Title company executives know they need to be prepared for a fast-approaching future that may look quite different from the mortgage market we’re working in today. As they work on this, two major challenges stand in the way of a smoother process. They must keep up with both fast pace and a change of pace in the market.
We wrote about this in some detail in a recent article in ALTA News
First, a hot real estate market that has been on fire for the past two years means a really demanding workload for title companies, which usually struggle to find the time to efficiently complete daily tasks and responsibilities. Low interest and limited housing inventory in desired areas have fueled growth for years, but to the surprise of many the market exploded even after COVID struck in the spring of 2020. Overall loan volumes for 2020 reached $3.8 trillion and then rose again in 2021 to over $4 trillion.
While some see the market cooling, it will take a long time to return to anything close to normal. In the meantime, lenders and their title industry partners will continue to sling data back and forth rapidly in an attempt to keep up with the volume.
In addition to a rapidly changing real estate market, the nature of the homebuyer is changing, too. The digitally connected Millennials and Gen Z borrowers who now dominate the marketplace expect a new level of service, especially related to technological expertise. They want hyper-personalization and faster closings and they have little patience for errors. This is forcing companies to update their software and configure it with borrower satisfaction in mind.
But that’s not easy when the title company isn’t in control of the functionality in the software. This can happen if the tool is closely affiliated with or controlled by one of the industry’s large underwriters.
While these firms consistently bring a lot of value to the market, the title company should be in control when it comes to their software. Furthermore, industry consolidation is putting more software applications into the portfolios of these big firms, making it harder for the title company to find a technology that will allow them to create their own workflows.
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