Real estate technology firm Alita Group has unveiled AOLPro, an software-as-a-service solution offering a fully insured attorney opinion letter (AOL) as an alternative to traditional title insurance.
Stacy Mestayer, president of Alita Group, shared insights into the creation, scope and future of AOLPro in an interview with The Title Report.
“AOLPro has been a project in the works since 2020,” Mestayer said. “It was an iterative process, with AOLPro being the culmination of that effort. It was important for us to fully understand the coverage and operational processes behind title insurance so that we could create a truly viable alternative that lenders could incorporate into their current processes without disruption.”
The creation process journey included consultations with government sponsored entities, regulators, agencies and lenders to assess risks and refine the product.
“We’ve worked closely with our insurance providers, all of whom are AM Best A-rated underwriters that are well-versed in title-related risk,” Mestayer said.
Alita Group’s strategy didn’t stop at developing AOLPro. They also launched the AOLPro Platform, enabling licensed providers to white-label and produce the product for their clients.
“Our platform is plug and play, which makes it easy for existing market participants, including agents, title and settlement companies, and lenders to participate,” Mestayer said. “The landscape seems to be changing, which is positive. The efforts of the (Biden) administration, (Federal Housing Finance Agency) and agencies like the (Consumer Finance Protection Bureau) are creating momentum for alternative solutions, which are necessary to modernize the market.”
Mestayer argued that true competition in the title insurance market is stifled under the current system.
“A truly free market would welcome competition through alternative products and let the market decide,” she said. “The unique position of AOLs, regulated at the state level, offers a robust framework of protection for transactions.”
AOLPro is available nationwide.
“This broad availability ensures that the product can be used in all types of property transactions, including refinance and purchase,” Mestayer said. “The recent expansion by Fannie Mae and Freddie Mac to include (homeowners association) properties and condos has further broadened AOLPro's applicability.”
When asked about the protection level to homebuyers provided by AOLPro compared with traditional title insurance, Mestayer highlighted the product’s comprehensive coverage.
“The coverage of the AOLPro is substantively similar to the coverage of title insurance, with a minor difference,” she said. “Title insurance theoretically covers ‘undiscoverable’ defects, while the AOLPro covers those issues that are discoverable or preventable,” she explained. “Bradley Arant (law firm) did a deep dive into the coverage behind AOLPro to clarify coverage distinctions and address (American Land Title Association) questions and concerns. I would encourage anyone that wants to understand the real differences in coverage to read Bradley’s white paper.”
Looking ahead, Mestayer envisions a market that embraces alternative solutions for the benefit of consumers.
“We’d love to see the market embrace alternative solutions for the benefit of consumers,” she said. “People are paying more than they should for a product they don’t understand at a time when most cannot afford to do so. We want to educate consumers and provide options.”
The Alita Group is not aiming to replace traditional title insurance but to offer a tiered approach that promotes transparency and competition, Mestayer added.
“If we can bring transparency and competition to the market for the benefit of the consumer, and do so responsibly, there should be no question. It is the right thing to do,” she said.
Alita Group’s near-term plans include further automation in transaction processing and new product releases.
“Our suite of offerings will provide title companies access to automated title searches, (optical character recognition)-based examination and audit review, post-closing automation leveraging (artificial intelligence) and machine learning, and advanced integrations to disbursement engines to reduce wire fraud and losses,” Mestayer said. “We also plan to release products tailored to specific market segments, like loan modifications.”