The title search process is one of the essential steps in the title business – indeed, in the entire mortgage service value chain. It entails analyzing third-party and publicly available records to ensure that there are no issues, liens, or claims surrounding a property that could later cause a dispute. It protects both the borrower and the lender from any claims on the property once the mortgage has been disbursed, which is why it is a mandatory part of any real estate transaction in the US.
The catch is a title search process can take prolonged periods of time, up to several days or even weeks depending on the age of the property. While a new home may require only a few hours in the title search effort, older homes and large commercial properties usually take anywhere between 10-14 days. This means that the origination cycle is delayed by the period during which a title search is conducted.
As a result, most mortgage businesses choose to partner with a dedicated title search company that will look after this essential but time-consuming task. If you are looking to work with a title search company, here are the key parameters to look for:
1. The variety and coverage of services provided
The efficacy of a title search depends on the number of data points and ownership factors that a company assesses. Who is the current title holder? Who was the immediately preceding title holder, and are there any previous owners? Are there any environmental liens due to potentially harmful or toxic emissions in the property’s proximity? Has all the property taxation been duly filed? These are only some of the questions that your title search partner should be able to answer.
Therefore, when partnering with a title search company, make sure to look into the breadth of services provided. Ideally, they should be able to provide a 60-year search, complying with your region’s mortgage regulations. They should also uncover if payments associated with the property, including utility bills, are fully paid.
2. The market reputation of the title search company
The reputation of a title search company will usually indicate its credibility, leadership, and ability to stay resilient in the face of changing regulations and market dynamics. A title search partnership is long-term, which makes it vital to choose a credible partner the first time around. Some of the ways to gauge a company’s reputation include external audits, the company’s years of market presence, adherence to protocols and norms, and the availability of delivery centers.
For example, Nexval works in accordance with compliance servicer mandates by the FHA (HUD), VA, USDA, Freddie Mac, Fannie Mae, CFPB, and SCRA. We hold several industry certifications and constantly update our operations based on the Fair Credit Reporting Act (FCRA), the Home Mortgage Disclosure Act (HMDA), and others. Considering certifications and prior testimonials will help assess the reputation of your title search partner.
3. Comprehensive coverage of the title lifecycle
While you may be looking for a title search partner, it may be useful to work with a company that has expertise in associated areas across the end-to-end title lifecycle. This will inform not only the quality and efficiency of search, but will also make it easier for you to scale. For an instance, you may choose to partner with the company on title settlement services as well as search.
That is why Nexval offers full search services, title examination, title commitments, and other search services, as well as solutions pertaining to settlement. It is a good idea to evaluate your future partner across five steps in the title lifecycle – search and data entry, issue identification and follow-up, scheduling and document packaging, review, and finally, title recording.
4. The use of cutting-edge digital tools and cybersecurity
Today, title search does not have to be a long and cumbersome process, occupying your or your search partner’s time for days. Title process automation allows mortgage businesses to quickly search through high-volume public data repositories, automatically extract data, and generate relevant reports. The use of cutting-edge digital tools offers more than a cost advantage; it allows you to scale volumes and accommodate complex properties with ease.
Some of the key technologies to look for when choosing a title search company include robotic process automation (RPA) bots, cloud-based tools that are easy to deploy, AI/ML-based document management, and integration-ready platforms. The technology should be compliant with the latest regulatory standards and protected by robust cybersecurity systems that can detect fraud and threats.
5. The ability to customize title search solutions and ensure business continuity
One of the main reasons to work with a title search company is to ensure business continuity even if there is an internal disruption or an interruption in the local labor/operations market. Therefore, the company you choose should have a robust business continuity plan in place, which can support you during unexpected periods like the COVID-19 pandemic and other “acts of God.” This business continuity plan should be intrinsically linked with title search technology.
While outsourcing, it is important to keep track of your unique needs and ensure that the solution is tailored to your title search business. Your partner must be able to offer a customized technology and service solution addressing your specific business problems in the title process.
At Nexval, we bring over two decades of industry expertise and a state-of-the-art digital innovations center to help simplify title search. Our automation-first solutions make sure that title businesses can achieve their intended goals with minimal costs and effort. To continue your journey towards finding the best title search company for your needs, speak with our Tech Gurus!