MReport July 2018

TheMReport — News and strategies for the evolving mortgage marketplace.

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Page 33 of 67

32 | TH E M R EP O RT FEATURE W hen it comes to title insurance, efficiency and af- fordability set the best providers apart. While title insurance rates are predetermined in many states, the premier com - panies offer a range of products and services that help lenders close more loans more quickly with complete assurance that the chain of title is secure. They are driven to be fast, affordable, and reliable by the lenders they serve. They do this job best when they perform their work in a manner that is all but invisible to the lender and the borrower. Because they are so good at working behind the scenes, some might assume that that title com - pany's work was simple or did not require advanced technology, but that would be a mistake. These companies were among the first in the industry to adopt new technologies that would allow them to research the specif - ics of the properties they insure quickly. They are also on the cut- ting edge of the move to eClosing, which the Bureau of Consumer Financial Protection has publicly said was the future of the mort - gage business. These are examples of technol- ogy driving the title business to improve and enhance offerings. But the converse is also true. The needs of the title industry are driving new technology develop - ment. So, how is technology driving the title business today (and vice versa), and what are the goals of the companies that work in this space? The Need for Speed I t will probably come as no surprise that one of the primary requirements for an industry that is required to deliver quickly is speed. That means good title companies invest in good people, adequate training, and the best third-party service providers with the best technology. While the TILA-RESPA Integrated Disclosure rules made it illegal for the seller (or the seller's agent) to require a real estate buyer to use a particular title company, the truth is that most borrowers are still going with the recommen - dations of their real estate agent or loan officer. For all of the govern- ment's efforts to drive consumers to shop for real estate services, they just don't purchase or finance real estate often enough to feel comfortable taking on that role. This means that it's often a real estate agent that offers up a trusted partner to handle title insurance and closing services for a new home sale. To maintain this vital business referral partner, the title company is driven to complete its work promptly so that the loan can close on time, preserving the deal for the real estate agent that brought them the business. Similarly, in the case of a refinance where title insurance is recom - mended, the loan officer is the referral partner but the need to close on time is just as strong. In response, technologists have worked to make software more user-friendly as well as capable of performing more of the tasks that were at one time manual processes. The best example of this may be the online title plant. A job that at one time took hours or days and involved human researchers crawling through the vaults at the county recorder's of - fice now take minutes—or less. Third-party service provid- ers have also done their part to remove friction and speed up the process. In our internal studies, we have found that turnaround time can be cut in half for many information products. Property search reports that can typically take up to three days for a regular order and two weeks for batches can be completed in just over a day for regular orders and 4.3 days for batch orders if the right process is employed. In some instances, this is being achieved with the use of robotic process automation (RPA) bots to com - plete parts of the search process. Far and away the most sig- nificant contributor to speed is effective communication, and this is one area in which tech shines. Automated workflow in modern title production software ensures that the right party is notified at the right time. Likewise, software used by third-party partners makes communication between parties quick and easy. Automated email recognition technology and automated reminders also help. But there are still processes that must be handled by humans. The key is to provide the right technology to everyone work - ing on the deal. The same holds true for third parties assisting the title company. One way to accomplish this is for the partner's personnel to work directly within the company's own title produc - tion system. At the very least, it requires good interfaces between the partner's work system and the title company's own. Keeping the Costs Low M argins in the mortgage space have become compressed, and this includes the title industry. Fannie Mae surveys have been showing signs of thinning margins since at least Q1 2016. It's a trend the entire industry has been strug - gling to respond to. It is now vital that every company working here reduce the cost of every product and service they provide. Because the services provided by the title agency are passed back to consumers, the pressure here is not so much to reduce what they charge as it is to bring down their expenses. Again, technology responds well to this problem, if correctly implemented. Driving Title Forward How new tech—and skilled third-party providers—are advancing the title industry. By Melanie Cornelius

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