With lender partners facing increased scrutiny and regulatory oversight, title agents are thinking of ways to assure them they chose the right title provider to work with. Much time and energy has been spent developing ways to provide this assurance, but one part of the answer could almost be overlooked — the submitting of the policy to the lender.
During a recent October Research webinar, Title Liability Issues: Creating a Protective Fortress, George Houghton, group president, agency operations, Stewart Information Services Corp., spoke about lender frustration over missing title policies and how agents could do better with getting policies to lenders in a more timely fashion.
“Not that interesting of a topic, perhaps, but it’s important,” Houghton said. “I would tell you that all of the underwriters have tens of thousands of policies that the lenders are saying they haven’t received. We have to improve on the methods by which we distribute our product and the timeliness of that.”
Houghton said that in the past, auditors didn’t necessarily include a metric for when the title policy was delivered in their report. This will become a basic part of audits going forward, however.
“It is important to the lenders and to the regulators that we deliver our products on a timely basis,” he said. “That means no more than 30 days after the closing and funding. But, if a lender asks for the title policy in five business days, … I think we need to be ready, willing and able to deliver the product, unless it’s an unreasonable standard. Then we have to comment back. We need to be able to deliver the product as your customer has requested us to do so.”
Houghton said lenders are frustrated with having missing title policies. They are even developing score cards for policy delivery. This is because they are unable to sell incomplete loans and are subject to audits by numerous agencies.
“They are wary of the fines and the reputational risk,” Houghton said. “That is why they want to have title policies sooner.”
Houghton said these things to make sure agents stay in the distribution cycle.
“That is my main goal, is to keep the independent agent network in the distribution process,” Houghton said. To do this, he said agents must improve service levels, enhance their reputation and remain competitive.