A title business plays an essential role in the mortgage process, acting as a fiduciary intermediate between the buyer and the seller. Without an efficient title process, loan approval timelines can get extended beyond expectations, and lead to a poor customer experience (CX). This is a concern since CX in the mortgage industry is already below the cross-industry average, and home buyers find loan applications to be as equally or more stressful than the process of buying a home (89%).
Further, errors in the title process can cause severe issues down the line, impacting both the home buyer and the seller. That is why it is crucial to identify and address the top challenges in the title industry on a “war footing” as it were, especially as mortgage providers face lower forecasts and a challenging business environment with a decline of as much as 35.5% from 2021.
Fortunately, automation can provide a solution to the majority of title process challenges encountered today. This includes:
1. Overburdened title executives with too many tasks
While growing work pressure is a challenge for nearly every executive in the mortgage sector, it is particularly severe for title professionals. Research suggests that 50% of those working in the sector are burdened with more tasks than they can handle, which not only increases the risk of errors but also brings down the employee experience. Automation could provide a solution by employing RPA bots to complete repetitive and mundane tasks, leaving employees free for work that genuinely adds value.
2. Collaborating with other stakeholders in the mortgage value chain
In many ways, the success of the title industry lies in its ability to collaborate with stakeholders across the mortgage value chain – ensuring there is accountability, a single source of truth, and no duplication. Unfortunately, a title process that’s not automated tends to rely on solo and independent work. This means more time spent on approvals, double and triple checks, and overlapping tasks: all of which could be addressed through an automated collaboration dashboard.
3. Complex regulations, leading to mounting paperwork
Ever since the 2008 financial crisis, the mortgage industry has been under scrutiny, with the recent pandemic further adding to the complexities. Deloitte expects industry regulations to evolve in as many as 10 areas, ranging from anti-money laundering (AML) to climate change. This will lead to mounting paperwork for property transactions, calling for title process automation. With automated and automatically updated rules to check against compliance norms, the title process can adapt with ease.
4. Manual dependence for record-keeping and audits
While digital systems are overwhelmingly preferred by home-buyers, backed processes in mortgage are still stuck in legacy gear. Spreadsheets and paper documents are used for the purpose of record-keeping, adding to title inefficiencies. Since manual processes are difficult to retrench, companies keep putting off digital transformation projects, which only intensifies the challenge. Subscription-based automation solutions are needed here that can help title companies quickly make the shift.
5. Siloed systems, making it difficult to maintain data quality
In the absence of an automated and connected workflow across the mortgage value chain, data exists in disparate, siloed systems. These may be at various levels of digital maturity, ranging from paper records to unstructured PDFs and standalone LOS platforms. As a result, data quality suffers and there is always a risk of duplication. In a bid to cleanse, process, and analyze data without automated tools, title executives face even more workloads.
6. An aging workforce and talent shortage
Most title agents belong to older demographic groups and the industry has a hiring problem. As per research, only 8% of industry professionals are 20-30 years old. 25% are 30-years old and the majority – i.e., 67% – are over 40 years of age. This causes declining productivity, dissatisfaction with iterative workloads, and less scalability, which could be addressed via automation. In fact, digital tools can capture the tribal knowledge held by these experienced individuals and make it reusable.
7. The pressure of adhering to deadlines and delivering superior CX
From pre-approvals and property appraisals to loan origination and payment, the entire process can take anywhere between 30 days to 10 weeks. The timeline has a direct impact on borrower experiences, which makes it imperative to complete the title process as early as possible. This is one of the key industry challenges in a dynamic economy (given highly fluctuating origination volumes) that can be addressed by automation – i.e., by having bots complete tasks at a fraction of the time and cost.
8. High costs of building in-house solutions from scratch
Frequently, title companies attempt to digital systems in-house in a bid to maintain control over data and security, only to realize the capital expenditure and technical expertise involved. Home-grown solutions are capped by the availability of resources, limiting the returns a company can expect from their automation investment. To overcome this challenge, it is important to partner with proven experts in technology and mortgage, focused on cloud solutions that reduce capital expenditure.
9. Challenges in scaling and acquiring new business
The combination of legacy processes and heavy workloads means that title companies gave little time to spare for new business acquisitions. Research suggests that more than half of company CEOs and VPs handle around 5 closings a month entirely on their own, taking away from their ability to focus on growth. Automated solutions would be able to ease workloads, and also energize the workplace to attract young talent that is necessary to explore growth opportunities.
10. The risk of overlooking errors in title documents
Document-related errors – such as mistakes in public records, illegal deeds, unknown liens, forgeries, undiscovered wills, etc. – continue to be one of the top challenges in the title industry. An automated review process that checks for pre-configured parameters would be able to identify these issues early on and initiate a resolution.
At Nexval, our team of 1000+ experts combines decades of title industry knowledge with the latest technology innovations and expertise to provide tailored solutions for your title industry challenges. Experts predict a positive outlook for the title sector in 2022, with approximately $7 billion in growth. Find out how automation can help gain from this market – talk to our Tech Gurus today.