements and to incorporate those standards into your written real estate settlement procedures. The next step is to make sure that the timing requirements meet the standard of ALTA Best Practice No. 4. All documents are required to be recorded in a particular transaction be presented for recording within two days of the transaction. If, however, you are not the party that performed the closing for the transaction and are otherwise tasked with the obligation of recording, you must record it within two days of your receipt of the documents. You may set other time frames in your policies and procedures (except one to be featured in next month’s article on ALTA Best Practice No. 5). Granted, many of these time frames are based upon the expectations of third parties such as clients, customers, lenders and anyone else who is applying timing pressure to the transaction. One important consideration is to include time frames for which you are willing to be held accountable. Do it right. Make sure that everyone is charged the correct amounts on the settlement statement. Put into place those procedures and protections that make certain the appropriate amounts are charged and collected for everything from title premiums to your fees in the transaction. You will be tasked with compensating for a shortage, regardless of whether you receive remuneration from the benefactor of your mistake or even find them. Written policies. You have policies and procedures in place that address items such as “doing it on time and doing it right.” In many instances, however, these policies and procedures are not written down. They are second ALTA Best Practice No. 4: Do It on Time, and Do It Right About the Author Jonathan Biggs is vice president, director of risk management and education for Investors Title Insurance Company. He oversees risk management functions related to the company’s approved provider system. Prior to joining Investors Title in 2012, Biggs was partner at a firm in Durham, North Carolina, where he practiced residential and commercial real estate law for more than 20 years. He earned a bachelor’s degree from Duke University and a JD from Wake Forest University School of Law. Investors Title Insurance Company is an associate member of the Indiana Bankers Association and an IBA Preferred Service Provider. DIRECTORS / SENIOR MANAGEMENT The American Land Title Association (ALTA), a title insurance and settlement company, gives guidance to help ensure the protection of consumers during real estate transactions. ALTA offers seven standards — known as ALTA Best Practices — by which each bank should measure its service providers. In recent months, Hoosier Banker has been featuring a series of articles by Investors Title Insurance Company outlining the seven best practices. Topics covered to date are: Licensing; Escrow Accounts: Follow the Money; and Information Security – Keeping Secrets From the Backyard to the Boardroom.
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