It’s 9 a.m. on a Wednesday morning in mid-September, and Lynn, an escrow officer, sits down at double monitors with a large cup of coffee. With several mortgage loans from one of the company’s top lender customers awaiting processing, she’s going to need it.
Lynn opens her email, and downloads and opens a file on one monitor. Identifying the document as the lender’s closing instructions, Lynn then opens the settlement statement in her title production system (TPS) on another monitor. She then takes the time to “stare and compare,” sifting through both documents, line by line, to manually enter data into the title production system. After doing this on dozens of pages, she double-checks each field on every page to ensure that all data has been inputted correctly.
Lynn finishes the file and returns a completed Closing Disclosure via an email attachment to the lender, then moves on to the next order. Later that day, the lender returns the file, noting several errors that need to be corrected and fees that need rebalancing. Another two hours passes while Lynn repeats most of this tedious process. She shuffles off for a much-needed coffee refill, realizing the end-of-month crunch looms ahead. Meanwhile, the loan processor at the lender impatiently waits for delivery of a new – and hopefully, final – Closing Disclosure so the closing can proceed on schedule.
What Lynn and thousands like her do multiple times a day is the laborious, arcane practice known as fee collaboration or reconciliation. Long overdue for innovation, this antiquated mortgage closing process is the motivation for the release of States Title’s latest solution, Instant Closing Disclosure. Released on September 17, Instant Closing Disclosure leverages machine intelligence to return a completed settlement statement to lenders in under a minute.
As the only title company that uses patented machine intelligence technology to make closing a mortgage more efficient and affordable, we have taken a massive leap forward to reach our vision of an instant closing experience,
said Hasan Rizvi, Chief Technology Officer at States Title.
With traditional title companies, a lender sends a Closing Disclosure to the title company, then waits several hours before receiving a completed settlement statement back from the title associate. During that time, a title associate like Lynn manually copies and enters data into the title production system, then painstakingly examines each field – in what is infamously known as a task called “stare and compare” – to ensure all data has been entered correctly. This process may need to be repeated three to four times for each file, due to small changes or issues that occur in the transaction.
In contrast to the traditional process, States Title’s Instant Closing Disclosure uses machine intelligence – specifically, natural language processing (NLP) – to automatically extract and interpret unstructured information from Closing Disclosure documents, parsing and transferring data including loan amount, borrower proceeds, Closing Disclosure data, fee type, and description.
Once the data is extracted and all fees are automatically reconciled, the service runs an automatic quality check on the Closing Disclosure and at the same time notifies the lender of potential issues. It then instantly generates and sends the completed settlement statement or structured fees back to the lender.
“Instant Closing Disclosure eliminates manual and error-prone work, and automatically reconciles the fees from any lender’s Closing Disclosure with the fees in the title production system,” Hasan said.
One of the notable features of States Title’s solution is that it is vendor-agnostic. While other fee collaboration and reconciliation tools in the market require the use of specific loan origination software.
Instant Closing Disclosure lets the lender work within their preferred technology provider and requires no changes to their current workflow or documents.
“This was a key principle for us during the planning stages,” Hasan said.
Knowing there were easy and hard paths to take to solving this, we decided to take the hard path – ensuring our lender customers could receive value and benefit from our product offering without any changes to their systems.
Instant Closing Disclosure alleviates common pain points felt by both title and escrow processors and lenders, making the closing process more satisfactory and efficient for both parties.
Delivery of the settlement statement to the lender occurs in under a minute, rather than two hours. In one customer’s case, Instant Closing Disclosure delivered to the lender a complete, accurate Closing Disclosure form within one minute on 33 percent of transactions.
“For title processors, a current pain point is the amount of time required to complete the settlement preparation step,” said Katie Matson, Operations Manager for States Title. “We solve this because our product enables them to spend less time manually reviewing, reconciling, updating, and validating fees. They can then process more files, in less time.”
For lenders, a common challenge is context switching – exiting and re-entering a file and assessing the actions that must be completed next.
“Context switching wastes time and is inefficient,” Katie said. “This is solved with our product because they can stay in the file and therefore reduce the time spent on context switching. Another pain point is that fees are often balanced incorrectly, requiring the balancing process to be redone or restarted. This is also solved by the accuracy of our system.”
Home Point Financial, one of the nation’s leading mortgage lenders and servicers, experienced a significant drop in time to complete the closing process with States Title.
“At Home Point, our goal is to provide customers with a mortgage experience that is simple, straightforward, data-driven, and can be completed quickly – in accordance with their expectations,” said Willie Newman, CEO of Home Point Financial. “Instant Closing Disclosure, along with Instant Underwriting and States Title’s service model, are helping to make that a reality in a space that’s been long overdue for innovation.”
Find out more about how machine intelligence and our efficient service model can help transform your lender operations.