Lien - Alternative Title
Over the past few years, there has been a movement from using the traditional services lenders use to originate loans, to an alternative product set. This is especially true with alternative tide products. Alternative tide products give lenders the ability to close home equity loans faster.
These products reduce title search costs, especially on loans that do not close, and allow lenders to streamline their staffs and improve efficiency. What it all boils down to is increased protection for the lender and a process that is less cumbersome for the borrower.
The products have come about because of the increased pace of home equity lending - the consumer's demand for faster loan decisions. Lenders found themselves caught in a bind: How do they close loans faster, reduce the cost of doing the loans, and still protect their second mortgage position? This leads to a growing interest on the part of home equity lenders in looking to alternative title products as ways to protect themselves and streamline the processing of these loans.
Today's competitive environment demands that lenders streamline the home equity process. Consumers expect (and receive) loans with no application or closing fees, so lenders have to find ways to come up with alternative solutions for closing loans quicker, or risk the expense associated with loan cancellations.
Consumers know that lenders are scrambling for their business. Many are applying to several institutions waiting for the first approval, and that's who gets the business.
Title alternative products move this process along, because they insure the underwritten lien position of a home equity lender. Instead of relying on tide searches, these products insure the lender against loss if any intervening liens not disclosed on the application or credit report alter the lender's position on the land records in case of loan default. Some programs also cover the lender for any loans that appear on the credit report where the lender is unable to determine whether the loan is secured against the collateral property.
Why the need for alternative tide products? Today's competitive environment demands that lenders streamline the home equity process. The factors that have the greatest potential to slow down the loan closing process (or bring it to a grinding halt) usually involve tide issues.
Largely due to mergers, takeovers and multiple ownership of banks, records are not up-to-date when it comes to clearing old liens. In some cases, loans have been paid, but title searches do not find the releases, because the paperwork to discharge the loans hasn't been properly filed.
Additional Services
Automated Valuation Models (AVM)
