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As we all know, the secondary market is where the home loans and servicing portfolios are bought and sold between lenders, banks, and investors. Lenders sell a large percentage of newly originated loans into the secondary market, where they are packaged into MBSu2019s (Mortgage-backed securities) and sold to investors like pension funds, insurance companies, and hedge funds, etc.
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Importance of Accurate & On-Time Title Searches in the Secondary Market As we all know, the secondary market is where the home loans and servicing portfolios are bought and sold between lenders, banks, and investors. Lenders sell a large percentage of newly originated loans into the secondary market, where they are packaged into MBS’s (Mortgage-backed securities) and sold to investors like pension funds, insurance companies, and hedge funds, etc. After the housing market crash of 2008, the federal government invests in about 90% of mortgages in the USA, making it a primary investor for lenders. This investment is made via government-approved agencies Fannie Mae and Freddie Mac. Fannie and Freddie set the guidelines for how the loans they buy should be underwritten. And a pool of mortgages that meets their guidelines gets sold in bulk to the government-backed entities. And the loans that don’t fit Fannie Mae or Freddie Mac guidelines, like jumbo loans, are bought by Hedge funds or private investors. All large and small mortgage lenders today are investing in compliance, technology, and workforce to ensure they meet all necessary compliance guidelines. After all, lenders need to sell their pool of loans in the secondary market to replenish their funds. One of the many areas and a prerequisite that also plays a significant role in lenders’ ability to generate good loans and quickly dispose them off in the secondary market is the quality and turn-time of the bulk title searches they receive from their service providers or title agencies.
Quickly disposing off these bulk loans into the secondary market also eases up the capital for lenders to fund more new loans. So speed plays a key role in ensuring that new business of these lenders grows fast. Lenders are unwilling to take risks with service providers Nowadays, lenders are very cautious about who they choose as a service provider for their title requirements. The primary reason for that is, they don’t want anything to hamper the reputation that they have built over the years, which might affect their ability to sell in secondary markets and eventually face default losses and block their capital in the process. They prefer to choose a service provider who can provide bulk end-to-end title and tax services, deliver quickly, is cost-effective, and provides accurate output. With operational and compliance costs soaring and profit margins declining, lenders are unwilling to take any risks for non-sell able loans. Hence, they need to have a title service provider who’s ahead of the game in terms of compliance, automation, technology, and domain expertise. Role of accurate and timely title searches Lenders usually have bulk title search requirements in investor scenarios. The turn-time and quality are of significance in this case. Third-party title service providers help title agencies in managing their bulk title search requirements very efficiently. They are practically a virtual processing arm for the title agencies; that can staff-up/down based on volume fluctuations, have the domain expertise in end-to-end title & tax processing services, and can deliver accurate output on time. Service providers and title agencies understand how important their role is in lenders closing the loans faster and with adherence to the secondary market guidelines. They know the level of scrutiny required for title searches and ancillary work that is ultimately being sold in the secondary market in the form of closed loans. They train their resources well, use a checklist based structured approach, implement newer technologies to automate processes and develop or invest in digital quality control platforms to deliver title searches of utmost quality within the required timelines. A title service provider that can help in investor scenarios Visionet is successfully supporting 6 of the 8 leading title companies with their bulk title search requirements. With its 20+ years’ experience in the title and settlement industry, Visionet delivers more than 50,000 searches a month
and adds immense value to title agencies with a unique ‘customer-first’ approach. Additionally, Visionet continually invests in building expertise to be efficient in providing title search, valuation, and QC services. With the latest technology being in the foreground of its solutions, Visionet offers AI/ML-powered D- TRAC (Digitized Title Research and Collation) solution, which helps in improving accuracy and turn-time in title search and helps process bulk volumes with ease. Some of the essential features of Visionet’s D-TRAC include – 1.Access to online data of 2000+ counties across the nation 2.Automated Tool based data extraction and auto-generation of reports leveraging AI and ML 3.Faster delivery with more than 98% accuracy 4.Ability to an on-board new client and begin processing work in just one week 5.30% faster turn times and at least 30% less costs 6.Flexible, Scalable and Reliable Operations Talk to Visionet today to explore how we can help you with your bulk search requirements in your secondary market transactions.
