DS News

58 With regulatory momentum picking up steam and with hot-button issues such as information security and privacy concerns remaining top of mind, some parties involved in the mortgage default servicing industry have taken proactive measures to address existing procedural inefficiencies and potential vulnerabilities. Lenders have begun to think seriously about the right way to implement formal standards and certification processes for title insurance agencies, and attorneys and title agencies have taken steps to engage in and codify best practices in anticipation of a more formal federal regulatory agenda in the not-too-distant future. e American Land Title Association (ALTA) is responsible for one of the most significant new developments on that front, recently rolling out a set of approved best practices for title agencies, which were created to provide lenders with additional information about their title vendors. According to ALTA, these best practices are intended to serve as a set of guidelines. More specific, they serve as a formal reference/resource that member title agencies can refer to in order to ensure the policies and procedures they follow are providing sufficient protection to both lenders and consumers, while ensuring an efficient and fully compliant real estate closing. One implication of the best practices in particular directly impacts REO properties: establishing title curative measures. More often than not, REO properties do not have clear title, and the process for obtaining clear title can be time consuming if the proper documentation is not provided. A difference in the tax assessments, disputes between interested parties, and unreleased liens are just a few examples of issues that can cloud title. Such title issues not only complicate closings, but also extend the timeline in closing the REO sale. ere also tend to be a lot of hand-offs when it comes to REO properties from the foreclosing attorney, eviction attorney, asset management companies, real estate agents, and REO attorneys to the title company. Reducing these hand-offs will reduce the risk of noncompliance and inefficiencies. In that context, the new ALTA best practices are particularly important. Appreciating the scale and scope of these new ALTA guidelines— and understanding how they might impact REO properties in particular—is an important prerequisite to developing corresponding REO standards and practices that will ensure faster closings and consistent compliance. ALTA's best practices set the guidelines for REO properties I N D U S T R Y I N S I G H T / K E N N E T H K U R E L A N D H E A T H E R M O L D O V A N

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