The title industry is among the central processes in mortgage – unfortunately, it is also one of the most inefficient.
When a property owner purchases, sells or finances a new real estate, it generates a record or a title. This contains various key details of the ownership status such as disclosed/undisclosed heirs, suitability for insurance, restrictions and allowances, any existing liens, etc. Whenever a mortgage is renewed, processed, or serviced in any way, it requires an efficient title process capability. Homeowners must also mandatorily purchase title insurance to protect against any errors that may arise in record keeping.
Now, as you might have guessed, this is a highly effort-intensive process that relies heavily on manual intervention. A title agent has to manually perform a search, and even the most experienced professional can sometimes overlook errors, which causes compliance and servicing challenges.
Title law also differs from one state to another, which makes the process even more complex to maneuver. Nearly every step in the title functionality can be automated to an extent. Due to its repetitive and data-heavy nature, title processes are a prime candidate for automation.
How Does Title Process Automation Work?
The first step towards title process automation is to transform paper-based workflows.
Most records and documents are maintained in hard copy form, or, at best, are converted into scanned image files. This means that when an agent runs a search, they have to manually look up information snippets from releases, deeds, liens, judgments, etc., even if they exist in an image file soft copy.
Mortgage businesses must urgently adopt digitalization and standardization of title documents to unlock the full power of automation. Once this is in place, the process of regularly updating and cleansing data records must also be automated. This will save thousands of person-hours in efforts, particularly in a fast-changing legal and regulatory environment.
In the final stage of title process automation maturity, mortgage businesses can adopt cognitive tools like artificial intelligence (AI), machine learning (ML), natural language processing (NLP), and optical character recognition (OCR). This will make room for a greater number of exceptions while making sure there is standardization.
The Title Process is a Prime Candidate for Automation
As mentioned, various stages of the title function can gain from automation technologies. This includes:
1. Title production
Title production involves the issuance of title policies – which may have sub-tasks like running custom searches, examining the title product, aligning with title laws, collaborating with underwriters, and so on. During this phase, mortgage businesses may use robotic process automation (RPA) bots to perform a wide range of tasks such as data transfers from one system to another and automated queries.
2. Title task tracking
As a task moves from one system to another, one stakeholder to another, or from one stage of completion to the next, you need to monitor it carefully. An automated bot can synchronize with the various technologies and storage systems in use to alert you to status changes. Title agents can receive notifications in real-time to minimize delays in processing.
3. Automated reconciliation
Bots can aid in the reconciliation of transactions and data corrections wherever necessary. For example, if there is a document update on one system, it needs to be reconciled across the entire mortgage process landscape without any duplication or errors. A bot can quickly perform this activity with little to no human effort, making sure to alert the agent in charge of any automated updates.
4. Commitment preparation
The title commitment is a comprehensive and exhaustive list of all the details surrounding a mortgaged property. It also acts as a guarantee for title insurance issues. Typically, mortgage businesses outsource commitment preparation – but this alone cannot reduce headcount, optimize effort, and control errors. You can combine outsourcing with mortgage RPA to ensure 100% Schedule A and Schedule B accuracy throughout the commitment preparation process.
5. Borrower communications
Title process events have a significant impact on the borrower and must be communicated clearly in a timely manner. RPA bots can put together detailed communications on title status, discrepancies, fees, and action points for the borrower if any. You could even automate the communication process by connecting title process automation with a digitally-powered front office.
6. Title search
Search automation is among the top use cases when transforming the title process. An RPA bot can allocate information based on a variety of parameters such as property address, the assessor’s parcel number (APN), legal descriptions, etc. It can then retrieve the relevant elements of the document for analysis. Using OCR, it is possible to analyze even scanned image files, screenshots, and PDF attachments for data. The bot will then assemble the retrieved information into a consolidated search response.
Ready to Discover the Benefits of Title Process Automation?
There are two main reasons to automate title processes in 2022 – speed and accuracy.
At a time when borrowers are less and less familiar with paper processes, title documents are rife with errors like missed signatures and incomplete data fields. Automation identifies and corrects these errors to ensure accuracy, with minimal disruption to the end-to-end mortgage process. And, it does this at an exceptional speed. At Nexval, our title automation solution shrunk turnaround times by 60%, even as manual efforts were reduced by 75%.
Mortgage businesses need to urgently relook at legacy inefficiencies in their title process and address them to keep up with the needs of the digital era. Nexval uses purpose-built AI technology and 40+ mortgage automation tools to streamline the title business. This helps lenders do more with less, discovering new efficiencies at every step of the mortgage lifecycle.
Talk to our Tech Gurus at a time of your convenience to discover the benefits of title process automation.