InsightsInstant title is pivotal to building home equity and refinance profits

Fast-tracking qualifying loan applications builds efficiencies into the mortgage process to reduce costs and get borrowers to the closing table faster.

Economic uncertainty and rising interest rates continue to affect consumers’ attitudes about buying and selling homes, according to the Fannie Mae Home Purchase Sentiment Index released in March. At 58.0, the HPSI was down 17.3 points year-over-year in February 2023 — just slightly above the record low (56.7) set in October 2022. According to the HPSI survey, 79% of consumers believe it’s a bad time to buy and 44% believe it’s a bad time to sell. Fannie Mae projects “subdued home sales” in the coming quarters.

None of this is particularly surprising to mortgage lenders, who have been navigating a marked shift to home equity activity in recent months, as so many homeowners have chosen to renovate their homes versus selling them. Fortunately, instant title is now available to accelerate title decisions and clear-to-close commitments for not only refinance but also home equity transactions. Lenders who adopt instant title in 2023 will be taking a major step toward optimizing their processes, workflows and pipeline management to create new internal efficiencies and a better customer experience.

Instant title helps you attract and retain borrowers

With so many lenders vying for borrowers’ business, customer attraction and retention can be challenging pursuits. How can you increase your appeal in this competitive environment? Offering a faster process driven by instant title is a good place to start. Borrowers are always looking for a quicker, more transparent mortgage experience: When asked which factors were most important to their selection of a refinancing provider, “the ability to close quickly” was the top response among borrowers surveyed for the 2022 ServiceLink State of Homebuying Report (41% of respondents).

Working with a title partner who takes a borrower-centric approach to innovation helps ensure you deliver the experience today’s borrowers expect. ServiceLink, for example, pairs EXOS® Title technology with EXOS® Close, an app that empowers borrowers to self-schedule their closings — a combination proven to cut days out of the mortgage process for refinance and home equity applications.

ServiceLink’s instant title solution also increases transparency to further improve the borrower experience. Lenders who have title complexity information early in the origination process can set clear and realistic timeline expectations with borrowers at the start of their transaction.

Instant title and clear-to-close commitments

Lenders who embrace instant title stand to benefit from both time and cost savings. In leaner times, particularly with home equity loans, maximizing margins on each transaction becomes critical. Instant title technology speeds decisioning and enables lenders to reduce rate lock periods by quickly clearing the way to the closing table. In fact, many lenders are surprised to find that the majority of their loans qualify for fast-tracking through the instant title process.

Jim Gladden, senior vice president, origination strategy, ServiceLink, explains, “The ideal refinance transaction is one with a property inspection waiver (PIW) or some type of limited property inspection requirement. Lenders we’ve worked with have found that well over half of their refi transactions could have been expedited through the instant title process.”

On the home equity side, Barry Coffin, managing director, home equity title operations, ServiceLink, shares that the percentage of loan applications that qualify for instant title varies by lender, depending largely on their geographic footprint. “National lenders with loan volume in data-rich states and counties may find that the vast majority of their loans qualify,” he says.

The importance of data quality and delivery

Delivering reliable instant title commitments requires having the most current, accurate data. In 2023, title companies have access to more data than ever before. Ideally, lenders can leverage title-grade data that includes not only the most up-to-date public records but also historical data offering a more comprehensive look into each property. But data quality varies widely from one title company to the next. Providers can be limited by what is available in their own data repositories and what data their technology enables them to extract from public data sources.

“ServiceLink has access to decades of historical data aggregated by Fidelity National Financial. The breadth and depth of this information, which represents millions of previously examined parcels of land, helps eliminate the need for rework and post-closing claims processing,” says Gladden. “The end result is standard ALTA title commitments and final policies that meet lender and secondary guidelines.”

More and more of this data is becoming available electronically.

“Forward-thinking companies are investing in digital transformations that are bringing a tremendous amount of property data online; this is an advantage the industry didn’t have five or six years ago,” says Sandeepa Sasimohan, vice president of title automation, ServiceLink. “Title companies that are equipped to access this information can not only deliver a title commitment and get borrowers to the closing table faster, but also provide lenders with reliable data to help them streamline their internal processes.”

ServiceLink’s EXOS® technology puts the company in the unique position of being able to extract data from images where the data doesn’t exist electronically, Sasimohan adds. “Our internal technology gives us access to this additional data, which isn’t available industry-wide. We can tap into images and extract the data from those images to bring much more depth to the quality of data we share with lenders.”

Then, rather than following the once standard practice of providing lenders with data in PDF format, ServiceLink supplies the data electronically so that lenders can consume it electronically, routing it into their systems without manual intervention. “Eliminating the time related to keying in the data on the lender’s side enables them to move forward quickly to understand all of the relevant factors and assess risk. Should we close this loan? Are there exceptions that have been identified as part of title? If so, how do we want to proceed with those exceptions? Having title-grade data in a compatible digital format helps lenders evaluate those files more quickly and with more confidence,” Sasimohan concludes.

Because of these advances in both data access and technology, instant title has never been a more powerful option.

Adapting workflows to leverage instant title

To maximize the advantages of instant title, lenders may have the opportunity to adapt their workflows — a task that may be less daunting than in recent years past, given today’s lower-volume environment. ServiceLink segments 100% of title orders into three distinct buckets based on complexity, to enable lenders to prioritize and move loans that qualify for instant title commitments off their books quickly. In today’s market, it’s critical for lenders to leverage any opportunity for increased efficiency.

ServiceLink partners with lenders to ensure they use the most advanced title solutions to their full advantage, based on their geographic footprint, current workflows and more. Collaboration is essential, particularly where technology and pipeline management are concerned.

Automate now, benefit later

With focus on operational efficiencies that improve the bottom line, instant title is emerging as an evolutionary solution whose time has come. The data has caught up to the technology, and adept title providers are supporting lenders and borrowers with time-saving solutions and dedicated, tech-savvy teams committed to moving the industry forward.

Learn more about ServiceLink’s EXOS Title instant title solutions.

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