Technology and the Title Industry: a Tech Driven EchosystemFebruary 19, 2020
Technology has the power to improve countless aspects of business, from processing to efficiency to communication and beyond. Across industries, it allows suppliers to keep up with the ever-evolving demands of consumers. In some scenarios, including within the title insurance industry, technology can even benefit surrounding aspects within the business.
Title and settlement providers are effectively the hubs of every real estate deal. They have the duty of coordinating all aspects within a transaction, from compiling title history to ensuring all documents are processed on time. Expediting the process benefits both the customer and the provider. When technology is successfully implemented, everybody wins.
The latest technological advances in the title and settlement industry have served to promote efficiency in task-based settings by supporting a steady workflow system between departments so that more tasks are completed in an accurate and timely manner. They also enhance transparency throughout the process by enabling open and customizable communication. In today’s mobile-dominated environment, keeping all parties appropriately informed is critical, and technology allows brokers, agents, and lenders to offer better customer service to real estate consumers.
The “Good” Old Days
Until the 1990s, one needed to suffer through the inefficient method of waiting in line at a county records office to obtain title evidence, the first step in issuing title insurance. Technological advances eventually allowed historical title records to be digitized and retrievable through centralized databases called title plants. The result was speedier processing and faster turn times. Now there are many title and settlement firms embracing technology to gain an edge and efficiency.
Advances of the 1990s
As demand for faster processing speeds grew, technological advances allowed for centralized title and settlement companies to manage a significant volume of refinance transactions more efficiently than ever before. These VMCs (vendor management companies) were able to retrieve abstract evidence in seconds instead of days, and data could be integrated into standard templates for quick review and transmission to clients. Tasks and processes could then be modified or outsourced to specialists depending on needs and requirements. Management could carefully monitor effectiveness via electronic reporting and automation.
As the 20th century gave way to the 21st, Americans’ thirst for real estate grew ever-larger. Loan originators started taking on more risk. Loans were issued at higher volumes to borrowers who were mostly unknown, which were then sold to investors who did not fully grasp the nature of the product. Borrowers qualified for mortgages that were previously beyond their reach, and they pounced on the opportunity to become homeowners. A large segment of the population was stretched beyond their financial means.
As we now know, the housing market crash soon followed, with delinquency rates soaring and subprime loans defaulting at frightening rates. Foreclosures swept the nation, and the new normal included short sales, real estate owned (REO) properties, and investor bulk transactions. Title and settlement firms were forced to adapt their services to the new marketplace.
Forecasting the Future
As we look to predict future challenges, one point remains clear: technology will continue to be a driving force in framing how we do business. The title and settlement industry will continue its effort to perfect the centralized business model, increasing reliance on national title firms.
For any company working to remain relevant in this ever-changing market, the capacity to efficiently process many types of transactions is crucial. These include refinances, purchases, REO sales, short sales, and investor bulk acquisitions. Technology will also remain vital to providing exemplary customer service by improving transparency, communication, customization, and integration, as well as allowing for feedback to enable process improvement. Embracing and maximizing the power of technology will be key to winning market share and providing services with speed, accuracy, and quality.
Lakeside Title is a title agency offering cutting-edge tools to help lenders reduce costs, streamline closings and increase compliance. If you’re a lender who would like more information, please contact us today!