Sunday, September 30, 2012

Ask your title insurance agent how they guard your private data.

This is one of those things that really bugs me about the title insurance business.  Beyond the broad federal privacy laws there are no rules that govern how we guard YOUR most private financial data.  There are no guidelines for storage or disposal.  Doesn't that bug you, too, as a consumer?

Add to that - even operating with privacy laws, your information may go to parties who are not subject to licensure and may have been subjected to little or no vetting.   That's even more disconcerting to me.

Consider this.  When you apply for a mortgage loan, you provide your full employment information, all or most of your banking accounts and your outstanding debts.  All of this information, along with your residence, marital status and social security number is typed onto a form 1003, the uniform residential loan application.

This 1003 form and often attached exhibits such as tax returns or bank or credit statements are given to the title insurance agent as part of the closing documents, usually so that you can sign these documents at the closing.

If the title insurance agents uses its own employees to conduct the closing, these documents at least do not leave their care.  If however, the title insurance agent uses notary signing agents who are not employees, these documents containing your full financial data move into the care of yet another entity who is in most states not licensed.

Even when dealing directly with one of the super large title underwriters you may experience your data moving to such an unlicensed entity or even overseas - off shore - for processing.

Now that I've explained how your most private personal financial information can move about, I'd like to tell you how our office, The Closing Specialists, handles this information.

1.  We only use on staff, fully trained and well experienced, closers.
2.  We hire a secure shredding service to routinely pick up trash that contains sensitive information.  We have shredding disposal boxes on every floor excepts the main floor which is open to the public so that employees can easily dispose of document copies or faxes which do no move into your permanent file.
3.  Your full permanent file is retained in our on-site storage until it is scanned and then it is also given to the secure shredding service.
4.  Your scanned documents may only be accessed by an employee.  Requests coming in from outside of our office are screened by a manager.  Requests must be in writing and the party making the request must meet privacy law requirements for access before a document is released.
5.  Off site backups of this data are stored in a bank safe deposit box.
6.  When we have a need for a hardware repair or upgrade to the system in which this data is stored, the work takes place on site and the old equipment is retained by us and stored in a locked room which can only be accessed by management.

We take our role as custodian and guardian of your personal data very seriously.  Frankly, I don't even think we ought to have access to this information as it isn't really a part of the title insurance transaction however, for now mortgage lenders don't see this as a security risk and so since we receive the data and we recognize ourselves that it IS a security risk, we guard your data.

So, when you are deciding between title insurance agents, think about how you guard YOUR personal information and then realize that your choice of title insurance agent is a part of that security plan.

Friday, September 21, 2012

on the evolution of our industry

I am the branch manager of a title insurance office. I've enjoyed your blog for the last year or so and I am wondering what your thoughts are on the CFPB proposed changes to the Truth in Lending and RESPA act disclosures and their effect on our industry. I understand and applaud the goal of protecting consumers but I am concerned that these proposed changes will hurt small title offices. 
Your thoughts?

Hi, T:

Thanks for your kind words about the blog. I take a long view of this business. I've been in and around it since 1973.  It's always been in a state of constant change.  Interestingly, though, the community of people just keep playing musical chairs and manage to find places in the ever changing evolution.  So, I don't worry too much about the possibility that small agencies such as mine might be effected.  We've always tried to roll with the punches, stay honest, and serve the needs of consumers, lenders, and real estate agents.  Somehow, doing that we've been able to find niches in large and small markets that have allowed us to survive.

I have already discussed with my staff that it is possible that the evolution of the industry might eliminate or severely change the role of a title agency.  If we can't find a way to get rid ourselves of the lousy agents and maintain professional integrity, then like mortgage brokers before us, the business model may be considered too risky and the good guys will be tossed out with the bad.  I have assured my staff that they ought not to worry because no matter what, the work of moving real estate will march on.  It is a necessary function and there will always be a place for well trained people who know how it works.  We'll just move into some other position.  Some of us will use our skills to create new businesses that function within a new workplace model.

We need not to be buggy whip makers trying to protect the way we make our living.  We can evolve.  Don't be afraid.  ;)