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Webinar Recap: Industry Best Practices for Title Software Users

BestPractices-GearsMany title agencies are still using the same methods instituted twenty or thirty years ago.  Inconvenient and time-consuming tasks bog down employees whose talents could be better directed elsewhere.  Managing paper documents, keeping track of many individual orders, phone & fax communications with clients and vendors: these are all traditional functions that impede on money making tasks.  One way to solve this issue is by utilizing powerful title management software.  So we brought in the title software experts from Adeptive software, makers of ResWare, Bryan Buus and Krista Myers for their presentation “Industry Best Practices for Title Software Users”.

So what were their suggestions to title agents?

Rules & Roles

The segregation of all major functions, both internally and externally, are crucial to protecting not only yourself, but your clients’ NPI.  With a stringent segregation of duties set up via a system of vaults, it’s less likely that processes will be missed as well as lets more eyes scan the documents for errors.  Since everyone’s roles are secured and clearly defined, it’s also less likely a rogue employee can tamper with any escrow funds.  If a user attempts to access data they are not allowed to see, error messages should be put into place.  Along with your internal resources having their duties closely defined, external vendors should also have limited access to client information.  For example, custom logins to your website for each type of vendor easily allows you to keep track of who has what data. Also, ResWare merge fields only deliver the last 4 digits of a SSN or pin number, so you can be virtually guaranteed that the crucial NPI is protected.  Finally, making sure all of your documents are aligned with CFPB regulations from the beginning protects not only your clients’ NPI but you from any potential auditing as well.  You can set up CFPB regulation inputs on all incoming files so this can be accomplished without missing a beat!

Escrow Fraud Prevention

As Ben Franklin once stated, “An ounce of prevention is worth a pound of cure.” And preventing escrow funds from being stolen should be a key safety priority.  According to Adeptive, the most important way to protect escrow funds is to run three-way reconciliations daily.  Daily reconciliations can be done two different ways: they can be balanced and closed daily or they can be balanced daily and closed monthly.  However daily reconciliations are done, all accounts holding escrow funds should utilize a three-way reconciliation.  To help out with this task further, running and reviewing trial balance reports frequently is, while not the most fun task out there, vital for escrow protection as well.

Escrow Fraud Cure

Let’s say you weren’t following the guidelines issued above (shame on you!) and now either the incorrect amount of money went out, or it went out to the wrong person, what can you do?  For starters, match the stop payment process at the bank to the stop payment process in the software.  Stop payments should be placed on checks when they’re ordered at the bank, but checks should not be reissued until the bank has confirmed that the stop payment can be honored.  When the bank has confirmed the stop payment order, the check can be reissued.  This is done to protect you from duplicate payments as well as initial erroneous payments.  Also restrict disbursement until necessary curative items are cleared.  If curative items are not cleared, funds should not be disbursed.  Finally hold remittance and recording funds in a separate account than settlement funds.  Funds to be held to pay remittances or recording fees should be maintained separately from escrow funds for closings.

If you want to check out the full presentation, click here or, or a PDF of the presentation, click here.

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