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Third party vetting issue rears it's ugly head again
by CHARLENE PERRY | 2014/08/15 |

Have you or anyone you know ever been asked to pay a fee to be vetted by a third party vetting services as a condition being put on a lender's approved vendor list?


For the first time in over two years, I was recently asked by a loan broker whether or not I was vetted through Secure Settlements, a third party vetting agency who claims to be able to properly vet a title agent to insure to the lender that they (the title agent) are compliant with best practices, and are trustworthy by offering a comprehensive risk management report of third party services providers, including title agents, appraisers, accountants, attorneys, document preparation firms, etc. 

In 2012 this same company was very actively engaged in trying to get all lenders to use their services and many, if not most, lenders began to think that perhaps this third party service was needed to protect the consumer.

As a result of the tireless efforts of the American Land Title Association and the various state Title Associations it was determined that in fact the underwriters all do a phenomenal job of vetting their title agents and agencies with annual audits, monthly reports, monthly on site visits, etc. , and so, when this e-mail came to me inquiring as to whether or not I had been 'vetted' by this third party vendor, I replied as follows:

No, it is not something I have been required to do despite the best efforts of Secured Settlements to capture business from title agents after the CFPB issued a statement some years ago regarding oversight of title agents and others who have access to consumer information, which statement the CFPB has since clarified.

A couple of years ago this was an issue but I thought vetting through  Secure Settlements or any other 3rd party vetting service was a thing of the past.  I was very actively involved in this issue on behalf of MLTA in 2012 and am familiar with the way in which Secure Settlements attempts to capture business by promising referrals, etc if a vendor pays to be vetted. This practice has been suggested by some to be a violation of RESPA Section 8 (kickbacks and referrals) see link here

None  of the major  lenders, including Wells Fargo, B of A etc,   require vetting through this or any other 3rd party.  They rely  instead on the underwriters, all of whom run credit checks, background checks,licensing checks, bonding requirements etc for all of their approved agents. The closing protection letters used by all underwriters insure the lender against such things as fraud, failure to comply with instruction, etc.  The ALTA, (American Land Title Association) the MLTA (Maryland Land Title Association) and the NAILTA(National Association of Independent Land Title Agents) as well as other State Land Title Associations worked tirelessly to address this issue of 3rd party for profit  agencies providing a redundant process to do exactly what underwriters are already doing. The CMC (Consumer Mortgage Coalition) has recently joined forces with NAILTA  to further address this matter and in addition ALTA has implemented and is enforcing its Best Practices   All title agents must be compliant in order to retain their appointments with their underwriters.

Further, these 3rd party vetting agencies are:
NOT able to measure competency or skill
NOT a governmental agency or endorsed by the government
NOT a licensing  authority
NOT an independent licensing agency
NOT a State authorized disciplinary agency

So, the questions for today are: 

Have you recently been asked whether or not you had been "vetted" by Secure Settlements or any other third party vendors.   And, if so, what was your reply?  

If you have been vetted by a third party vetting service, what was your reasoning for paying their fee and going through their process?  


934 words | 5890 views | 2 comments | log in or register to post a comment

No, I have never heard of anything like this, nor would I ever participate. It sounds like the "third party" is trying to muscle in for a piece of the pie, where they were never needed in the past, and should never be needed in the present or future. What a scam! 
by Alexis Frey | 2014/08/18 | log in or register to post a reply

"Pay to Work" Third Party Vetting

This is very common for Notary Signing Agents.  Vendors are requiring the NSAs to purchase a background check from a SPECIFIC company or association - even if the NSA has a current background check from a different company.

NSAs are instructed that if you do not have a background check from X association, which can be up to ONE year old, or do not purchase a background check from X association, we will not use your services.

My background checks are recent and more detailed than some of these "pay to work" third party background check companies.  Apparently paying another fee for another background check to another "favorite" company is a higher priority than the quality and thoroughness of the background check.  Worse yet, even if you purchase the required background check, you have no guarantee of EVER getting any work .... and the next time you are contacted you may have to purchase a "new" background check from a different "favorite."

What frightens me:  What is happening to these thousands upon thousands of individual background checks sitting on top of desks, in e-mail boxes, in "the cloud," stored on PCs, in paper files and heading out to garbage cans and, hopefully, recycling plants?

Are there repeated recent background checks done on each individual whose hands touch, eyes see or have access to these background checks? 

by Bobbi Shorthouse, Notary Public | 2014/08/18 | log in or register to post a reply



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