Tenet Energy uses Cardinal Gray to conquer its title backlog

Challenge

Upwards of 2 years post-funding, Tenet had a little over 50 refinances missing liens in their name. Collateralizing a refinance involves multiple, painstaking steps:

• Collecting a power of attorney from the borrower
• Receiving a lien release from the previous lienholder
• Transferring the lien with the DMV

"Automating lien perfection requires a system that can intelligently interpret existing title data, precisely follow state filing requirements, and patiently coordinate with customers at any point in a loan's lifecycle."

The difficulty of completing this process is exacerbated by its lateness. Borrowers already making payments on time are often unwilling to comply with novel lender requests, and previous lienholders need reminding that they failed to properly release their security interest.

Solution

Tenet first adopted Cardinal Gray's automated engine for filing liens on direct-to-consumer loans to help alleviate its title backlog. On nearly all of these transactions, Tenet's previous vendor had failed to perfect these liens without any explanation as to why.

In contrast, Cardinal Gray's automated lien filing engine was able to simultaneously diagnose why these previous attempts had failed and correct their mistakes:

• 25% of transactions failed due to incomplete ownership information on the loan application undermining the collected Power of Attorney. Cardinal Gray automatically detected the presence of co-owners from existing titles and DMV records, collecting POAs from both the borrower and co-owners.
• 15% of transactions failed due to POAs failing to meet state signature requirements. While Tenet's previous vendor attempted to transact with these incorrect POAs, Cardinal Gray's lien perfection engine is pre-trained on state signature requirements.
• 15% of transactions failed due to missing titles. Instead of waiting for orders to duplicate missing titles, Cardinal Gray automatically alerted Tenet of these missing requirements and carried out merged duplicate and title correction transactions.
• 10% of transactions failed due to malformed lien release letters. Cardinal Gray detected discrepancies between loan information and the content of the lien release letter and automatically pinged the prior lienholder's title team.

Results

Within 2 months, Cardinal Gray:

• Reduced Tenet's backlog by 80%, constituting over $1.6M in loans secured.
• Collected 60+ state-compliant signatures, 15 of which were from individuals present on the title but not the original loan application.
• Sourced lien release letters from 5 different financial institutions, without a single human in the loop.

“Cardinal Gray helped us get more done in two days than the year I have spent going back and forth with my previous vendor.”

Andreas Wallendahl

COO, Tenet

Conclusion

Automating lien perfection requires a system that can intelligently interpret existing title data, precisely follow state filing requirements, and patiently coordinate with customers at any point in a loan's lifecycle.

While other vendors failed to take the proactive measures necessary to prevent transaction failures that can cause title backlogs to accumulate, Cardinal Gray helped Tenet eliminate its backlog and ensure one never manifests again.