The Trusted Adviser
April 2015 | Volume 8 · Number 3

What Lender Vetting Means for Title Agents

Christine Sparks photo

The regulatory landscape for mortgage lenders has changed dramatically since the 2010 mortgage foreclosure “Robosigning” scandal. Lenders have been told by the Consumer Financial Protection Bureau (CFPB) that they are strictly liable for the acts of third-party vendors and have been required to return more than $25 billion dollars to borrowers as the result of a settlement with a number of State Attorneys General.

With the regulators on their backs, and in an effort to avoid similar trouble in the future, lenders are closely monitoring the actions of all service providers, including title insurance underwriters and title insurance agents.

Over the past two years, we have been talking a lot about the American Land Title Association (ALTA) Best Practices. ALTA has been promoting an August 2015 implementation deadline for Best Practices to coincide with the implementation of the new CFPB Integrated Mortgage Disclosures. A few lenders indicate they will require settlement agents to be certified by a third-party as “Best Practices compliant” by August 2015. However, what we hear most often from lenders is that they want two assurances: (1) Non-Public Personal Information (NPI) is secure; and (2) funds are handled appropriately. Some lenders have implemented their own requirements that loosely mirror Best Practices, but are not exactly the same.

ATG has entered into agreements with several lenders that obligate ATG to ensure that practices are in place to protect consumers. Most of these obligations are similar to what is found in the Best Practices Assessment Procedures. ATG has been audited by a major lender, which included a detailed review of ATG’s audit procedures. One focus of the audit was ensuring that ATG and its agents appropriately protect NPI.

ATG continually refines audit procedures to ensure that our title insurance agents are complying with lender expectations, ATG Regulations, and ATG procedures. Our goal is to ensure that our title insurance agents are never prevented from issuing title insurance or conducting a closing because their practices do not conform to lender expectations. ATG is committed to making sure lenders are confident that ATG agents are as secure as any other title insurance agents and that ATG is as secure as any other title underwriter.

Top Concerns of Title Agents

We recognize that some requirements seem burdensome and may even appear unnecessary. We continually evaluate the audit requirements to which we adhere and can assure you that they are consistent with marketplace demands. The following three requirements are understandably the most burdensome for our agents; ATG offers assistance for each one: 

  1. Background Checks | Lenders have made it clear that they will seek title insurance agents and title insurance underwriters who have had background checks performed on employees whose job responsibilities include coming into contact with NPI and handling money. This requirement is not likely to go away. We appreciate that many agents are fortunate to have long-term employees and are offended at the notion of requiring those employees to consent to background checks. We felt the same way when we required background checks of our long-term employees. However, this is now a standard employment practice and the lenders expect it. If you have questions regarding what the background check should cover, or need a provider for background checks, contact ATG LegalServe (type "ATTN Arden Miner" in the Questions/Comments field).

    EDITOR'S NOTE: As of August 20, 2021, ATG LegalServe is no longer an ATG subsidiary and has resumed operations under its previous name, It’s Your Serve (IYS). Any outstanding LegalServe orders are being processed by IYS. Learn more at

  2. Private Business Domain Email | Lenders expect title agents to have private domain email addresses for legitimate security reasons—security that protects you, your clients, and lenders. Private domains are less likely to be targeted by cyber criminals. We have seen instances where lenders have refused to send email communications to email addresses that are not affiliated with a private domain. Additionally, any NPI transmission must be secure. If sending NPI via email, it should be sent encrypted or as a password-protected PDF. For ATG's recommendations, see our March 9, 2015, Procedural Update, Establishing a Business Domain and Email Encryption Service.
  3. Written Policies | Hardly a week goes by where a lender doesn’t request written policies from one of our agents. Exactly what policies the lender requests varies from lender to lender, but if you have the completed Best Practices written policies, you can typically use them to fulfill the lender’s request, even if your policy is not named exactly the same as the lender’s request. Check out our Agent Implementation Tools for checklists and written templates that you can use as a starting point when you are developing your own policies. Amend our written policies as appropriate to reflect your office practices. When our auditors come to your office for your audit, they will review your written policies to ensure they reflect your office practices. Additionally, we will ask you to provide a copy of your written polices so that we can provide them to lenders if we receive any direct requests. See our October 16, 2014 article, When a Lender Asks to Vet ATGfor additional information.

If you need help responding to lenders' requests for information related to approval to act as a settlement agent or title insurance agent, please reach out to us. We have responded to many lender vetting requests and can help you obtain approval from a lender.

We are committed to working with our agents to maintain lender confidence in lawyer title insurance agents and lawyer settlement service providers. Contact us if you have questions about the requirements and procedures. We look forward to working with you to meet marketplace and regulatory demands.

Christine Sparks
ATG Vice President and Managing Attorney, Claims and Audit

[Last update: 4-20-15]

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