Written by Federal Title | 23 March 2010

As title agents continue to tackle the juggernaut that is the RESPA final rule, some forward-thinking companies have brought to market new calculator tools that are not just making the implementation process easier for their lender clients, but for the title agents as well.

The RESPA-compliant calculators have been launched on individual title company sites around the country and provided nationwide thanks to companies like Stewart Information Services Corp., which is offering its updated Lender ExpressQuote to both its direct and independent agents through Stewart Title Co. and Stewart Title Guaranty Co.

The technology allows lenders to plug in specific details about a particular transaction in order to receive necessary quotes for title insurance and settlement services in order to complete the Good Faith Estimate (GFE). Oftentimes, the quotes are provided in the format of the GFE form to avoid any missteps on the lenders’ part when filling out the form. Some companies are even guaranteeing the quotes provided in the case issues arise at closing from variations pushing fees outside of the 10 percent tolerance restrictions.

Announcements of calculators being launched by title companies have steadily increased since the RESPA final rule became effective on Jan. 1. However, the development process isn’t short or inexpensive, so those already providing these tools described the foresight they had to begin the development process many months ago.

Planning for it

In early 2009, when word first came that the RESPA final rule would become active in January, Stewart Title began development of its compliant calculator.

“We spent last year trying to respond to all the changes and clarifications of the regulation. We spent the last half of the year refining the electronic calculator. We actually had the calculator that we kept our rates in already and then we adapted it with a customer interface where we could allow lender customers to come in and get their own rates at any time in specific locations and get a more accurate online capability,” said Stewart Morris Jr., president and co-CEO of Stewart Information Services. Corp. and president of Stewart Title Co.

Demand for such a feature wasn’t an immediate cause for the development, since many in the lending community anticipated that the rule would be delayed by the Department of Housing and Urban Development (HUD).

“We saw an opportunity that this could be turned into a good thing. So we started early before we were getting demand, reading between the lines and thinking that HUD was serious. We went ahead with development because you don’t do the development overnight. You have to be ahead of the curve in these kinds of major changes,” Morris said.

Garry Wolff, founder of Colorado-based TI Services LLC, which offers Colorado title company clients services including its rate-comparison Web site www.myTitleIns.com and its TRACcalculator rate calculator, said that he first anticipated the need for a calculator technology when RESPA placed demands upon lenders to provide more accurate information to borrowers. Luckily, a customer request put his company into the position to develop the technology before the need was fully realized.

“We’ve been trying to promote it for a long time, and people didn’t really pay attention too much to it. Then, here comes RESPA and all of a sudden in mid-January, we had people starting to call us out of the blue, people we had tried talking to the last year and a half,” Wolff said.

Developing the technology

Todd Ewing, president of Federal Title & Escrow Co. in Washington, D.C., has provide lenders with a calculator since 1999, but soon realized that the technology would need to be refined to comport with the RESPA final rule.

“As soon as they announced the new regulation was forthcoming, I immediately recognized that lenders were going to rely upon title companies more heavily to provide an accurate quote for title services as well as the transfer recordation taxes,” Ewing said.

The company’s in-house program was updated with the help of its own staff — something for which Ewing was thankful after hearing quotes for similar development from an outside source being in the ballpark of $15,000 to $20,000.

“Just to refine the process took four to five months to get perfect. And we’re still finding little things that need to be tweaked here and there,” he said.

Likewise, at TI Services LLC, Wolff said updating its calculator to meet new GFE requirements — including necessary itemization and bundling as well as the ability to populate the appropriate boxes on the form — took about six months to build with nearly 1,000 pieces of code. While focused on the Colorado market, Wolff said the technology would allow him to simply make some tweaks if customers in other markets were interested in signing on.

Like many title companies today, Federal Title guarantees its quotes, even offering to pay the difference if a fee is more at the time of closing than what is originally provided. However, Ewing said he is confident in the system in place and its ability to handle every nuance that may affect the price.

“We say in our guarantee agreement, as long as you use the calculator correctly and you answer the questions correctly, then it’s the right quote,” he said. “We’ve developed our software to a point where it’s foolproof.”

At Stewart Title, the technology was also in place beforehand to provide calculations nationwide, so the initial process of upgrading it was quite easy, Morris noted. However, complications did arise.

“The difficult thing about this was the HUD regulation required us to quote and price in a different way than we had before. It required us to have premiums and then the service fees. Getting that done state by state and then in some states, county by county, so that it was accurate was the more difficult part. Also, getting our agents and our office to realize that they were going to have to price differently and settle on price and live with it was difficult,” he said.

Once agents decided on the prices they wanted inputted into the system, Stewart then was able to add those. By January, 100 percent of its agents’ rates were online and available to lenders. Though the technology is open to all of the underwriter’s direct and independent agent partners, not all have adopted the system.

“Since agents run their own offices and make their own decisions, they have gone in many directions of doing it themselves on their own Web sites, for example, so they’d have their own calculators,” he said.

Needs and expectations

Morris said the reaction from Stewart’s lender clients has been very positive, with feedback highlighting its ease of use. And he said, increasingly, title companies will need to provide the technology as lenders come to expect its availability.

“We’re seeing it becoming a requirement and it is a requirement with many of our lenders. They want to be able to see how to post the fees in their GFE and they want it to be downloadable electronically. They are interested in seeing an image of the GFE pointing right where the numbers go. They also enjoy the fact that they can get a quote 24 hours a day, seven days a week. They are not constricted to getting an answer from someone; they can get it when they want it,” he said.

Wolff said that when companies started calling TI Services requesting a calculator feature, it was from a need that arose between lenders’ demands for the technology as well as recognizing its appearance in the market.

“It was pressure from the lenders, but also from competitors. Once you get one or two title companies out there doing something, then other companies say, ‘Oh, I need to do that, too,’” Wolff said.

However, aside from lenders expecting the offering, title agents, too, are recognizing the benefit of providing access to quotes via their Web sites, which allows them to avoid taking calls for fees or having to produce preliminary HUD-1s.

“You don’t do work product just to give someone an estimate. So we talked to a lot of title companies, and some use it as a marketing advantage,” Wolff said, adding that avoiding the extra time and manpower to provide quotes is an added benefit to the technology, especially in light of the high rate of title cancellations that often reduces the return on that energy spent.

Effects on business development

While the value placed on a calculator may vary by region, as some calculations for transfer taxes and other variables are more complicated in some than others, title companies ahead of the curve and able to offer the feature today are finding that it has been advantageous for building business.

“If you want to remain competitive in the marketplace and you want the average loan officer to find a comfort level in using your services, you’re going to have to have something that is available to them 24/7, that is accurate and that you’re willing to back up,” Ewing said.

The effort has paid off for Federal Title, which has seen mortgage lenders that it’s never worked with before reach out to the company to handle its transactions.

Morris said Stewart went on the offensive in 2009 to make RESPA a sales and marketing opportunity and figured out ways to ease lenders struggles with the new rule. The calculators not only help their processes but provide numbers that can be downloaded so there is no risk of importing incorrect quotes.

“We have definitely picked up business because of it,” Morris said. “We look at it as being a business partner with them. We’re all under this regulation, so working together, we can perform flawlessly and accurately with the GFE quotes. The lenders very much needed the help. The title industry is a big part of the overall lending and closing process, so working closely with our lending customers as partners in getting this done has been a very good thing.”

Questions/comments? Send the details of your RESPA implementation experiences to The Title Report. E-mail Jennifer Kovacs at This e-mail address is being protected from spambots, you need JavaScript enabled to view it .