Best Practices Summary

In response to recent mortgage reform laws and mortgage industry focus on consumer protection, in 2013, the American Land Title Association (“ALTA”) created “Best Practices” as a voluntary tool to help its member title insurance and settlement companies demonstrate the safeguards that they have in place to ensure that closing activities meet all applicable laws and regulations.

Although ALTA did not make implementation of Best Practices mandatory, we here at FTE jumped on board, because we always strive to stay ahead of industry changes. Our Best Practices policies and procedures went into effect in November 2013.

First and foremost, FTE’s Best Practices highlight our efforts to protect client and customer funds and non-public personal information (“NPI”). We have a number of policies and procedures in place to make sure that your funds and NPI are safe with us. Our Best Practices also detail the many other policies and procedures that we have to ensure a positive and compliant real estate settlement experience for all those involved in the process, including homebuyers, lenders, and real estate agents.

There are seven sections to our Best Practices. The following is a summary of these sections. We welcome any feedback.

Section 1 – Licensing
Both FTE and its employees maintain the required licenses and registrations for operating as a settlement company and conducting settlements for DC, Maryland, and Virginia properties.

Section 2 – Escrow/Trust Accounting
FTE maintains client funds in separate escrow accounts and has controls in place to ensure that these funds are safeguarded. Only authorized employees who have undergone background checks have access to these funds. On a monthly basis, an independent third party conducts a “three way” reconciliation of FTE escrow account records. FTE provides ongoing training to its employees in the management of escrow funds and escrow accounting.

Section 3 – Privacy and Information Security
FTE recognizes the importance of protecting NPI and has a formal Information Security and Privacy Policy and Program. On a regular basis, FTE reviews its operations to identify any risks to NPI and takes appropriate action based on that review. FTE provides regular training to employees regarding information security. FTE protects both the physical and the network security of NPI, for example, by having a “Clean Desk Policy,” requiring shredding of paper NPI, password protecting access to NPI systems, and using encrypted e-mails to send NPI. FTE has plans in place for notification in the unlikely case of the release of NPI and for business continuity in the case of a disaster.

Section 4 – Document Recordation / Title & Settlement Pricing
FTE utilizes E*recording wherever possible so that documents are submitted for recordation within 3 to 4 hours of completion of a closing transaction. Where E*recording is not possible, documents are submitted for recording no later than 2 business days after settlement. FTE tracks and maintains records of recordings. FTE has procedures in place to ensure that the correct title insurance rates are charged and all appropriate discounts are given. FTE trains its employees on recording and pricing policies.

Section 5 – Title Policy Production / Premium Remittance
FTE delivers owners’ title insurance policies to homeowners on the same day of closing and delivers lenders’ policies within 3 business days of closing. FTE reports policies and delivers policy premiums to its underwriters in accordance with the applicable requirements.

Section 6 – Professional Liability Insurance and Fidelity Coverage
FTE maintains the professional liability insurance and fidelity coverages of types and in amounts meeting or exceeding all legal and underwriting requirements. Such coverages are periodically evaluated, and any necessary adjustments are made.

Section 7 – Consumer Complaints
FTE has a written policy for accepting and administering consumer complaints, with one point of contact for all complaints. FTE maintains a log of complaints and their resolution and analyzes the complaints to determine whether changes in operations or procedures are warranted. FTE trains its employees on handling consumer complaints.