Digital Mortgages: What’s Holding You Back?
The mortgage industry has been slow to adopt digitization compared to many other industries. Just as the industry began gaining momentum and the major players were on board to adopt a truly digital mortgage process, it came to a screeching halt when the subprime mortgage and foreclosure crisis hit the US in the late 2000s. Since then, it has been a bit of a rollercoaster ride for most people in the mortgage industry. Bringing together numerous stakeholders to commit to the digitization of paper-laden processes is still an ongoing venture.
That’s probably surprising to hear for anyone that has gone through the painful process of taking out a mortgage and signing page after page of mortgage documents from massive stack of paper at the closing table. Definitely not a pleasant experience, nor an efficient use of one's time.
I attended last week's National Technology in Mortgage Banking Conference (aka MBA Tech) in Chicago to connect with other leading mortgage technology firms and to formally launch the new eSignLive Digital Mortgage solution. The good news is that we're all seeing renewed interest in eliminating paper from the mortgage process – starting with the upfront disclosures and application to the closing documents and all the way through to servicing the loan – as a result of new regulations, digital technologies and customer expectations.
One step at a time
In banking and lending, the "holy grail" of the end-to-end digitization of complex mortgage transactions is now at arm’s length. The key is tackling the process one piece at a time. While a "fully digital" process is the end goal, it always starts by implementing a hybrid process. What we’ve seen our customers successfully do is to break it up and automate parts of the mortgage process. Even if lenders begin with a hybrid paper-digital process, a tremendous amount of cost-savings and benefits can be achieved.
Managing the workflow between all required parties in a mortgage transaction – including the borrower, title agents, attorneys, notaries, lenders, investors and servicers – is complex. Look for a feature-rich solution that can tackle multiple parts of the mortgage process to minimize the effort required take to stitch together a complete solution.
The key components of a digital mortgage solution should include:
eSignature & eDelivery The delivery, review and acceptance of the upfront mortgage application disclosures that must comply with the TILA-RESPA Integrated Disclosure (TRID) rule. Learn how Wells Fargo enabled the eDelivery of disclosures for home equity line of credit (HELOC) applications.
- eClosing The review, signing and notarization of documents in the mortgage closing package at the closing table. The process also involves the transfer of the mortgage eNote to a secure digital vault.
- eVaulting The transfer and secure storage of the authoritative copy of the promissory note (eNote), and automatic transfer to the MERS eRegistry in its native SMART Doc format.
Is the mortgage industry ready to go fully digital?
Still dependent on legacy systems and burdened by the after-effects of the financial crisis of 2008, the mortgage industry has been slow to adopt digitization. However, there is no better time to go digital. Unlike traditional paper processes, digital processes can help clear the many hurdles that the industry is facing – including the need for transparency to regulators and to meet consumers’ evolving expectations. That’s because going digital helps to deliver a better customer experience, while giving you full visibility into when and how the transaction took place – something that simply isn’t possible in the paper world.
The good news is that the talk about digital mortgages isn’t just talk. It’s actually going on today. Your competitors in the banking and lending space are already adopting a digital mortgage process. In our experience, anchoring your digital mortgage project around customer experience and arming yourself with relevant ROI metrics will help you get your project off the ground quicker.
New offerings like the eSignLive Digital Mortgage solution have laid important groundwork for wider adoption of digital mortgage technology that will improve the borrower experience – and provide cost savings to title companies, lenders and investors. Our single platform solution contains all of the necessary components to facilitate a fully digital process – from signature to notarization through to the vaulting and registration of the mortgage note in the MERS eRegistry.