Small title defects can cause big problems

by Ryan Smith11 Aug 2014
Small title defects can cause big problems in the mortgage and real estate industries. Inaccurate information has contributed to wrongful foreclosures and caused stumbling blocks in the transition of assets to the secondary market.

“In the past there hadn’t been enough emphasis on making sure all the documentation and all the encumbrances that might be on a property were paid attention to, and people felt the sting of that,” said Adam Sala, deputy COO of Nationwide Title Clearing. “I think the awareness of the need for information has come up more and more.”

NTC, a research and document processing firm servicing the mortgage industry, recently revamped its website and introduced online ordering in an effort to make it easier for mortgage professionals to access title records.

“We wanted to make it available so that as people were aware they needed information – reports, things that would affect their potential purchases or sales – that we were able to provide that service,” Sala said. “There’s two distinct categories you could put this type of service into. One is where everything has been pre-cooked – everything that’s been filed on a property has been pre-keyed into a thousand different fields, and it’s been sitting in a database ready to be accessed. That’s convenient, but because it’s so much information, it doesn’t necessarily have a lot of depth. It doesn’t go back that far. We refer to that type of information as a mile wide, but only an inch deep. The downside about that is because it’s been processed by human beings, there’s the potential for human error. And because it doesn’t have a lot of depth, there are certain assumptions in the information.

“The other side of reporting is where you go straight back to the source – what’s the exact raw record in the files at the county? What we’ve done is we’ve leaned on that second side. We’re looking for the depth and the certainty of the information. That’s not to say the database information doesn’t have its time or place, but what people need is accuracy. People can’t afford for there to be even a small percentage of an error.”

That’s not an exaggeration – even small inconsistencies in wording can render a title invalid.

“What we do is, in every county and jurisdiction in the United States – and there are over 3,600 of them – we have the ability to access that county-level information,” Sala said. “We retrieve all the documents necessary, and then it goes to a person who reviews it, puts it in a summarized form and does a quality assurance review. It’s not instantaneous, because there’s actually hours of work that goes into each one, but it is thorough.”

NTC is one of the few title research firms that’s introduced online ordering with no minimum order required, Sala said.

“There’s not that many places where you can put in an online order. It adds a level of convenience,” he said. “Let’s say a large servicer might need only a small number of reports, like just 10. If they were going to work with a very large title search shop, the administrative hoopla and order minimums that would take aren’t going to be very convenient for them. We have that level of convenience, where there’s no order minimum. They can simply place a few orders or as many as they want, but be able to bypass the larger account setup features. They get instant access to the service. And it’s been successful. It’s as easy as putting in the order, and it just gets started right away.”
 

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