CLOSING: A Key to Profitability?
Filed under: Closing, Post Closing, Quality Control, Quality in Lending — admin @ 9:53 pm
One of the biggest objections I find to using fulfillment services such as those offered by Titan’s is control over document production. At Titan, we require control over the document production process as this is one of the defining moments in a loan’s life. As many lenders know, the production of loan closing documents and the overall facilitation of the closing process often times has the single most significant impact on post closing performance to include warehouse line management and timely investor purchase turn times. Not controlling this process would make it impossible to provide meaningful service reps and warrants.
Most of our potential clients have gotten used to producing docs, even as a broker, and cannot fathom why we would want or need to take that level of control away from them. Let’s face it, as a service company you’d be insane to rep and warrant what you can’t control. Looking at the market today, there are very few outsource fulfillment companies left that will “only” do post-closing. It is specifically due to the fact that without controlling the closing process, you are endlessly cleaning up small, yet significant mistakes. Mistakes, that if caught in the document and closing process, would have taken only moments to resolve at the time; now consume time and money for days in post closing. Not controlling the closing process means that you are cleaning up other people’s mistakes. And right, wrong, or indifferent, these mistakes roll down hill and fall onto the shoulders of the last person to touch the file. It’s no longer an issue of who or how the mistake was made, but how long it has taken to clean up and clean up always seems to take longer than expected.
Today, there are innumerable doc engines that will produce a doc set for a closing in a matter of minutes. However, many clients are not aware that there are relatively no reps and warrants for the accuracy of those document packages specific to investor programs and requirements. With few exceptions, the client is totally reliant upon the infallibility of the doc engine and in-house expertise and experience to not expose them to purchase issues or warehouse line loss. In addition, the lender is also reliant upon the accuracy of in-house data entry. “In-house” there are no reps and warrants against losses from poor employee performance or lack of experience.
When using these doc engines, it is important that the lender employ an experienced closer. Not a processor that knows how to use a doc engine, but an experienced closer. The fact is most problems for both purchase and repurchase happen in closing. An experienced closer knows that document production is the easiest part of their job. The work they perform on the closing and funding audit to ensure accuracy, compliance, and adherence to the Final Approval Clear to Close are the real work in closing. And, it is a true fact that it is almost impossible for a processor to audit themselves.
Here at Titan, we are able to produce figures for the settlement agent prior to receiving the Final Clear to Close Approval. This enables our lenders to disclose fund requirements to the borrowers well in advance, securing their customer’s confidence in the transaction. While the lender continues toward their Final Clear to Close Approval, we simultaneously perform an impartial 3rd party audit of the file, complete verbal verifications of employment and the necessary compliance and fraud checks needed to produce a clean and timely disbursement. All work in unison to produce and deliver documents to the settlement agent when expected. At Titan, we have the option of being able to accomplish the meat of the closing work, even as we are waiting for the Final Approval to send live docs. Experienced closers allow Titan to perform with agility not only for the borrower, but for the lender, ensuring a purchasable loan package.
Stumble it!