3 Things You Need to Know About Instant Underwriting
Did you know that fewer than 10% of all properties in the US has a title defect? Despite this, underwriters pay title agents to do an extensive search, examination and cure on 100% of the orders they receive. For over 100 years, title insurers’ approach to risk has been to completely eliminate it before underwriting a policy. Eliminating risk requires days (and sometimes weeks) of manual document review and clearance. Seems like a lot of wasted effort, doesn’t it?
Do you know who is paying for that effort? Your borrowers – in the form of longer closing times and higher closing costs. In a world of smartphones and self-driving cars, this inefficiency seems insane. State Title was founded to address this inefficiency and in 2018 we introduced Instant Underwriting, which we believe to be one of the biggest innovations to hit the title and escrow industry since wire transfers.
Instant underwriting is a giant step towards our ultimate goal – seamless title and escrow – which will mean less work for your processing teams and a better experience for your borrowers. Instant Underwriting is such a radical departure from the way title is handled today that everyone, from mortgage executives to loan processors, has questions. Here are three commonly asked questions about Instant Underwriting, and how we answer them.
How do you “instantly” underwrite?
States Title is pioneering the use of predictive analytics in the title industry, in many cases reducing a 5- to 10-day process down to minutes. Once you place an order you will get a title commitment – an entire title package, in fact – delivered to your email inbox and into your LOS in minutes.
When you place your order we immediately collect hundreds of pieces of data about the property – some public data, some we pay for – then run those data points through a risk model and within a few seconds have determined whether this property falls into the safe bucket or the risky one. For properties we deem safe, we issue a title commitment instantly and deliver it to you within a minute. For properties our model tells us could have a title issue, we do a traditional title search.
Who generates the title package?
An underwriting decision is not the only thing you get back in minutes; we also leverage technology to quickly get you everything else you need to get to clear to close.
The title package you get back from us will include a list of outstanding mortgages, a 24-month chain of title, a tax certification showing property tax status, the latest recorded deed of trust, a signed closing protection letter and wiring instructions.
The only work remaining is to order payoffs and subordinations, work with us to get to a final, balanced closing disclosure and schedule the closing with one of our mobile notaries.
Are you approved?
After developing our risk model, we worked directly with the government-sponsored enterprises (GSEs) to get the agencies comfortable with our approach. In late 2017, after a year of in-depth review and stress testing of our model, we were granted approval to use Instant Underwriting, with assurance that they’ll buy any otherwise conforming loan with a States Title policy attached. Our existing customers have had no problems with the secondary markets, and you won’t either.
You also won’t have problems with claims. We will not employ a “delay and deny” approach to claims. Rather, States Title prefers to do what insurance companies are paid to do – resolve claims in a timely and transparent manner. From getting a title package in minutes to getting your claims paid in industry leading timeframes, States Titles is changing the way the title industry works.