Management of Change Improves Service
Federal regulations based on lending are changing the nature of and practices in the real estate and title businesses.
And they have arrived with increased process costs and significant penalties for errors.
These CFPB and attendant Federal regulations have caused major operational changes, unsettling the way the broader lending and property transfer business has operated. In part, these changes are forcing many acquisitions or combinations of lending and smaller title operations.
Merged or combined title operations have enjoyed various levels of success. Since much title work is patterned after local custom or original owner preference, it is hard to convince people to change what they have been doing for some time, particularly if there is no common way enforced.
In addition to operational pressure, the advent and advantages of electronic lending and recording are changing the way business is being conducted. Electronic recording has altered the management of the recording process, but has not necessarily resulted in the time or cost savings envisioned by managers.
As physical changes and electronic recording have shown, a different style of management is required if real savings of dollars and time are to be realized from the new title operation.
An example of this was when several title operations were combined in a single facility in Arizona starting in 2010. The original process plan was to combine the recording desks for about 100 branches, which immediately became unmanageable, resulting in chaos and very concerned escrow officers that could not meet closing and recording commitments reliably.
The solution was the application of a systematic workflow that converted the chaos into an asset using a controlled work process. The cost was recovered by controlling quality, reducing labor, and eliminating courier expense.
The initial success in major urban areas led to statewide expansion covering over 150 separate escrow operations, adding a substantial improvement in quality assurance to rural operations.
When the recording desk function is combined and controlled, title policy production, distribution and underwriter reporting may be improved as well. This can be achieved in a virtual environment with no capital purchase.
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