Orange Coast Title Co. (OCT) and its family of title companies, a provider of title and escrow services nationally based in Santa Ana, Calif., completed its SOC 2 Type II Independent Service Auditor’s Report (SSAE 16) examination and was Best Practice certified in July. This includes all 26 of the companies which comprise OCT’s family of companies.
The Consumer Financial Protection Bureau (CFPB) released a set of rules and regulations with which lending institutions must comply. These new procedures are mandatory and intended to protect, among other things, the consumer’s NPPI (Non-Public Personal Information). Part of the lending institutions’ criteria to be compliant is to ensure that all of their vendors are compliant and have the strictest regulations in place. The American Land Title Association (ALTA) has developed a list of seven Best Practices for title companies; each of those pillars has numerous protocols.
By implementing the policies and guidelines of the Best Practices, title companies can demonstrate that they have implemented the controls to mitigate risks to protect consumers and protect intuitions from liability.
OCT completed its initial SSAE 16 SOC 1 Type 1 and II audit and reports in 2014. It was the period leading up to that audit and report in which OCT put into practice the safeguards and processes necessary to provide lending institutions the assurances necessary to comply with CFPB rules and regulations. “We are pleased that our SSAE 16 reports have shown that we have suitably designed and maintained our systems and that we are operating with effective controls,” OCT President Rich Macaluso said. “As part of our mission to the real estate lending industry and commitment to our clients; we strive to deliver the best product possible. By going through such an extensive six-month auditing process twice, we are now able to provide lenders and other financial institutions a report that addresses their concerns in a format which is most familiar to them. We intend to engage an outside independent audit firm annually to hold ourselves accountable to compliance and to provide the real estate lending industry with the assurances this report gives. ”
“Lending institutions, warehouse providers, secondary investors and FDIC banks are looking for security from their critical third-party vendors and the SSAE 16 has become the standard that many in the industry are requiring from their title insurance providers,” OCT Executive Vice President/General Counsel & RESPA, Compliance & Regulatory Attorney Bill Burding said. “In evaluating which title company to use in a given transaction, it is becoming critical to choose a company that has achieved a SSAE 16 certification from an independent auditor to make sure that the consumer is protected. Our SOC I and SOC II reports describe our controls, our auditors testing of our controls and our auditor’s opinion on the fairness of our description, suitability of the design and operating effectiveness of our controls.”