Posts

Partnership Automates The Calculation Of Title Settlement Fees

OpenClose has integrated with Timios, Inc., a national provider of title and settlement services to banks, financial institutions and mortgage lenders. The integration allows users to efficiently draw all title and settlement fees directly from within OpenClose’s LenderAssist LOS, eliminating data entry, saving time and ensuring fees are fully accurate and TRID compliant.

Featured Sponsors:

 

 
Timios leads the title and settlement industry in pricing accuracy, successfully bringing the first RESPA compliant, free, instant guaranteed GFE calculator to market, and again delivering TRID compliance guaranteed pricing ahead of the industry. The company guarantees that all title settlement fees with Timios are disclosed accurately in the Loan Estimate (LE) for TRID compliance from the day of origination through the transmittal of the final disclosure to the consumer. OpenClose users can now leverage Timios’ proprietary pricing engine, instantly and seamlessly populating all relevant information within its LOS.

Featured Sponsors:

 
“Timios is a natural fit with OpenClose, as our comprehensive solutions work very well together, providing transparency via their centralized fulfillment model to simplify the calculation of settlement fees,” says Vince Furey, SVP of lending solutions at OpenClose. “Further, both of our customer support models are very hands-on and responsive, which is a significant attraction to our mutual customers.”

Featured Sponsors:

 
Trevor Stoffer, CEO of Timios added, “Timios is proud to partner with OpenClose to deliver the best pricing solution to lending partners throughout the country. Like OpenClose, Timios has built a reputation as an industry leader for innovation, and OpenClose is a natural partner in driving transparency and simplification into real estate transactions. OpenClose users will never face another loss from mistakes because Timios’ pricing data is instant, accurate, and guaranteed.”

Timios, Inc. is a California-based corporation and the country’s fastest growing title and settlement services company. Since its founding in 2008, Timios has serviced more than $30 billion in escrow closings and expanded into new markets throughout the country. In addition to fee calculations, Timios also offers a wide variety of title insurance products, escrow and settlement services, realtor and REO purchase, appraisal and valuation products and services.

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Accurate Group Expands Its Team

Accurate Group, a provider of real estate appraisal, title and compliance services, announced the expansion of its sales team. Matthew Lichtner, a mortgage and settlement services industry veteran has joined the Accurate Group sales team as Senior Vice President, National Account Manager.

Featured Sponsors:

 

 
Matt has close to 30 years of experience, having served in a number of senior level sales positions within the title insurance and information industry. Matt has extensive knowledge in property data products and services, technology platforms, and business process outsourcing across all segments of the mortgage industry.

Featured Sponsors:

 
“Matt’s focus will be to drive new title and valuation sales, including our industry leading ValueNet suite of products, using his unique relationships within the banking and real estate finance industries. Matt will concentrate on the west coast, specifically California where there is tremendous growth opportunity for the Accurate Group.  He will also market our AMC services to all areas of real estate lending,” stated Accurate’s National Sales Manager, Scott Vilseck.

Featured Sponsors:

 
Effective May 16, 2017, Richard L. Heltzel III will move from his current position as Director of ValueNet, a division of Accurate Group, to join the company’s sales team as Vice President, National Account Manager. Rich began his career with the Accurate Group in 2010 and was an integral part of the company’s explosive growth as an Appraisal Management Company (AMC). During that time, he managed Accurate’s Alternative Valuation Division in Cleveland where he successfully cultivated a nationwide network of inspection companies along with overseeing Accurate’s reseller relationship with ValueNet. When Accurate acquired ValueNet, Rich relocated and assumed the role of Director, overseeing Accurate’s GroundWorks inspection business.

“Rich has been extremely successful in his role as Director of Accurate’s ValueNet suite of products,” said Scott Waxman, Chief Appraiser and President of Accurate’s ValueNet division. “Given his prior success within the company, I’m looking forward to watching his continued development as he diversifies and expands within our organization.”

“I’ve asked Rich to lead Accurate in winning new title and valuation revenue in the northeast region as well as specific target accounts across the United States,” stated Vilseck. “Based on Rich’s drive and product knowledge, along with his desire to pursue a career in sales I felt this was the perfect opportunity for him to continue to grow within the company. I’m excited to make this announcement – I expect Matt and Rich’s expertise will help further accelerate revenue growth and solidify Accurate Group’s position as a market leader in real estate title, appraisal and valuation products and services.”

Accurate Group continues to attract outstanding talent along with mentoring their current employee base to solidify its future and expand at a rapid pace. This move will allow Accurate Group to further diversify its customer base, increase market share and continue to deliver exceptional service to its growing client base of banks, credit unions, mortgage servicers and real estate lending organizations.

Progress In Lending
The Place For Thought Leaders And Visionaries

Integrating eRecording And Title

Indecomm Global Services, a provider of business process outsourcing, learning, and technology solutions, announces that its InteleDoc Direct (IDD) eRecording Platform with Recopedia has been integrated with the ResWare title production platform. This collaboration brings Indecomm’s latest innovation in eRecording, Inteledoc Direct with the Recopedia toolkit, to ResWare’s title platform. Indecomm offers a web-based eRecording platform with a toolkit that provides current county specific requirements and fee calculations for all real estate document recordings, rather than just prompts and tips about eRecording only county requirements. The inclusion of this technology into ResWare will dramatically boost the efficiency of title agents, enabling them to meet all their business processing and recording needs in a single platform.

Featured Sponsors:

 

 
“Indecomm’s automated solutions enhance a variety of business process applications used by title agents,” said Rajan Nair, CEO, Financial Services Division, Indecomm Global Services. “IDD’s integration with ResWare is an outstanding example of enhancing the overall recording experience for title agents.”

ResWare focuses on streamlining the title recording process, which is challenged by slow turn times, high employee turnover, and inconsistent results. ResWare provides enhanced automation and access to a single platform that manages allof the documents, vendors, and processes. It automatically alerts the appropriate individuals when they must complete a task.

Featured Sponsors:

 
“Indecomm and ResWare have collaborated to allow their customers to achieve the most that technology can supply to their bottom line,” Nair said. “It is a continuing commitment, which lies at the heart of our business goals.”

InteleDoc Direct is part of a portfolio of Indecomm’s proprietary technology platforms, including iTitleHub, Kaizen Income Analyzer, and Publishing Portal, whose purpose is to decrease risk and enhance productivity.

“Adeptive Software is delighted with the opportunity to work with Indecomm, a leading global technology company with deep expertise in document management,” said Bryan Buus, President, Adeptive Software Corporation. “Together with our ResWare platform, we are at the forefront of providing services to title agents.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Service Provider Completes Acquisition To Broaden Its Reach

Solidifi, an independent provider of real estate valuation services to 60 of the top 100 lenders, today announced the acquisition of Linear Title & Closing Limited (“Linear”) for up to U.S. $96 million subject to certain performance metrics, bringing Solidifi’s established next-generation real estate technology platform to the $10 billion title and closing market.

Rhode Island based Linear is a top-five independent title search and closing provider for refinance, purchase, short sale and REO transactions in all 50 states. Adding these services to Solidifi’s existing market leading position in property valuations gives the company a more complete suite of services and expands its market share, leveraging the company’s next generation network management technology platform.

Featured Sponsors:

[huge_it_gallery id=”2″]

“We are extremely pleased to announce this acquisition, which will enable Solidifi to bring our demonstrated excellence in using technology to improve the customer and field-agent experience to the large and growing title and closing market,” said Jason Smith, Chief Executive Officer of Solidifi. “Linear represents a great fit with our existing business and we look forward to working with them to bring the innovation Solidifi is known for to mortgage closings.”

Based in Buffalo, New York, Solidifi is one of the largest providers of mortgage valuations in America. Completing one in ten appraisals nationwide, and with an investment of more than $35 million to date in its proprietary software platform, the company has grown its market share approximately 50% each year.

Featured Sponsors:

[huge_it_gallery id=”3″]

“The management team of Linear has long been seeking like-minded partners focused on building scalable software services for the mortgage closing space,” added Nick Liuzza, Chief Executive Officer
of Linear. “Linear has a tradition of developing services for its clients that improve operating profitability and enhance customer outcomes. We could not be more excited to collaborate on these initiatives with Solidifi, which will benefit our clients, our field agents, the industry and Linear’s partners.

With the acquisition of Linear, Solidifi manages a marketplace of more than 100,000 independent, qualified appraisers, abstractors, notaries, attorneys, brokers and real estate professionals that collect and assess key attributes of individual properties. Solidifi’s technology platform enables the company to grade and manage field agents in real time, selecting the right agent for each transaction and providing our clients with materially faster, higher quality, and compliant products.

The technology platform ensures the right agent is assigned to each transaction the first time, enhancing productivity and loyalty, reducing manual intervention, while enabling Solidifi to operate on a dramatically lower cost structure than traditional service providers.

“Solidifi’s industry leading technology and network management expertise will bring an unparalleled level of innovation and customer service to the title and closing market, just as Solidifi
has done in the appraisal market,” said Kevin Walton, Solidifi’s Executive Vice President of Corporate Development. “This is an incredible opportunity to better serve our clients by using our technology to improve the experience in what has been historically one of the most challenging aspects of completing a mortgage loan.”

The acquisition of Linear is Solidifi’s third since 2013, following on the purchases of Kirchmeyer & Associates and Southwest Financial Services Ltd. Linear’s offices will remain in Middletown, RI. The transaction brings Solidifi’s total employee count to more than 700.

Solidifi’s parent, Real Matters Inc., concurrently raised $100 million through a private placement of common equity to fund the acquisition.

About The Author

[ABTM id=15321]

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Using Technology As A Competitive Advantage In The Title Industry

website-pdf-download

web-tme914-jackie-hoytThe TILA-RESPA Integrated Disclosure (TRID) Rule was a game changer. Now, all title companies must prioritize security and efficacy. Technology can facilitate this; in fact, title and settlement providers who leverage the latest technology trends will better serve their clients and their partners. These benefits will become significant competitive advantages as the lending environment becomes increasingly regulated.

By implementing strategic technology initiatives to support industry regulation, we have been able to achieve critical efficiencies and exceed client service benchmarks. Below are the top four technology initiatives that have transformed practices at Hillsboro Title Company.

Featured Sponsors:

[huge_it_gallery id=”2″]

Hire an IT Manager with industry experience

Traditionally, title companies have relied on an outsourced IT resource to provide internal technological support. While these providers are able to meet most needs and make sure your network and equipment is working as it should, they are not well-versed in industry-specific best practices and regulations. That’s why Hillsboro Title Company opted to hire a full-time, in-house IT Manager to advise on all technology maters. With almost two decades of title industry-specific IT experience, he can advise on day-to-day break/fix technological problems, but also make strategic recommendations to improve operations on a much higher level. Having a person of his capacity on staff has allowed us to utilize technology to drive business growth and exceed customer service goals.

Implement collaborative software that features real-time updates

In 2015, Hillsboro Title Company implemented the portal on ResWare (work flow automation software we adopted in 2009)—a collaboration portal for all title company constituents.  Many other companies use this software, but not to its fullest capacity—to serve lenders, real estate agents, buyers, and sellers. Our model offers a client and partner portal into which our various audiences can log in and gain access to the information most relevant to them. In addition, this software allows us to leverage third-party integrations, furthering the automation of title workflow. For example, real estate agents can upload or download documents, underwriters can quickly see where an open file is in the process, and clients can see where the title process is in real-time. This technology is even more crucial now in this heightened regulatory environment because it reinforces deadlines, timeliness, and partnership. We are able to tailor services, products, and subsequent workflow actions to the customers’ needs and state requirements.

Featured Sponsors:

[huge_it_gallery id=”3″]

Additionally, because real-time information prompts proactive response, issues on files are addressed more expediently. Our lenders have given this portal and our construction disbursing software rave reviews because they can see, in real time, what funds have been disbursed on a project and the percentage of construction work completed. This portal has also served to answer some of our most frequently-asked questions, providing a more instantaneous form of customer service.

There are many software options available to the title industry to engage partners and clients and improve efficiency. The key is to do your research and make sure you have qualified staff in place to facilitate implementation and training.

Employ electronic reconciliation capabilities

Expedited processes have been of utmost importance since the TRID Rule created accelerated processes. Hillsboro Title Company has been able to adhere to the faster-paced closing cycle, in part, by utilizing Rynoh Accounting software. While most companies reconcile accounts every 30 days with an outside accounting resource, our accounting program reconciles multiple accounts for us daily.

Not only does this software fulfill the American Land Title Association’s Best Practice Pillar 2 which states that title companies should “adopt and maintain appropriate written procedures and controls for Escrow Trust Accounts and allow for electronic verification of reconciliation,” but it also acts as a watchdog. Daily, accurate reconciliations reveal issues within 12 hours (as opposed to 30 days); the faster problems are identified, the faster they can be resolved. In addition, Rynoh automatically sends these electronic reconciliation reports to permissioned Hillsboro Title Company employees and our underwriters.

Encrypt your email 

ALTA’s Best Practice Pillar 3 mandates an information security program to protect Non-public Personal Information (NPPI) as required by local, state and federal law. Even before this best practice was released, Hillsboro Title Company prioritized the protection of personally identifiable information (PII). For several years, all of our emails that contain non-public personal information have been encrypted automatically by an onsite security program. This means that when we exchange emails or documents that contain private information, the receiving party has to type in a username and password to retrieve the information.  This additional layer of security provides peace of mind to financial institutions—and helps lenders meet their privacy compliance requirements as well.

Final Thoughts

If you are not progressing, by definition, you are stagnant. As technology continues to advance and additional regulations are imposed upon the real estate, lending, and title industries, we must pool our knowledge of available resources. What exists that can make our systems more efficient, our operations increasingly streamlined, and our customer service unparalleled? As we vet and ultimately select technological innovations, we must invest the time and money into utilizing them for maximum potential—and profit. We are all in this heightened regulatory environment together; together we can navigate this new landscape. And embracing technology will allow for a more comfortable journey.

About The Author

[author_bio]

Jacqueline “Jackie” Hoyt is the CEO of Hillsboro Title Company, a full service residential, commercial, and construction disbursement title insurance agent serving areas across Missouri. For more, please visit www.hillsborotitle.com or call 636-222-8623.

Accurate Group Launches Next-Generation Appraisal And Title Management Interface

Accurate Group, a provider of real estate appraisal, title and compliance technology and services, has released a new responsive interface for its appraisal management and title services platform. The Accurate Archer platform gives banks, mortgage lenders and credit unions on-demand access to analytics and insight into revision rates, turnaround time, quality control and compliance. Smart process flow technology and built-in compliance rules accelerate turnaround times while also ensuring regulatory compliance. The interface also facilitates delivery of title and appraisal information using the most current MISMO-based datasets.

Featured Sponsors:

[huge_it_gallery id=”2″]

In addition, lenders will benefit from the platform’s new responsive interface design, which will enable them to quickly and easily submit, monitor and track property appraisal and title requests nationwide from any mobile device or web browser. A version of the new interface designed specifically for appraisers will also be rolled out to Accurate Group’s extensive network of real estate appraisers.

Key highlights of the new Accurate Archer managed services interface include:

>>User configurable Dashcards that provide real-time information on key metrics, including open orders, upcoming orders due, orders past due, turnaround time, revision rates, lender action required, property owner action required, and more

>>Mapping technology that enables users to quickly identify details on each property location and do heat map analysis on regional appraisal demand

>>Real-time reporting and analytics capabilities that enable lenders and servicers to generate tables, charts and graphs based on user-defined variables, view aggregate trending data and gain greater insight into their overall appraisal management function

>>Unprecedented transparency into service level agreement (SLA) status and estimated delivery dates, giving lenders the ability to actively monitor Accurate Group’s performance as an outsourced service provider

“Real estate lending and servicing is a complex business that requires accurate, timely property valuations and title information as well as advanced knowledge of related regulatory compliance guidelines. Our latest release of the Accurate Archer managed services platform is designed to help our clients gain on-demand insight into critical information across all aspects of the appraisal management and title services function – from order generation to delivery cycles to trends over time,” stated Mike Cullen, chief information officer for Accurate Group.

Featured Sponsors:

[huge_it_gallery id=”3″]

“Accurate Group is leading the market in delivering next-generation technology that enables lenders, servicers and appraisers to transform how they manage real estate appraisals and title information, resulting in improved cycle times, better compliance, lower costs per loan and a more profitable business.”

About The Author

[author_bio]

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

ValuAmerica Integrates With Mercury Network

ValuAmerica, a national title agency, appraisal management company (AMC) and technology provider, and Mercury Network today announced that ValuAmerica is integrated into the Mercury Network vendor management platform. Here’s why this matters:

More than 700 lenders and AMCs use Mercury Network to manage compliant and efficient appraisal operations. This integration allows lenders using the Mercury Network vendor management platform to place appraisal orders with ValuAmerica and streamlines communications by automatically passing order statuses and documents back and forth. And lenders can do this without modifying their workflow. Mercury Network will route orders to ValuAmerica based on each lender’s unique assignment and compliance requirements. The system captures a complete audit trail of the assignment.

Featured Sponsors:

[huge_it_gallery id=”2″]

“Our partnership with Mercury Network will help streamline appraisal ordering, management and payment. And it eliminates duplicative data entry on multiple systems, which can create errors,” said Shawn Murphy, executive vice president of ValuAmerica. “Lenders utilizing Mercury Network will see efficiency gains in their appraisal management process.”

Featured Sponsors:

[huge_it_gallery id=”3″]

“Lenders use Mercury Network to place orders with their AMCs for compliance with banking regulations from CFPB, OCC, FDIC, and they rely on us to develop the technology that connects them to all their preferred AMCs,” stated Jennifer Miller, president of Mercury Network. “We’re proud to welcome ValuAmerica to the roster of AMCs connected to Mercury.”

Progress In Lending
The Place For Thought Leaders And Visionaries

Are ALTA’s Best Practices Best For The Industry?

You Can Download This Full Article As A PDF HERE

web-tme914-jackie-hoytAs a result of the bundling, overvaluation, and selling of mortgages as an equity product that led to the real estate collapse and lending lockdown, the Consumer Financial Protection Bureau (CFPB) released a bulletin in 2012 that reminded lending institutions that they would be held liable not only for their own actions, but also for the actions of their vendors.

In the title industry, this was game-changing and the industry’s governing body—the American Land Title Association (ALTA)—responded by releasing “ALTA’s Best Practices,” a framework developed to assist lenders in satisfying their responsibility to manage third-party vendors. It is the title industry’s attempt to help forthright lending institutions have one less thing to worry about as they navigate these heavily regulated waters. Initially, this seemed like a win-win. After all, the “seven pillars” that constitute the Best Practices— including mandates related to licensing, escrow, privacy and security, settlement processes, policy production, insurance coverage, and customer care— would both elevate the professionalism of the title industry and allow compliant providers an automatic “in” with lending institutions. However, as the soft deadline (August 1, 2014) for implementing these Best Practices looms, there will be five main unintended consequences, as described below.

>> Confusion: While the Best Practices are uniform, interpretations for compliance are not. Title companies are implementing in a variety of ways and lending institutions have no standard guidelines from which to vet vendors. As a result, there is confusion on both sides of the fence, and many title companies concerned that they will not be able to compete for business without a set checklist used by all lending institutions.

>> Small Title Companies Close: A small title company cannot possibly meet the demands set forth in Best Practices. In fact, Hillsboro Title Company grew just to be able to sustain this industry change. We now have two people working full-time on Best Practices compliance. The smaller shops simply won’t be able to afford to get into compliance and will be forced to close or merge with other companies.

>> Big Guys Get Bigger: While the larger title companies will have the resources to implement Best Practices, they will undoubtedly have to add compliance staff and, as a result, additional closing offices to offset the cost of the new hires. In addition, with small companies needing to shut their doors, larger companies will face an unparalleled opportunity for growth by acquisition.

>> Less Competition, Less Choice: As a result of the consequences explained above, there will be a surge of mergers and acquisitions in the title industry. And, as smaller title companies disappear or become acquired by larger companies, lending institutions and consumers will see their pool of title companies from which to choose shrink drastically.

>> Higher Costs: Compliance with Best Practices requires a significant influx of funds; as the cost of doing business increases, these costs will more than likely be passed along to the consumer.

>> More Law Suits: With all of the money being spent to regulate, document, and verify—and all of the confusion surrounding the soft Best Practices compliance deadline, there will be an increase in litigation against lenders and title companies to take advantage of the wrinkles yet to be ironed out in discovery documentation.

ALTA’s Best Practices will undoubtedly raise the bar for quality and professionalism in the title industry. However, with good, there is always some bad. Many title companies will find themselves working “on the business” more than “in the business” and business development initiatives and profits may suffer. While the Best Practices protect consumers, promote quality service, and provide for ongoing employee education, the regulations are placing hefty burden on title companies across the country. The full effects of this industry game-changer will be interesting to watch.

About The Author

[author_bio]

Jacqueline “Jackie” Hoyt is the CEO of Hillsboro Title Company, a full service residential, commercial, and construction disbursement title insurance agent serving areas across Missouri. For more, please visit www.hillsborotitle.com or call 636-222-8623.

Are ALTA’s Best Practices Best for the Title Industry?

As a result of the bundling, overvaluation, and selling of mortgages as an equity product that led to the real estate collapse and lending lockdown, the Consumer Financial Protection Bureau (CFPB) released a bulletin in 2012 that reminded lending institutions that they would be held liable not only for their own actions, but also for the actions of their vendors.

In the title industry, this was game-changing and the industry’s governing body—the American Land Title Association (ALTA)—responded by releasing “ALTA’s Best Practices,” a framework developed to assist lenders in satisfying their responsibility to manage third-party vendors. It is the title industry’s attempt to help forthright lending institutions have one less thing to worry about as they navigate these heavily regulated waters. Initially, this seemed like a win-win. After all, the “seven pillars” that constitute the Best Practices— including mandates related to licensing, escrow, privacy and security, settlement processes, policy production, insurance coverage, and customer care— would both elevate the professionalism of the title industry and allow compliant providers an automatic “in” with lending institutions. However, as the soft deadline (August 1, 2014) for implementing these Best Practices looms, there will be five main unintended consequences, as described below.

>> Confusion: While the Best Practices are uniform, interpretations for compliance are not. Title companies are implementing in a variety of ways and lending institutions have no standard guidelines from which to vet vendors. As a result, there is confusion on both sides of the fence, and many title companies concerned that they will not be able to compete for business without a set checklist used by all lending institutions.

>> Small Title Companies Close: A small title company cannot possibly meet the demands set forth in Best Practices. In fact, Hillsboro Title Company grew just to be able to sustain this industry change. We now have two people working full-time on Best Practices compliance. The smaller shops simply won’t be able to afford to get into compliance and will be forced to close or merge with other companies.

>> Big Guys Get Bigger: While the larger title companies will have the resources to implement Best Practices, they will undoubtedly have to add compliance staff and, as a result, additional closing offices to offset the cost of the new hires. In addition, with small companies needing to shut their doors, larger companies will face an unparalleled opportunity for growth by acquisition.

>> Less Competition, Less Choice: As a result of the consequences explained above, there will be a surge of mergers and acquisitions in the title industry. And, as smaller title companies disappear or become acquired by larger companies, lending institutions and consumers will see their pool of title companies from which to choose shrink drastically.

>> Higher Costs: Compliance with Best Practices requires a significant influx of funds; as the cost of doing business increases, these costs will more than likely be passed along to the consumer.

>> More Law Suits: With all of the money being spent to regulate, document, and verify—and all of the confusion surrounding the soft Best Practices compliance deadline, there will be an increase in litigation against lenders and title companies to take advantage of the wrinkles yet to be ironed out in discovery documentation.

ALTA’s Best Practices will undoubtedly raise the bar for quality and professionalism in the title industry. However, with good, there is always some bad. Many title companies will find themselves working “on the business” more than “in the business” and business development initiatives and profits may suffer. While the Best Practices protect consumers, promote quality service, and provide for ongoing employee education, the regulations are placing hefty burden on title companies across the country. The full effects of this industry game-changer will be interesting to watch.

About The Author

[author_bio]

Jacqueline “Jackie” Hoyt is the CEO of Hillsboro Title Company, a full service residential, commercial, and construction disbursement title insurance agent serving areas across Missouri. For more, please visit www.hillsborotitle.com or call 636-222-8623.

A Cure For The Uncommon Asset

You Can Download This Entire Article As A PDF HERE

TME714-Title Story HeadshotsToday, there are an estimated 25 million mortgages serviced within the U.S. Of these, over 4.5 million are going unpaid, as of October 2013 according to DS News. As the aftermath of the housing crisis draws to a close, there remains a lingering problem many servicers still face: a surge in title issues. This relatively sudden increase is a result of incautious origination practices, rushed refinances, and inadequate title underwriting in the high-volume period politely known as the housing bubble.

According to industry estimates, a solid one-third of insured mortgage loans – meaning those with a lender’s title policy – have some title-integrity issues, however remote. And, it is our experience that between seven to ten percent of most servicing portfolios have what could be categorized as “fairly severe” title or documentation defects, which if left unresolved could result in an uncommon asset or complex curative situation, and significant financial losses.

Traditional Vs. Complex Title Defects

The distinction between routine title issues and what we consider “complex title defects” is drawn on (1) the time and difficulty involved in curing the defect and (2) the severity the defect poses to the subject loan’s security interest. Complex issues generally need to be resolved, or at least closely examined to confirm they pose no genuine threat to the underlying security. However, and not insignificantly, certain investors often contractually hold servicers to higher standards than the industry or even state law demands, turning otherwise routine issues into must-fix situations.

Complex issues are usually comprised of (1) lien position concerns; (2) discrepancies or ambiguities in the property description; (3) breaks in the chain of title and missing interests issues; and (4) other various errors and omissions in the recorded documents (e.g., misspelled names, missing homestead language or witness signatures, defective acknowledgments, etc.).

They are typically, in the average servicing portfolio at least, accounts in the foreclosure process in a “hold” status (alongside active bankruptcies, contested foreclosures, and missing collateral file documents). Such holds generate significant costs to the servicer in the form of compensatory fees and repurchase risk, neither of which are likely to be covered by the title insurance policy. In REO, they may be designated as “unable to market,” which in name alone implies the obvious array of costs.

The Curative Factor

Complex issues need to be resolved, and they need to be resolved quickly. The challenge, of course, is in determining how to do so in a way that’s acceptable for both the servicer and its investors. The traditional approach has been to file a claim pursuant to the title policy and then leave the account in the hands of the insurer. But relying solely on the title insurers for curative efforts far too often results in bloated timelines and, in many cases, insufficient cures.

This is largely because the interests of the title company, and even of retained counsel, are simply misaligned with those of the servicers, even if unintentionally. The title companies’ insistent utilization of indemnity offers, or “Letters of Indemnity,” largely disregarded by certain large institutional investors as unacceptable resolutions, is one illustration. The title company may have legally discharged its obligations under the terms of the policy, but the servicer is, practically speaking, in no better place for it.

Filing suit when certain pre-litigation efforts could more swiftly effectuate a cure is another example. Law firms are unsurprisingly adept at litigation, but they over-leverage it as a result. It is rarely needed in the curative context (though it certainly is sometimes), and the “sue first, settle later” mentality tends to carry with it significant costs to the servicer, in terms of both time and fees but also in the form of reputational risk. And unless the title company can easily fix an issue where an LOI – Letter of Intent or specific documentation – won’t suffice, counsel may be required to be retained.

To be sure, the title insurance industry should play a significant role in the curative process. But as the underwriters bear the weight of the title issue influx, it’s prudent for servicers to be pro-active as well. Shaving off even a month from the average claims processing or curative timeline can generate substantial savings.

A Centralized Solution

Although many complex title defects are somewhat nuanced, a streamlined and analytics-driven “process flow” approach can still be effectively leveraged. Particularly if combined with a pre-litigation focus on outbound settlement efforts and a national legal footprint to allow for a centralized solution, this system can optimize the time- and cost-efficiency typically absent from the traditional model.

The ability to successfully locate and obtain cooperation from necessary parties is critical to the premise, but traditional title shops are staffed with title agents, not skilled call agents and skip-tracers. Traditional law firms similarly tend to be myopic in their approach and in their skill-set. As with the title companies, they do what fits their model. Working with a trusted source specializing in curative title services is essential in resolving documentation defects and avoiding financial losses.

It is increasingly clear that a different structure and a better alignment of interests are necessary for servicers looking to stem costs and compete effectively. Getting away from the passivity of the current philosophy and taking a more hands-on approach is critical.

About The Author

[author_bio]

Tom Huddleston serves as senior vice president of Carrington Title Services where he is responsible for managing client relationships, as well as business and strategic development focused on providing real estate and technology solutions within the institutional business channel. With more than 30 years of experience in the financial services industry, Tom possesses an extensive knowledge of all aspects of the real estate continuum, including mortgage lending operations, title and settlement management, default asset management, cash management operations, support services, product development and product management. Jason Pinson is the founder and CEO of Ursus Holdings LLC, which provides Title Curative Services, Consulting, Analytics and Legal Services to the mortgage servicing Industry. He is a graduate of The University of Tulsa College of Law where he was Editor-in-Chief of The International Law Review, holds an MBA from the University Of Tulsa Graduate School Of Business and is a licensed Texas attorney.