| Articles and Resources Protect Yourself - Safeguards for You and Your Company by Teresa Williams As the real estate market tightens up the ways for title companies and title agents to generate business is becoming increasingly harder and some companies are trying new and creative ways to bring the business in the door. Be sure that you are in compliance with RESPA during all of your marketing endeavors. We would like to provide some tips and safeguards so that you are not the next article in the local newspaper or news broadcast. Prepare each transaction according to the loan instructions. Any changes, including seller/buyer credits, seller take backs and mortgage broker credits should be approved by the lender in writing. Remember that the HUD-1 is designed to be an accurate picture of the closing transaction. Only issues dealing with conveying clear title and meeting the lender’s underwriting requirements and instructions should be on the settlement sheet. You are not a bill paying service for the seller (unless there is a judgment/lien that impacts the title). Organize the work flow in your office so that everyone is cross trained as to each part of the processing and post closing of a file. This will give you the ability to have each employee use their strengths in making your company invaluable to your clients. There should only be one settlement sheet. There is no reason why you should have more then one settlement sheet showing different figures. The one and only HUD-1 should be final and should reflect how the transaction was disbursed. Effectively manage your office, staff and the flow of business. Keep in mind that you are involved in a business that greatly affects the economy. Caution each employee to keep business as business. An employee who develops a relationship with clients is more likely to be swayed to do something that is not on the up and up. Take time to prepare the transaction, review the contract of sale and review the loan instructions. You need to be sure that you have good funds prior to disbursing. Verify all deposits and wire. Keep in constant contact with your bank as to their procedures on posting and reversals. Only make changes to a transaction with written documentation. That documentation can be in the way of a contract addendum or a lenders instruction. Make sure the lender is aware of any new addendums that you may be presented with at the table. Use a checks and balance system in your office. Set procedures in place that a transaction is double checked by a second person prior to closing. Read and keep all of your underwriter’s alerts and bulletins. Circulate these alerts and bulletins around so your staff is aware of issues that could impact transactions in the process as well as all future transactions. Short cuts to closing a transaction should not be taken. Never close a transaction until all elements are in place and each outstanding issue has been resolved. Each transaction should be treated with strict confidence. Never discuss a specific transaction with outside parties. Look closely at a new client who walks into your office with a large, sudden, influx of business. Ask the right questions if this client is suddenly changing title companies. Finish each file until all issues have been resolved; closing has taken place, documents are recorded, policies are completed, releases have been recorded and the file balances to zero. The most useful information that we can provide to you is that you use good judgment in closing a transaction. Rely on your gut feelings and if a transaction does not feel right then contact your underwriter immediately. What are your thoughts about this? Published Articles by Teresa Williams |