At the onset of the pandemic in March 2020, the residential mortgage market took a sharp downturn in response to lockdown measures designed to curb the spread of the coronavirus. Now, just a few months later, the number of mortgage applications for purchase is bouncing back (and is 3% higher than it was a year ago in September 2019). Meanwhile, refinance applications are at their highest levels in 7 years. These fluctuations and the uncertainty surrounding the likelihood of a COVID-19 vaccine create an unpredictable real estate market.
Technology can be a stabilizing tool to manage the ebbs and flows of a variable market. Qualia spoke with David Townsend, CEO of Agents National Title Insurance Company, to discuss how automation can be leveraged to help title & escrow businesses find stability. Agents National recently released a new automation tool for title agents called REalSearch. The system uses machine learning to help examiners clear title decisions on refinance transactions in as little as 45 seconds.
How does automation apply to title & escrow businesses?
Automated solutions in the title & escrow space intelligently leverage data and content to perform a number of repetitive functions. For example, automation may highlight risk areas, extract data, or verify information to complete certain tasks.
In the context of a title examination, automation enables title examiners to focus on files that require more in-depth investigation. Agents National’s REalSearch solution is designed to empower teams and be used as a tool to capture low-hanging fruit. “[Automation] doesn’t replace the examiner,” Townsend said. “It allows them to work on more complex files that normally may have fallen through the cracks while the examiner spent energy working on less complicated files.”
Automated solutions: a healthy investment during uncertain times
As referenced earlier, over the past few months, the real estate market has experienced ebbs and flows for purchase and refinancing. Townsend believes these volume fluctuations can be managed more efficiently through technology. “Instead of worrying about volume, [automation] can provide load balancing for agents,” he said.
With automated solutions, title & escrow professionals can move from completing a few files per day to completing dozens of files per day. Instead of spending time examining a document for “red light, green light” criteria as Townsend put it, a title examiner can put their time toward more complicated issues within a file. In this sense, title examiners validate data and information instead of doing research from top to bottom.
Automation is also particularly powerful in reducing risk which has exponential cost benefits. Automation helps examiners manage higher volume without compromising on quality. With lower claims rates comes less money spent. “Right now, we can’t train people fast enough to be examiners,” Townsend said about the current increase in refinancing and purchase volume. “With automation, we can avoid the issues we experienced in the early 2000s where we had an increase in volume and not enough staff. This resulted in extremely high claims rates from 2009 to 2011.”
Integrations: the holy grail of automated solutions
Townsend believes that cloud-based integrations are an important step forward for a fragmented industry. “There should be an easy trade of data [between title companies and title insurers].” he said. “As our industry becomes more modern with cloud-based technologies, we can do that.”
Integrations and automated solutions make it easier for title professionals to access the data and content they need within one system. For example, the Qualia and Agents National integration allows title agents to work directly from their core software to retrieve policy jackets from their title insurer. For Townsend, this is particularly valuable. “We have never issued a paper policy packet,” he said. “ We’ve always been 100% online and we were the first underwriter to do so.” An automated, integrated system allows Agents National to keep its paperless system and eliminate any re-keying to produce the policy jacket.
Moving forward with certainty
While the events and circumstances surrounding COVID-19 are certainly devastating, there may be a small silver lining: The real estate industry is resilient and these events will undoubtedly bring forward innovations that will leave a lasting impact on the housing market. “We have systems that create efficiencies we didn’t have 15 years ago,” Townsend said.
Title & escrow businesses, lenders, title insurers, and vendors will begin to leverage automation and integrations as a way to bring stability to their operations, and these solutions will help draw real estate professionals together for more streamlined and efficient transactions.