Since its inception, title insurance has played a crucial role in a broad range of property transactions It has provided security and confidence to borrowers and creditors alike, providing efficiency and consistency to transactions previously at risk of damaging irregularities.
Given the critical part this innovative financial product now plays in the industry, and as we appear to be entering a period of post-Brexit volatility, pointers for the future can be extrapolated from an examination of how it has historically adapted to meet the ever-evolving needs of clients.
The property boom of the late-1990s and early to mid-2000s is when non-traditional lenders began to emerge to assist with funding flows, as high street lenders struggled with overwhelming demands on their capacity. In this context, title insurance proved particularly useful to reduce title due diligence, which led to a reduction in overall transaction timelines. This marked the period when lenders began to embed the product in their operational processes in order to reduce transaction timetables and manage any title-related risks most effectively. This context also underscores the reason why Titlesolv introduced a six-month 'cure or pay' guarantee to its claims resolution.
When the market crashed following the 2008 financial crisis, banks and long-term lenders became understandably more risk-averse and severely reduced the size of their funding lines. Short-term lenders consequently began to supplement the funding gap that emerged, with the profile of title insurance evolving to become one of 'deal enabler' to such lenders. The unique selling point was now about providing a risk-free title, along with a more cost-effective service to clients, in order to enable short-term lenders to mirror high street lending practices and ultimately position themselves as future entrants into the long-term loan market.
Following the financial crisis, short-term lenders began to experience increased demand for loans on buy-to-let transactions and development sites as well. As a consequence, the market became increasingly exposed to title insurance, with the risk being met with a variety of new policies. A prominent example of this was Titlesolv's developer policy, which enabled new forms of lending and addressed specific concerns of this particular market segment.
With the short-term lending industry facing greater regulation in recent years, title insurance now enables lenders to offset the costs incurred through increased regulatory compliance with innovative short-form title diligence processes. This has enabled cheaper and more efficient transactions, and added an effective risk management tool to the arsenal for lenders.
The market is ever-changing, and title insurance providers must be constantly ready to adapt if they are to adequately protect their clients. In such a precarious and fast-paced economic climate, constant engagement with the short-term lending industry is vital to better understanding its needs. Such engagement has enabled Titlesolv to maintain its market-leading position within the industry, providing intuitive, intelligent solutions to its lender clients.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Close Brothers’ banking division reports 6.6% loan book growth
Close Brothers Group PLC has revealed that its banking division has seen a 6.6% growth in its loan book in the 11 months to 30th June 2018...
Leeds introduces two-year fixed rate BTL product
Leeds Building Society has launched a two-year fixed rate buy-to-let (BTL) mortgage product as part of a wider refresh of its 70% LTV BTL range...
Just 20% of Brits would opt for a challenger bank
Only 20% of UK residents would opt for a challenger bank if they were opening a new account today, according to research from Equifax...
Santander to form digital investment banking team
Banco Santander has announced that a new digital investment banking team will be formed within Santander Corporate & Investment Banking...
Metro Bank introduces developer portal
Metro Bank has launched a new developer portal for FCA-registered third parties wishing to build services on top of its APIs...
Wesleyan Bank appoints new head
Wesleyan Bank has appointed David Brownbill (pictured above) as its new head of indirect sales...
Arbuthnot announces profit surge
Arbuthnot Banking Group has reported a half-yearly profit before tax of £3.5m for the six months to 30th June 2018, up from the £2.5m recorded during the same period last year...
Temenos extends contract with Northern Trust
Temenos has signed a multi-year contract with global financial services company Northern Trust...
TSB adds new director to board
TSB Bank PLC has announced the appointment of Andy Simmonds (pictured above) as an independent non-executive director...
60% of Brits want ‘peace of mind’ when using cards online
Three-fifths of Brits (60%) want ‘peace of mind’ – regarding online security and fraud prevention – when using cards online, according to recent research...
Tandem reaches 250,000 customers
Tandem has announced it now has 250,000 customers across its cashback credit card, fixed term savers and account aggregating banking app...