Due Diligence and Ongoing Monitoring

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  • 1.  Title Recording Services

    Posted 25 days ago
    Good Morning, 

    I've been trying to do some research on obtaining due diligence from Title Recording companies (which vary from small to medium sized). While looking on Third Party Think Tank, it appears title companies are out of scope for some while others continue to perform due diligence. It is currently in scope for us, however I think we are requiring too much from those smaller vendors who may not have what I'm asking for. Typically we would require a SOC report as they have access to PII, however many of the smaller companies would not have something like this. 

    So, here's my question: 

    How many of you have determined this type of service provider to be out of scope of your VM Program? If it is not considered out of scope, what type of due diligence do you feel is adequate for this type of service and the reality of what type of documentation they can provide. 

    Thank you, 

    Danielle S


  • 2.  RE: Title Recording Services

    Posted 21 days ago

    Often, a vendor cannot supply an abundance of due diligence documentation for whatever reason. In the case of title companies, it is understandable that there may not be formal SOC reports or other standard types of evidence available. However, due to the increasing amounts of Title fraud, I would suggest they do stay in scope for your program and that you validate the following:

    • Check the state licensing website.
    • Require proof of cyber insurance
    • Ask what internal controls, procedures, and segregation of duties the title companies have in place to safeguard buyers' and sellers' funds? (request documents to support)
    • Ask what procedures they use to balance escrows (request a documented copy)?
    • When was the last time they escheated funds to the state?

    Just because a title company is small or new does not mean they do not have the controls to protect funds and safeguard customer data.

    I hope that is helpful, but I would love to hear ideas from other members.