Aaron Davis is CEO of AMD Enterprises, a conglomerate of title, technology and eClosing ventures that includes Florida Agency Network, ClosingSuite.com, Premier Data Services and Network Transaction Solutions. He is also a frequent speaker at title and mortgage industry conferences and seminars, and often serves as a contributing author or expert source to numerous trade publications on issues pertinent to title and mortgage executives. You can reach him at aaron@amd-1.com.
Jonathan Kearns is MISMO Vice President of Technology. Recognized as a thought leader in the mortgage technology space, he has substantial experience developing technology and product strategy, including over a decade of experience with electronic signatures, eVault’s and the eClosing process. Previously, he was Senior Vice President of Technology with DocMagic Inc., was responsible for its digital mortgage platforms.
It’s been a hot topic for years now. So it’s hard to believe that digital closings are still not the preferred means of conducting a home closing, although the rate of adoption continues to accelerate.
The American Land Title Association’s 2022 Digital Closing Survey indicated that 62% of companies offering Remote Online Notarization expected the number of RON closings to increase. Furthermore, 65% of customers experiencing RON closings had a positive perception (up from 60% the previous year.) We also know that almost half of the closings performed right now are done digitally. In fact, one lender we know is already doing approximately 70% of its residential mortgage closings digitally. Digital closings are catching on both on the origination and the settlement ends of the transaction, even if not quite as quickly as originally anticipated.
Nevertheless, almost three years after the pandemic made remote meetings and WFH commonplace, every other closing continues to be conducted in-person. There are a number of possible explanations for this, but they are dwindling in number. As to the case for adopting digital closings, the obvious explanations (speed, efficiency, cost) remain. And now, even more equally persuasive reasons are emerging as well.
We know digital closings, for which RON can be an important element, are cheaper, faster and generally easier. We know they tend to be more convenient for all parties involved. We know the digital process eliminates travel time and increases efficiency for lenders and title firms alike. And yet, some resistance remains. Digital closings are not yet the primary means of settling residential real estate transactions.
Recently, a MarketWise survey reported that lenders using a hybrid eClosing process realized a 99 minute reduction per loan. Lenders using a full eClosing, including online notarization, saved 157 minutes per transaction. Overall, the same lenders indicated that digital closings had saved them up to seven days in the processing and funding cycle, as well as decreasing their cost per loan by $174.
We’ve also seen the mountains of evidence demonstrating that consumers prefer the convenience of not having to travel to a closing destination or even host closing or notary agents in their own homes. While there is some evidence that homebuyers do want a personal touch and human expertise involved in the transaction, there are numerous ways to align this preference with the effectiveness of a digital closing.
And then there’s the reality that, in utilizing RON and digital closings, lenders and settlement firms alike realize time savings that allow them to redeploy staff to other areas of need, not to mention the tangible cost savings of eliminating travel from the process. Instead of time and money expended on things like travel, logistical coordination and even error (“Where’s the closing again?”), digital closing professionals can execute a legal, effective closing from their own homes or offices in under 20 minutes.
The evidence is overwhelming, and the reality is evident. Digital closings can be a significant path to transforming and improving a cumbersome loan origination and home buying process.
But beyond the evident reasons we have explained, there is perhaps an even greater case for why our industry should fully embrace the digital closing. Recent market volatility and uncertainty have introduced another factor into the equation, but not one that’s entirely new to the mortgage industry. History shows that our industry has been one to ramp up its staffing in times of high origination volume, then eliminate those costs via layoffs when volume dips. The result is temporarily high costs and inefficiency during those transition periods, especially when volume again spikes before firms can recruit, restaff and retrain, leading to poor operational capacity and even lost revenue.
Scalability is increasingly becoming a core goal for lenders and title businesses alike. Stung by the unforeseen volume surge of 2021, where operational inefficiencies became glaringly obvious, many firms, even during the current downturn of volume, are investing in their operations to make their capabilities scalable. The goal is to be able to do more with less, utilizing a relatively stable and scalable workforce supplemented by technology.
Could there be a more effective means to that end than the adoption and mainstreaming of digital closings?
Consider, also, how much time and labor are expended on post-closing tasks which might be necessary, but are hardly revenue centers to an operation. For example, the exchange of the transactional package once took days to be mailed or shipped from the site of the closing to the title agency and on to the lender. Not to mention the cost of shipping or postage and possibility of delay or even loss. Digital closings, however, dramatically speed the doc prep and delivery processes. The package arrives where it needs to be with the click of a mouse, instantaneously.
In the past, the typical title or settlement firm required a small army of trained personnel to prep a package for delivery for sale onto the secondary market. That tended to involve stacks (literally) of paper documents, hours of “stare and compare,” and the real possibility for error as staffers applied the secondary market guidelines to manually closed packages. Now, following the introduction of electronic processing systems, we know of title agents who use one or two employees to shepherd the post-closing process, including QC.
Similarly, the secondary market is increasingly embracing the reception of eNotes. The speed, reliability and, most of all, dramatic improvement in QC—including the fact that eNotes can be auto-certified—are all welcome developments for a market that depends upon speed, reliability and accuracy.
Although progress has been a little slower than some initially expected, especially after the lightning-strike gains in adoption during 2020, there’s no doubt that digital closings are becoming the preferred means of settlement. And as additional barriers to adoption are reduced or eliminated, we’ll increasingly see the pressure for adoption not only coming from lenders and consumers, but service providers and even the secondary market as well. There are too many reasons in favor to be ignored any longer.
In the end, however, the digital closing is a far better, safer and more practical settlement solution for the consumer. We still hear words like “archaic” being used to describe the homebuying process. At the same time, consumers virtually glide through streamlined purchase or borrowing experiences such as auto leases, personal loans and just about any type of retail good available. So why do we still compel people to take time from work or life; travel to a location which may or may not be convenient to them and pick up a pen to wet sign hundreds of documents—especially when the ability to log in; click and buy/sell is right in front of us?
The American Land Title Association (ALTA) recently honored FAN’s CEO, Aaron Davis, by appointing him to the Board of its Good Deeds Foundation.
The foundation was launched in 2020 to bolster the charitable efforts of ALTA members. Land title insurance professionals can apply for grants on behalf of recognized 501(c)(3) organizations that they support financially or through volunteer efforts; preference is given to housing-related charities.
Aaron was singled out for a number of his charitable efforts. He is an ALTA member and a past board member of the Florida Land Title Association. You may also recall that he took a temporary leave of absence from his business and volunteered in Harper, Texas, following severe winter storms in February 2021. With Davis’ support, the ALTA Good Deeds Foundation awarded the Harper Volunteer Fire Department a $5,000 emergency grant during the time of crisis. He also has been recognized by national media outlets, including People Magazine and The Kelly Clarkson Show, for his charitable service assisting Harper and other communities, including several in Southwestern Florida after Hurricane Ian, Aaron was also awarded the 2021 October Research Philanthropy Award.
Aaron joins some of the title industry’s most prolific leaders on the Foundation, including Westcor’s Mary O’Donnell; Cynthia Durham Blair of Blair, Cato, Pickren, Casterline LLC; FNF’s Steven Day; First American Title Insurance Company’s Donald Kennedy; Richard Welshons of DCA Title and ALTA’s Diane Tomb. Appointed along with Aaron, Orange Coast Title’s Bill Burding joins the Board as well.
“It is a genuine honor to be asked to serve as a member of the ALTA Good Deeds Foundation Board,” Davis said. “The title industry has been incredibly generous to me throughout my entire career. So it’s humbling to be asked to serve alongside some of the industry’s most respected and charitable leaders. I appreciate the opportunity to serve the Foundation and to continue supporting the charitable efforts of our members.”
Congratulations, Aaron!
The team at FAN wishes all of our readers, clients, partners and friends a very Merry Christmas and a joyful holiday season. And while the next couple of weeks are a great time to relax, catch up with family and friends and even reflect on all we are grateful for, it’s also a good time to gear up for what should be a very competitive 2023 in our industry.
We’ve repeatedly said that although the downturn we’re experiencing is very real, and the consequences and impact have been painful, there’s also a very real opportunity for title agents and real estate professionals in 2023. The seemingly complete standstill the market’s experiencing today won’t last all year. And some businesses will be increasingly available as we move into the year.
At least, for those strategizing on how to win it and willing to work together.
Here’s how FAN and our family of brands will be working together with mortgage lenders, real estate brokers and agents and other title agencies in 2023 and beyond.
We’re a lot more than just a title agency or closing firm here at FAN. We pride ourselves on our ability to collaborate with businesses of all types for mutual benefit. For lenders or even partner title agencies, that means serving as one of the nation’s top RON and digital closing providers (we’re the top provider in Florida and are growing rapidly in Texas as well). By the way, not every title agency is SOC 2, Type 2 compliant—something mortgage lenders and underwriters are increasingly counting on at a time when cybercrime is a very real threat to all of us.
We’re also happy to share our experience and expertise with real estate agents, brokers and other title agencies so that we all can succeed. That can mean helping a growing title agency in the Midwest by partnering with them as they enter the Florida market. It can also mean offering a specialized partnership to provide a spark to Florida title agencies struggling in these marketing conditions.
Of course, lenders, real estate agents and, most of all, buyers and sellers all appreciate a smoother, streamlined closing after a faster settlement process, as well as the convenience and cost savings of a remote notarization or online closing. FAN blends its all-star team of closing personnel with centralized resources and effective technology to make this one of our biggest strengths.
We can also share back office resources, technology and IT services for any title business seeking to reduce expenses and improve scalability in a volatile market—especially if we do see some kind of order spike as the year goes along. For those seeking experienced strategic advice as they prepare to streamline their operations, we can make available resources and experienced, executive-level consultants who have successfully been there and done that for decades. We can help you avoid blind alleys or unnecessary mistakes as you assemble your plan to maximize your efficiencies and profit margin. We also know more than a little about building compliant JVs in the Florida market…as well as what happens when a JV is not properly assembled (as we see far too often).
Let’s make 2023 a year of “cooperation.” Those who are willing to collaborate could very well find in that partnership a competitive edge, which could make all the difference in the hunt for market share.
According to the Mortgage Bankers Association, mortgage credit availability decreased in April for the second month in a row.
Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting said mortgage credit availability fell as lenders reacted to the jump in mortgage rates over the past two months.
With home prices still escalating. interest rates going up and lending standards tightening, can mortgage fraud be far behind?
In its Q1 2022 Quarterly Mortgage Fraud Brief, CoreLogic reported a large drop in loan volumes, combined with a subsequent decline in lower-risk refinances are driving an increase in fraud risk. Significantly, the year-over-year trend is up 15% from Q1 2021.
With interest rates on the rise, CoreLogic opined that commission-based loan officers and borrowers desperate to finalize transactions before rates go higher could be tempted to engage in riskier behaviors to get the deals done.
One of the chief lessons we learned from the 2007 mortgage debacle is the importance of being vigilant as market fundamentals become more uncertain. Perhaps this is the perfect time for a refresher course on mortgage fraud schemes for your staff.
We know now that lenders, appraisers and title agents were acutely aware of problematic transactions coming across their desks in the mid-2000s, and while many pushed back, raised red flags, and reported the abuses, the sheer volume of abuses made the eventual train wreck inevitable.
But we don’t have to go down that road this time. We can begin now to reeducate ourselves about schemes and scams out there.
According to the FBI, here are the most common types of mortgage fraud:
Lenders are much more astute at confirming the data that comes to them. Title agents are specifically educated to look for issues in the chain of title and to identify fraudulent deeds, powers of attorney or identification.
But everyone who is part of the transaction has a responsibility to be alert to questionable situations in a real estate transaction, and this may be the best time to start raising awareness with your staff.
Giving back to our community has always been part of the FAN mission. In recent years, the community need has only increased. FAN believes we all should pitch in whenever we can—successful businesses have an obligation to keep their communities strong. It’s also why we wholeheartedly support the ALTA Good Deeds program.
One of our many favorite ways to contribute to our Florida communities is through Habitat for Humanity. Recently, a number of FAN employees turned out, as we do regularly, to volunteer for another Habitat for Humanity project.
We made a short video to show you that it’s not only important to give back regularly, but, it’s fun, too!
Enjoy!
We can expect something on the order of $2.58 trillion dollars in overall mortgage origination in 2022, according to the most recent MBA forecast.
That would exceed the $2.25 trillion we saw overall in 2019, which was, by most accounts a very good year. It’s right in line with some of the great, pre-recession years the industry saw in 2004 ($2.7 trillion); and 2006 ($2.73 trillion). It compares very well to 2018 ($1.7 trillion), which was the last time we saw a drop off in refinance volume.
All things considered, especially knowing that the MBA’s latest forecast was reduced from its original forecast, a $2.6 trillion forecast, should it come to fruition, should have folks excited for the opportunity.
And yet, the headlines and conversations we’re seeing and hearing around the industry are far less positive. They have some reason to be—yes, we’re coming off of a $4.4 trillion year in 2021. This is an industry that bulks up its operations in high volume periods, so even if the expected decline takes us back to a historically positive overall volume, it’s still a decline, which means cost-cutting. Yes, this year will be a predominantly purchase market, which means more cost and labor per origination.
But it’s still a $2.6 trillion projection.
If anything, now will be the time when the well-prepared demonstrate their differentiators. Almost anyone can make money when the fish are jumping past the nets and straight into the boats. Now, however, lenders and REALTORS will be competing for purchase clients. They’ll have to prove their value to consumers to earn repeat or referral business…much less win new business. And while a lot of that will be based on the rate a lender can guarantee or the ability to negotiate the winning bid for agents, they’ll also be counting on their partners to make the process a smooth one for their customers.
And the title agencies that step up will have their stuff together. That means faster closings, because they’ve already automated their workflows and centralized their operations to eliminate redundancies, manual efforts and all-around wasted time. That means instantly responsive service. Not “a call back within 24 hours,” but instant, by way of technology for things like “when’s my closing?”
That means tight relationships with the other vendors and parties in the transaction, so that the inevitable wrinkle or two is ironed out long before it becomes a choke point in the march to closing.
And that means knowledge and expertise, nationally and locally, just in case this file is the one where the rare and unusual complication does pop up.
We’re just entering what could be a make-or-break market in 2022. For some, that $2.6 trillion will present opportunity and result in success. For others…well, they’ll really be cursing the purchase market. Odds are the brokerages, agents and lenders falling into the former category will be the same ones who’ve already prepared for what’s coming. And that will include relying on their very best service providers, rather than the also-rans.
Florida Agency Network recently appointed Amy Gregory as the Chief Administrative Officer.
Gregory began her career in title insurance in 1995 as a receptionist at an independent title agency in Brandon, Florida. Amy then joined Hillsborough Title (FAN’s flagship company) in 2007 where she directly assisted Aaron Davis in opening the company’s second office in Florida, which has now grown to over 30 offices statewide, in addition to multiple ancillary service companies.
As a licensed title agent, Gregory’s career progressed quickly from Branch Manager, to General Manager, to President of Title Operations, and now she has added the title of CAO to her resume. She oversees all title personnel and production, and the ancillary services divisions. Gregory regularly handles all types of real estate closing transactions, including residential, commercial, and construction. She has become an expert in streamlining and improving processes and procedures, and she is focused on mentoring and training staff in outstanding customer service. In 2019, Gregory won the “We Protect Award” from ALTA, and she obtained her ACAMS Certificate (Certified Anti-Money Laundering Specialists).
Aaron M. Davis, CEO stated, "It is with the greatest honor that we name Amy as our CAO. She has been here from day one of my ownership, and I can’t imagine a better and more qualified person to lead us forward. Her dedication, knowledge, and loyalty are unmatched in the industry.”
McKinney, TX. - Alanna.ai welcomes Aaron M. Davis, CEO of the Florida Agency Network (FAN), as the newest member to the Alanna.ai Board of Directors. Davis has long been considered a leader in the title insurance industry, and he was an early supporter and proponent of the eClosing and Remote Online Notarization initiatives in Florida. FAN utilizes Softpro Select as its software platform for its title and ancillary operations. Davis brings his knowledge of Softpro Select, and familiarity with the other software providers’ products, to assist in further development of Alanna.ai’s product suite. He was introduced to Alanna.ai in 2019 and was immediately impressed by the product’s intuitive querying capabilities and its potential impact on the title and settlement industry.
Alanna.ai's CEO, Randall Nelson stated, "We are thrilled that Aaron Davis will be joining Alanna. His industry experience along with his passion and energy will help propel Alanna to the next level.”
"I’m excited to join the Board with James Schlimmer of Cottrell Title & Escrow, and the team at Alanna.ai, to assist and advise in development and expansion of its products. I’ve experienced first-hand the technological evolution of the title industry, and I am humbled to be involved in the vision of its future direction,” says Davis.
About Alanna.ai
Alanna.ai is a technology company whose sole mission is to provide innovative technologies to the Title Industry.
Florida Agency Network (FAN) expands into key Florida markets! Today, April 15, marks the first day of a new merger between Total Title Solutions (TTS) and FAN.
“As a team, we are excited about the services and products that FAN has to offer. We all believe that the TTS way is already above and beyond the standards of the Title Industry,” says Angie Haddon, Chief Operating Officer of TTS. “However, the merger with FAN will make a superior experience! Anyone involved in the real estate transaction will continue to be in GREAT hands.”
FAN will take control of TTS’ operations. Angie Haddon will become a Division Manager for FAN, while Lisa Jahr will be promoted to Regional Manager and will oversee offices throughout the Tampa Bay Area. The merger will bring 27 new team members to the FANily and grow FAN’s geographical footprint by 5 additional offices, which include two in Pinellas, two in Pasco, and one in Hernando County.
“We are so excited to have TTS become part of FAN and continue to grow our footprint in the Tampa Bay Area. Abe, Angie, and the team have a like-minded culture to FAN, and we are grateful for the opportunity to service our clients together,” stated Amy Gregory, President of Title Operations for FAN.
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