27 Hoosier Banker December 2014 Continued on page 28. DIRECTORS / SENIOR MANAGEMENT In the last installment of this article series, “ALTA Best Practice No. 4: Do It On Time, and Do It Right,” we applied the age-old adage of “on time and right” to the written policies and procedures that govern a real estate closing. ALTA Best Practice No. 5 follows the same principle, applying the principle to another aspect of the real estate settlement process: post-closing. Specifically ALTA Best Practice No. 5 turns our focus to the timely production of the title policy. Post-closing procedures often do not get the attention that they deserve, because parties to the transaction tend to be less demanding once the loan closes. Lenders, however, are currently tracking our post-closing performance and would assert that they are not through with a file until they have the final title policy. They will hold us accountable for not meeting their goals, because they are unable to fulfill them without our active participation. Baseball great Yogi Berra famously quipped, “It ain’t over, ’til it’s over.” Different arguments can be made about what constitutes the last step in the real estate settlement procedure, but what is not in dispute is that the procedure does not end at the closing table or at the registrar’s office. Some would say that the process ends with the production of the title insurance policy; others conclude that it ends with the reconciliation of the trust account. Regardless, there is a specific set of post-closing procedures that have to be completed before a file is truly complete. Post-closing is a necessary component of every real estate transaction, and it will not occur without driving it to completion. Furthermore our written real estate settlement procedures should support our striving for a completion date that is in line with the contractual expectations of the lender – once again, “Do it on time, and do it right.” ALTA Best Practice No. 5 reinforces that the timely production and payment for the title insurance policy is a part of the lender’s and the consumer’s collective expectations. Our internal office policies and procedures should put a priority on and an expectation to meet this performance standard. ALTA Best Practice No. 5: Adopt and maintain written procedures related to title policy production, delivery, reporting and premium remittance. Purpose: Adopting appropriate procedures for the production, delivery and remittance of title insurance policies helps ensure title companies can meet their legal and contractual obligations. This standard should be included in our compliant written procedures for the real estate settlement process. As noted throughout this article series, the ALTA Best Practices give the opportunity to write the rules regarding real estate settlement procedures, as long as they comply with the law and the time frames set forth in the ALTA Best Practices. Certainly there are plenty of rules, laws, and expectations that will continue to shape our written real estate settlement policies and procedures. These rules also must be incorporated in those written procedures; however, the overriding emphasis remains on timely and accurate completion of all tasks in the real estate settlement process. 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; Information Security – Keeping Secrets From the Backyard to the Boardroom; and 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. ALTA Best Practice No. 5: ‘It Ain’t Over, ’Til It’s Over’
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