Technology Enabled Title, Settlement, and Valuation Services in Mortgage Banking

Technology-Enabled Title & Settlement

The title industry is modernizing quickly, driven by ultra-low interest rates, rising consumer expectations for transparency and responsiveness, and technology enablement in many core areas throughout the value chain: title search, tax research, audit & closing support, post-close, and vendor management. The biggest opportunity, and challenge, in the title is to take a lesson from consumer technologies companies, which have made the use of technology central to the delivery of their product – keeping lines of communication between brokers, agents, and lenders open. And more important, central to reducing errors, minimizing costs, and expediting the time of delivery.

Technology-enabled services are adding billions of dollars of value, and a heightened expectation from lenders, and their clients, that their buying experience is driven by the click-button nature and immediate gratification of the Amazon-type purchase experience. For example, generating a HUD-1 document, including calculating fees with document integrity and regulatory compliance used to take weeks – now with technology enablement, vendors can get this information in days. From a lender’s perspective, the wide disparity in processes and technologies used throughout the industry is one of the biggest challenges facing title companies today. 

There are many different processes used across title companies and their agents, which can create inefficiencies in getting to a close for mortgage lenders. The combination of processing disparity and the rapid pace of technological change creates a tremendous demand for planning, investment, and work to facilitate a streamlined, digital process for title companies, and lenders.

While considerable strides in title technology have been made, the title industry still faces challenges stemming from antiquated systems, manual processes, and the introduction of new real estate transaction business models.

As the industry looks to overcome this challenge of process and innovation and move towards a digital experience to improve the front- and back-end user experience, digital transformation will continue to be a huge focus in the title space. The industry will increasingly see more integrations with marketing/CRM and LOS/POS systems to create a seamless experience as integrated options and services are put in place. Through these solutions, the lender/client will be able to achieve greater savings, a better customer journey, and a winning equation in a highly cost-competitive market.

The title industry has already felt the impact of new technologies designed to reduce costs, increase quality, and create a better consumer experience. Which will only accelerate with greater technological innovation, such as blockchain, remote online notary, e-closings, and other such transparency and accuracy-based technology.  

As a specific example of next-level technology making an impact today, digitizing the title research and collation process is a workflow which has started to become AI-enabled. What this means, is that you can automate bulk title search requirements – thereby improving delivery timelines and operations predictability. Auto identifying data sources, coupled with Optical Character Recognition can reduce report generation time by 30%+. The costs and time invested in implementing the right solutions, employee awareness, training, and proper insurance or risk management safeguards will continue to deliver a high ROI. 

In many cases, due to the manual nature of most title and settlement activities, the work completed by title and settlement agents are not core to a company’s operations. In these cases, using an outsourced vendor makes sense. Outsourced vendors can assist in running owner search reports, researching tax and municipal certificates, final policy preparation with print and mail services, and managing status – all without the FTE overhead for non-core work so that a company can spend their budget on true value add or differentiated services and brand building versus pumping dollars into a cost center.

While significant improvement has occurred in the past decade, the aggregate process can still be cumbersome, antiquated, and lengthy. For lenders, the reality check to how far the industry has come is the end-user experience: the ultimate expectation is to deliver a simple, fast, and accurate experience.