Insights2022: The Year Instant Title Changes the Refinance Game

Streamlining processes to get borrowers to the closing table faster is an ongoing priority for mortgage lenders. In 2022, instant title will help them succeed.

The refi frenzy had to end sometime. The end of the first quarter of 2022 saw refinance activity down 60% year-over-year, as mortgage rates rose to their highest level in three years, according to the Mortgage Bankers Association. In this market, it’s critical that lenders think about what went right during the pandemic rush and focus on what could have gone more smoothly. In other words, 2022 is the ideal time to work on optimizing processes, workflows and pipeline management to create new internal efficiencies and a better customer experience. This approach will allow lenders to be efficient in the down market – and be prepared to serve their client base effectively when volume picks back up.

Instant title helps you attract and retain borrowers

As volumes decline, attracting and retaining borrowers is essential. In fact, according to the 2021 ServiceLink State of Homebuying Report, 57% of consumers are either unsure or will definitely switch lenders for their refinance transaction. How can lenders increase their likelihood of retention in this competitive environment? Accelerating title decisions and clear-to-close commitments through instant title is a good place to start. Borrowers are always looking for a faster, more transparent mortgage experience: 50% of consumers said speed was a critical factor in their refinance process. A title partner with a borrower-centric approach to innovation will ensure you deliver the experience today’s borrowers expect.

Instant title can also increase transparency, further bolstering the borrower experience. When you have title complexity information early in the origination process, you can set clear and realistic timeline expectations with borrowers at the start of their transaction.

Instant title and clear-to-close commitments

Lenders also stand to benefit from both time and cost savings resulting from instant title. In leaner times, lenders will look to maximize margins on each transaction. 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 at how many of their loans qualify for fast-tracking through the instant title process. “The ideal loan is a refinance transaction with a property inspection waiver (PIW) or some type of limited property inspection requirement,” explains Jim Gladden, senior vice president, origination strategy, ServiceLink. “As PIW percentages rose over the past two years, while lenders did mostly rate and term refinances, they realized that well over half of their refi transactions could have been expedited through the instant title process.”

Even when a property waiver isn’t granted, instant title still increases origination efficiencies. At ServiceLink, cloud-based title automation engines deliver instant clear-to-close commitments and allow lenders to bypass rework and post-closing claims processing.

The importance of data quality and delivery

Delivering reliable instant title commitments requires having the most current, accurate data – and in 2022, title companies have access to more data than ever. Ideally, lenders are able to 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 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.”

Sasimohan adds that ServiceLink’s EXOS® technology puts it in the unique position of being able to extract data from images where the data doesn’t exist electronically. “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.”

She continues, adding that the once standard practice of providing lenders with data in PDF format is outdated. “We give our clients the data electronically and they consume it electronically, routing it into their system without any manual intervention. Eliminating the time related to keying in the data on their 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 them evaluate those files more quickly and with more confidence.”

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

Adapting workflows to take advantage of instant title

To maximize the advantages of instant title, lenders may have the opportunity adapt their workflows – a task that may be less daunting in today’s lower-volume environment. ServiceLink segments 100% of title orders into three distinct buckets, based on complexity. This information allows lenders to prioritize effectively: getting the loans that qualify for instant title commitments (the majority) off their books quickly. In today’s market, it’s critical that lenders take advantage of any opportunity for increased efficiency. ServiceLink partners with its clients to ensure they use our title solutions to their full advantage – based on their geographic footprint, current workflows, and more.

Kristal Sharp, vice president, Operations, loanDepot, described her company’s perspective during ServiceLink’s recent Demystifying Instant Title webinar: “The settlement provider could give us all of the data in the world, but we need to be able to ingest that data and manage our pipelines accordingly so that that the title work isn't just sitting there for 15 to 30 days. This needs to be a collaborative effort between lender and title provider, especially from a technology and pipeline management standpoint.”

Making process improvements now will leave lenders better able to manage their pipelines during the next boom.

Automate now, benefit later

Now that lenders are no longer grappling with overwhelming volume, and focus is turning to operational efficiencies, 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 pulling it all together with dedicated teams committed to supporting lenders and borrowers and moving the industry forward.

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

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