FundingShield (“FS”) continues to partner with the title insurance community providing analysis of any closing agents acting outside of approved guidelines set forth by the title insurers. When FS reviews closing documents to confirm CPL coverage and funding verification of valid bank accounts for lender clients we collect and maintain a tremendous amount of live data on closing agents. Our technology and staff investigate any inconsistencies identified in closing agent behavior and report this back to the state counsels of the title insurance community for verification. One recent example uncovered in New Jersey provided a top 5 title insurance company details of an entity purporting to be an approved issuing agent when they were a settlement service company with no such issuing authority. Fundingshield partners directly with several title insurance groups to enforce agency affiliations, approvals and other parameters to help title insurers prevent unapproved parties to perform agent functions.
Problem – Approved Issuing Agent?
A New Jersey based entity is named on the CPL and the CPL is confirmed through the title insurance company’s framework to confirm CPL validity. All seems to be ok until Fundingshield notices that the agent in question has not acted in the capacity of issuing agent in prior transactions but has been a settlement service company. Fundingshield’s system flagged the transaction and our staff went to work speaking to the New Jersey state counsel when it was uncovered that the entity was never approved to be an issuing agent. The impact was that the CPL issued was not valid and the lender had exposure seeking a new closing agent to replace the unapproved entity.
Resolution
The lender reviewed the correspondence from Fundingshield and agreed that CPL coverage was not in place. Fundingshield worked the same day with the lender and the title insurer to get a separate letter from the title insurance company to cover the transaction so that it could close on time with zero borrower impact.
The title insurance company has used the data that Fundingshield has provided to develop and petition the state insurance commissioner to approve a revised state CPL form that once ratified will cover entities that fall out of permitted coverage such as settlement agents. Further the title insurer has developed a workflow that will allow a streamlined approach to investigate matters escalated by Fundingshield given several similar situations where CPL and insurance validity were compromised to the detriment of lender clients.
Fundingshield’s title insurance services are available to all insurance providers.
About FundingShield
FundingShield is a leading software enabled services company and the only provider of active loan level diligence for closings to the residential mortgage industry. The Company’s array of services provides active verification and validation at the loan level for mortgage closings and detailed analysis of the documentation used. Our products & services include:
- Verification and validation services at the loan level of closing documents for lenders, insurers and title companies
- Confirmation of title insurance coverage for lenders backed by FundingShield’s GUARDIAN CERTIFICATE
- Automated audit compliance management systems for 3rdparty service providers of lenders, title & state agencies & appraisers.
- Cyber security, IT Theft, online brand reputation monitoring and brand protection, 24/7/365 tracking of key property, personnel & vendors with threat reporting automation leveraging millions of public data points.
- Specialized underwriting services to insurance companies and lenders as well as closing process audit reviews.
For more information on FundingShield, to schedule a WebEx demo or to see what other services we provide the residential mortgage industry please email Sales@FundingShield.com or call (949) 706-7888