Friendly Agency Audit
Today, as state and federal regulators turn an interested eye toward
title agent/agency practices, it is imperative that agency owners, investors,
managers, and key licensed title agent employees ensure their agencies
are in full regulatory compliance. A Friendly Agency Audit is
one paid for by the title agency — as opposed to an audit paid for or
conducted by or on behalf of underwriters or regulators, where results
of the audit must be turned over to the underwriter or regulatory authority.
As our client, our main fiduciary responsibility is to you. Our findings
are turned over, in writing, to you. Your audit report will include
any areas of potential non-compliance with suggestions for correction.
Of course, with knowledge comes the responsibility of bringing what
is NOT in compliance into compliance. While “ignorance of the law” is
no excuse, ignoring the law — including failure to rectify areas of
non-compliance — is not a viable option. Should audit results reveal
items of significant concern (e.g., misappropriation of funds) we will
assist you in making required notification to your underwriters and/or
proper authorities.
Your detailed audit report will provide the information necessary
to obtain a formal written opinion from your in-house or other informed
counsel on any areas of non-compliance. We believe that most title agents/agencies
do their best to comply with state and federal law, to the extent they
are aware of and understand it. It has been our experience that most
areas of non-compliance generally stem from lack of knowledge, rather
than willful disregard of the law. The basic audit process takes 2 days,
but may take longer depending upon the size (number of offices) and
structure [independent or affiliated business] of the title agency.
While the audit may be expanded to include other areas of concern, the
basic audit consists of the following:
Agent/Agency Documentation
- Business Organization
- Agency License
- Errors and Omissions Insurance
- Fidelity Bond
- Surety Bond
- Agent Licenses
- Agency Contracts
- Agent Appointments
- Employment Contracts
- Independent Contractor Agreements
- Abstractor
- Independent Notary/Signing Agent
Regulatory Compliance
- Underwriter/Agency Remuneration
- Affiliated Business Arrangements
- Marketing / Advertising
- Operating Account Review
- Expense Account Review
- “Key Customer” Business Relationships
- Fee Structure and Pricing Issues
- Title Premium
- Closing Services and Title Search Fees
- Fee Abatement and Rebating Issues
Privacy Act Compliance
- Privacy Act Disclosure
- Distribution
- Compliance
- Consumer Protection
- Physical Files
- Electronic Files
- Outsourced “Signings”
File Review/Quality Control
- HUD-1 Settlement Statement
- Line Item Backup Documentation
- Certification by Closing Agent
- Escrow Balance Sheets
- Deposits and Disbursements
- Vesting Documents
- Title Commitment and Policy Review
Escrow Account Compliance
- Compliance with Florida Statutes
- Compliance with Florida Title Rule
- Compliance with Underwriter Requirements
- Risk-Management Issues
- Access to Check Supplies
- Bookkeeping
- Check-Signing
- Out-of-Office Transactions
Claims History Review
- Type of Claims (Title or Settlement Related)
- Cost of Claim
- Agent/Agency Responsibility
Personnel and Workflow Review
- Task Evaluation – Workflow Process
- Job Task Training
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