Taking a page from the playbook of a fintech upstart, the nation’s largest title insurance underwriter is making an automated title decision engine available to title agents, enabling them to offer same-day title decisions on eligible mortgage refinancings and home equity loans.
First American Title Insurance Co.’s decision engine, Clear2Go, automates title search, document collection and title examination. Based on technology the company has used internally to process more than 1 million residential refinance and home equity transactions, Clear2Go’s title commitments “are backed by First American’s underwriting rules and vetted against the industry’s largest and most comprehensive collection of property and title data resources,” the company said.
“Clear2Go is another example of First American’s commitment to leadership in the digital transformation of the title and settlement industry,” First American Title’s Evan Zanic said in a statement. “Our title agent customers can benefit from proven technology that has powered our own title production, helping them reduce costs, enhance efficiency and improve their customers’ experience.”
Although it’s only captured a small fraction of the market so far, rival title insurer Doma has made waves by offering “instant underwriting” of title insurance for mortgage refinancing, and streamlined remote and digital closing and escrow services for all types of mortgages.
Doma uses a predictive algorithm to assess the risk that a home’s title has unresolved liens or ownership issues, which in most cases allows it to skip the process of searching historical property records. Doma — which went public last month via a SPAC merger — counts Chase, Fairway Independent Mortgage, Homepoint, PennyMac, Sierra Pacific Mortgage and Wells Fargo as enterprise clients.
First American Title claims that, “Unlike other solutions, Clear2Go was designed to meet applicable state-level title plant requirements by including title plant data obtained from First American’s unmatched title plant coverage.”
Pilot tests with First American title agents “have validated Clear2Go’s ability to accelerate the title production process while reducing costs and improving customer service,” the company said. “Clear2Go can also help title agents enhance the efficiency of their title production workflow and staff by segmenting title orders by complexity, allowing title agents to direct title orders to the appropriate staff members.”
Founded in 2016 as States Title, Doma acquired its title plants in 2019 when it purchased North American Title Company and its insurance underwriter, North American Title Insurance Co., in a deal that expanded its geographic footprint to close to 80 percent of the market.
Doma says the machine learning and natural language processes it’s developed for escrow and closing also reduce the need for people to perform repetitive tasks when processing documents and emails, reducing errors and saving time and money.
The company says it can provide instant underwriting of title insurance on about 80 percent of refinancing transactions, and is working on bringing that capability to more complex purchase transactions by the end of the year.
“We’re quite confident we’ll be rolling out our entire tech stack for purchase later this year,” Doma CEO Max Simkoff told Inman in July, when the company announced Fairway Independent Mortgage as a new client. “The question is what percentage will qualify for instant underwriting.”
A First American spokesperson told Inman that “enhancements to Clear2Go, including the ability to support purchase transactions,” are underway.
First American Title is the nation’s largest individual underwriter by market share, capturing 20.5 percent of title insurance premiums written during the first quarter of 2021, according to data compiled by the American Land Title Association.
Collectively, the Fidelity National Financial family of companies, which includes Alamo Title Company, Chicago Title Insurance Company, Commonwealth Land Title Company, Fidelity National Title Company and National Title Insurance of New York, have the biggest market share, with 32.9 percent of the $19.2 billion in title premiums generated by the industry last year.
In an investor prospectus, Doma said it estimated that the company had less than 1 percent market share of the title, escrow and closing market in 2020, but projected that retained premiums and fees would hit $226 million in 2021 and grow to between $1 billion to $1.5 billion in 2025.
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