Opendoor is acquiring part of Doma, a property technology company that automates title searches. Doma says it uses machine learning and artificial intelligence to make real estate closings, specifically title, escrow and underwriting, faster and more affordable.
Lucas Matheson, MBA, CFA, president of Opendoor, said, “We’re in the process of completely rebuilding and automating, like most of the other pieces of technology that Opendoor is working on to eliminate time and money for customers.”
Under the program, certain refinance transactions determined by Doma to have low title risk may be sold to Fannie Mae without needing a lender’s title insurance policy or an attorney opinion letter. So far, that has been about 80% of the refinance candidates, according to Doma.
The title insurance, however, is only one component of the refinancing process. Closing costs include other services, such as setting up an escrow account, ensuring all mortgages are paid off, and paying transfer fees and taxes. Some of this is still manual and highly service-oriented; it can take several days and add thousands of dollars to the refinance cost.
Max Simkoff, CEO of Doma, said, “This program grew so dramatically last year, we were operating our own closing and escrow agency, and it’s a sizable one, and doing a decent job of keeping up, but, frankly, the demand was outstripping our ability to close transactions.”
Doma went looking for a company with the technology to scale its business as far as possible and ended up with Opendoor, whose technology can do the closings much more efficiently. As a result, the price that it charges for closings is lower than the industry average, according to Simkoff. Following the acquisition, 85 employees from Doma will be joining Opendoor.
Join our community of 200,000+ real estate leaders and get weekly insights and updates with our newsletter.
*Offer ends on Friday, 7th February.
