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60 BEST PRACTICES Formally issued in July 2013, the ALTA best practices list includes seven core principles: 1. Establish and maintain all current government licenses as required to conduct your business 2. Adopt and maintain appropriate accounting procedures and controls that allow for effective daily reconciliation of all escrow trust accounts 3. Adopt and maintain privacy and information security policies and controls that assure the protection of all non-public personal information in your possession 4. Adopt standard internal policies and procedures that assure all settlement documents are recorded as required in a timely fashion and that the correct premiums are charged for title insurance policies issued 5. Adopt procedures that guarantee the prompt issuance (production, delivery, and reporting) of all title insurance policies you are obligated to provide 6. Obtain sufficient professional liability insurance and fidelity coverage 7. Adopt and maintain written procedures for resolving consumer complaints Upon initial review, very little about these guidelines seems particularly surprising. Most of these practices have been adopted or followed by responsible title agencies for some time now. e greatest benefit of the ALTA guidelines stems not so much from their novelty, but from their consistency. Lenders and vendors alike will benefit from the clarity and specificity of a delineated set of best practices. And at a time when there is so much turbulence and uncertainty with respect to evolving legislative, procedural, and technical standards, a formalized set of thoughtful best practices can help lay the groundwork for any regulatory framework that emerges in the future. While there are bound to be obstacles and complications ahead, points two and three present particular technical and/or procedural challenges for some title agencies, and these seven ideals together go a long way toward reducing or eliminating some of the potential liabilities and inefficiencies in the default processing chain. While these best practices apply to all title professionals, the implications—with respect to REO properties—are especially significant and suggestive. e third standard in particular, which addresses information security and the protection of non-public information, suggests some REO- specific strategies and practices that lenders should be aware of and attorneys and REO specialists should be working hard to make a similar standard part of their operational approach. REO IMPLICATIONS Among the ALTA best practices, perhaps one of the most important is the item emphasizing the importance of protecting the privacy of non-public information and urging the adoption of rigorous information security policies and controls. While some of those policies and protections involve robust and secure technical architecture, by far the biggest piece of the information security puzzle is procedural in nature. With that in mind, it becomes clear the best way to limit the exposure of private information is to control how—and how often—that information is transmitted from one vendor to the next, as limiting hand-offs of each file between vendors is critical. In cases where an attorney has an existing professional relationship with a trusted and experienced title agency, file exposure can be controlled, security can be optimized, delays can be minimized, and efficiencies can be realized. EFFICIENCY AND CONSISTENCY When one integrated network is processing a file from foreclosure to REO sale, the benefits in terms of consistency—or no loss of compliance rigor from one institution to the next—and efficiency—or no unnecessary delays or confusion surrounding access and permissions—cannot be overstated. Essentially, close coordination between attorney and title professionals can keep everything moving faster and more securely, with fewer redundancies and procedural or communications hiccups. Simply put, files can proceed to closing in a quicker and more efficient manner. SECURITY e benefit of utilizing the same provider for both the foreclosure and the REO process is most evident when it comes to the protection of personal/non-public information. Non-public information commonly found on the documents used to clear title range from loan numbers to social security numbers. Sensitive information abounds in every file. e single best way to protect that information is by limiting exposure and transmission: e fewer times a file changes hands, the better. COMMUNICATION AND CLARITY Because a law firm has likely already handled the research and gathered the relevant background information on each file, that firm has a working familiarity with the file and is well-positioned to address any issues that may arise during the title curative process. If the title agency has any questions about a lien or needs to substantiate any information, the communication between the two vendors can be time-consuming and costly if they are not familiar with the file. is ultimately can result in unnecessary delays. It is important to keep in mind that often issues raised at REO are not actual title issues. Rather, they are just perceived title issues; and without knowledge and familiarity with the file, these perceived issues could significantly impede a closing when clear title could have been provided much sooner. Other essential REO best practices to ensure faster closings and compliance include: KNOWLEDGE, EXPERIENCE, AND EXPERTISE It goes without saying that knowledgeable and experienced attorneys and title agencies are more likely to deliver faster closings and more robust compliance protocols. e ALTA best practices list can serve as a checklist to identify agencies that hold themselves to those standards and practices. UNIFICATION It makes sense to work with organizations that marry the legal and the title work—and do so in an effective and seamless manner. is type of setup will generally minimize inaccuracies, reduce inefficiencies, and eliminate the additional risk that inevitably enters into the equation when more people handle a file. LICENSURE Across the board licensure should be a priority for every title agency. Ensure that not only title examiners are licensed but also managers, sales and marketing staff, and anyone and everyone who works on—or has access to—a file has the knowledge and the formal credentials to perform that work. RELATIONSHIPS Relationships have value, and working with agencies that can leverage strong relationships makes sense. Well-established relationships with assessors, county register of deeds offices, condominium/homeowner associations, and contacts with both the county and with local municipalities can go a long way toward helping solve some of the most common title curative issues that may arise. Tax assessment issues, for example, can be resolved if an agency has a productive relationship with the assessor and is able to work with that assessor to resolve the issue. Privacy, data security, and timely processing are the benefits of applying the ALTA best practices to REO work. is not only gives peace of mind, but also makes every step in the process move faster, more securely, and more efficiently, which makes a measurable and potentially dramatic difference to the bottom line.

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