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SAN FRANCISCO, Calif. -- July 5, 2022 -- Qualia, the leading digital real estate closing platform, today released the results of a new study, "Quantifying Inefficiencies of the Mortgage Settlement Process". The study is the first of its kind to quantify the challenges and bottlenecks faced by lenders and title companies when working together.
The study, conducted by STRATMOR Group --- a data-driven advisory firm specializing in the mortgage industry --- polled lenders on their current working relationships with title companies. The results showed significant inefficiencies and untapped opportunities to optimize workflows between lender and title teams.
The results revealed that one of the biggest challenges lenders face when attempting to operate efficiently is the sheer number of title companies they need to work with. 1 in 4 lenders said they work with more than 100 title companies in a given month. In purchase markets, when lenders are not traditionally more involved in title selection, this forces lenders to adjust to many different workflows and can create significant issues in mortgage closings. 1 in 4 lenders respondents also said they spend more than 75% of their time communicating back-and-forth with title companies.
"This data highlights just how hard it can be for lenders to balance so many closing partners," said Brian Thome, Vice President of Customer Success at Qualia. "Lenders are lacking control and visibility over the closing process which inhibits their ability to identify bottlenecks and improve the process."
Lenders reported using tools such as online portals and various point solutions to streamline operations. However, the study revealed that adoption of those tools may still be below what is needed. For instance, despite having a variety of new tools to use, most lenders still indicated that email was their most frequently used tool to engage with title companies. The survey found that a quarter of lenders were still making more than 30 calls or emails per loan.
"The continued reliance on phone calls and emails tell us that existing point solutions aren't yet providing the pain relief lenders and their title partners need," said Thome.
Insights from the survey also revealed:
98% of lenders agree that coordination with title companies is "important" or "very important" for borrower experience
Lenders reported a lack of visibility and control over the closing process. Eighty-one percent of lenders reported that they do not have tracking in place for title status, 73% did not have tracking for response to fees and CD review, and 69% did not have tracking in place for turn times to deliver commitments.
When asked to rank which factors have the greatest negative impact on borrower experience, lenders most often ranked "unexpected closing delays" as the number one contributing factor.
Lenders are significantly more pleased with title companies they work with on a regular basis. The majority of lenders (63%) rated the efficiency of title companies they work with regularly a 7 or higher on a scale from 1 to 10. Meanwhile, the majority of lenders (89%) rated their efficiency with title companies they work with infrequently 6 or lower.
Qualia commissioned STRATMOR to gather third-party, quantifiable benchmarking data to better identify, understand, and illustrate challenges within lender-title operations. The survey was conducted between March 1 and 14, 2022. The respondents include 74 lenders, including respondents from banks, independent mortgage brokers, and credit unions. For more information or to view the full results, download the report here or visit Qualia Insight.
Qualia is the leading comprehensive digital closing platform used by title, escrow, real estate and mortgage lending professionals to transform home buying and selling into simple, secure, enjoyable experiences for millions of homeowners each year. The Qualia platform provides a system of record for the real estate settlement ecosystem, on one secure operating system, through a suite of workflow, accounting, reporting, and communications products as well as its expansive product and service integrations. Qualia is headquartered in San Francisco, CA and has offices in Austin, TX, and Superior, CO. For more information on Qualia, visit www.qualia.com.