A recently launched technology vendor is offering risk management services for mortgage lenders to vet and monitor the identity, background and credentials of title agents.
Secure Settlements, based in Parsippany, N.J., developed a proprietary risk analysis software that references national databases and a risk rating system to verify closing companies and individuals in real time and provide a standardized evaluation and reporting platform for mortgage originators.
The company said its technology helps lenders manage the risks associated with mortgage fraud and recently enacted Consumer Financial Protection Bureau standards that
“The Consumer Financial Protection Bureau recently mandated a recommendation that has been in place since 2005, requiring all lenders to take affirmative steps toward evaluating third-party relationships and demonstrating that a policy is in place to protect consumers in regard to how they evaluate partners, such as closing professionals,” Secure Settlements founder Andrew Liput said in a company release, adding that the technology “fills the auditing void left for many banks by the new regulations, empowering them with the information they need to best evaluate potential closing professional partners.”
Many mortgage fraud schemes hinge on settlement agents who execute false documents and divert funds that a lender has provided for a home purchase to fraudsters—like convicted fraudster Cynthia Darlene Strickland, a licensed title agent and owner of Jacksonville, Fla.-based title company Premier Title Group, who in July, was sentenced to 18 months in prison after
The Secure Settlements technology vets title agents before closing, comparing a series of data points to calculate a rating for individual agents and companies that lenders can use in selecting title company partners.
Memphis-based First Tennessee Bank is one of the technology vendor’s first customers. “Secure Settlements…has brought to the table an actionable solution to a problem First Tennessee—along with our peer institutions—has been discussing for years,” said Bob Garrett, an executive vice president at the bank.
Secure Settlements uses its rating system to provide lenders with a national pool of high-quality closing agents, as well as a “Watch List” that contains 45,000 names of high-risk individuals gleaned from law enforcement, public data and private industry sources.
“Our goal is to provide an independent analysis of closing professionals on an individual level, and ultimately establish a standard that further protects both lenders and consumers by creating an environment of transparency and accountability for the industry as a whole,” Liput said.
