During its first two months of lending, MortgageCountry has been closing loans in an average of 13 calendar days—setting a new standard for speed.

The new mortgage banker accomplished this feat with the help of DocMagic’s 100% digital e-enabled documents and Total eClose™ platform.

How they did it: Download the MortgageCountry case study

“DocMagic completely exceeded our expectations, helping us make our origination and closing process next-level efficient and creating a second-to-none closing experience for our clients,” said Sheila Salvitti, MortgageCountry’s director of communications and social media. “After seeing the level of perfection achieved, we knew we chose the right technology partner to realize our belief that the sky is the limit.”

The feeling was mutual. “It was a pleasure collaborating with the tech-savvy, forward-thinking team at MortgageCountry in a combined effort to master the eClosing process before they ever funded a single loan,” said Dominic Iannitti, DocMagic’s president and CEO. “The unprecedented success we had with the solution configuration, troubleshooting, and implementation of the platform helped set up MortgageCountry to be one of the most efficient independent mortgage bankers in the country."

Working with with DocMagic’s eClosing team, CountryMortgage was able to automate its entire eClose workflow from start to finish in less than 30 days. Salvitti said DocMagic tailored Total eClose™ to CountryMortgage’s business needs, helping them be “flawless from the start.”

Founded in 2019, MortgageCountry entered the industry with a mission to cut the cost of a mortgage by using forward-thinking technology and a re-engineered mortgage process. The company's unique business model includes the fact that it's run virtually via a 100% browser-based technology.

MortgageCountry identified that the primary reason for rising costs is the industry’s reliance on a large outside sales infrastructure, absorption of mortgage brokers, and corporate expenses throughout the banking industry. It aims to reverse this trend by partnering with the best technology partners to provide an intuitive and simple platform that meets clients everywhere and anywhere.

“To be successful in today’s fast-moving, rapidly changing lending landscape, implementing the right technology is business-critical to disrupt an industry plagued with good ideas but poor execution,” Salvitti said. “MortgageCountry has successfully delivered on our promise to make the client experience as simple, quick and easy as possible.”

MortgageCountry reported that its clients valued the fact they were able to receive the complete closing documents well ahead of the closing and could sign on their own time without a rigid schedule. Clients said the process was more comfortable than prior experiences because they were able to review and sign the closing documents without the pressure of someone looking over their shoulder.

To learn more about how MortgageCountry found success amid challenging economic conditions, check out our updated blog post, where you can download the free case study.

Related Content:

• 3 reasons why DocMagic's document generation solution is so fast (7/15/2020)
• DocMagic offers free verson of its eSign technology for non-mortgage uses (6/1/2020)
• New AutoPrep tech accepts docs from ANY provider for paperless eClosings (4/3/2020)

At DocMagic’s May 27 webinar, “Road-Tested eClosing Strategies for Today,” Ben Sherman, president of real estate recording services firm Synrgo, shared some surprising facts and numbers about county recorders and electronic closings.

First, what's eRecording?

eRecording is a method of electronically delivering documents to the county recorder. So instead of mailing or FedEx-ing a document package, you’re scanning it and sending an electronic version to the courthouse via the Internet.

County recorders' ability to eRecord depends on their software systems. eRecording can be completed in minutes or hours, instead of the days or weeks that it takes to manually record a paper document.

What does this have to do with RON?

Any lender that wants to close a loan using remote online notarization (RON) has to find a jurisdiction that allows eRecording (except for specific papering-out exception we'll get to later). “Otherwise, you can’t get that document on record there,” Sherman said.

Now for the numbers…

The U.S. has 3,143 counties, but 3,590 recording jurisdictions.

Why the disparity? Certain states have more jurisdictions than they have counties. Connecticut, for example, only has eight counties but has 169 townships, and each township has its own clerk that handles the land record system.

As of May 31, there are 2,161 jurisdictions that eRecord.

These counties represent about 90% of the U.S. population, according to the Property Records Industry Association, which maintains an exhaustive list of all counties that eRecord.

Out of the jurisdictions that do eRecord, some still don’t accept electronic deeds.

Sherman says about 1,600 to 1,700 jurisdictions don’t accept electronic deeds, and that overlaps with some that do accept eRecordings. He calculates that about 58 million people, or 18% of the U.S. population, reside within these non-electronic deed-accepting jurisdictions.

13 states allow non-eRecording jurisdictions to paper out electronic documents.

As of July 1, there are 11 states that allow recording entities to print out and scan a paper version of an electronic document for recordation — including a RON document. They are: Florida, Idaho, Iowa, Kentucky, Minnesota, Montana, North Dakota, Ohio, Oklahoma, Tennessee, and Texas. By Oct. 1, Maryland and Washington will also allow papering out.

“That’s really important because that pertains to 452 counties in those 13 states,” Sherman said. “That’s a lot of recording jurisdictions that you can actually still do RON transactions.”

There are 3 key reasons why more county recorders aren’t accepting RON documents.

• Money: The software systems needed to manage eRecordings could cost a jurisdiction tens of thousands just to get started. “Believe it or not, in the United States we have counties that still write in a book,” Sherman said.
• Security: People worry that eRecording has more exposure to fraud than manually submitting a document, but Sherman says it's actually safer. Unlike paper, eRecording leaves a traceable audit trail—you can track who submitted the document, when it was submitted, from which organization, etc.
• Inertia: People may find it hard to change the way they've been operating, said Mike Lyon, executive vice president at Nexsys Technologies, at the May 27 webinar. “So, even though it’s super inefficient ... it’s what we’ve been doing forever and therefore we’re going to keep on doing it until somebody tells us to do it different,” he said.

With the onset of the pandemic, though, the landscape has changed dramatically in favor of eClosings and eRecordings. “That inertia is kind of gone now," Lyon said. "The ball is rolling and … it’s rolling at the county recorder’s office as well."

Related Content:

• RON update: Lots of forward momentum—but also a setback (6/26/2020)
• 3 reasons why underwriters haven't jumped on the RON bandwagon (6/24/2020)
• RON vs. RIN: Why you should know the difference (6/10/2020)

As we’re fond of noting, DocMagic can process a compliant closing document package of 100+ pages in under five seconds. But it’s not just a slogan, it’s a fact. Other document preparation companies take as much as ten minutes to do what we do in a fraction of the time.

So how do we manage to beat the industry standard by so much? We've got three key advantages:

We see the document generation process as one step, not several separate steps.

Other document generation providers look at document generation as just that—the process of receiving data and generating documents. They break down the overall process into multiple disparate steps, like an assembly line. Each phase—including data validation, compliance, document selection, and more—is completed independently, disjointed from the document generation process. Not only does each action take minutes rather than seconds, but the handoff and delivery from one siloed step to another adds additional time.

DocMagic has a totally different approach. Our technology integrates every step into a single synchronous transaction, all before generating a compliant loan document package. Additionally, we build, own, and maintain all of the technology included in our solutions, giving us total control over the entire process.

We feel the need … the need for speed.

We've made processing speed a priority from the first line of code. Our vision was to be the fastest, most accurate and  compliant solution in the industry. From the start, we made it a company mandate that no new line of code can be released into the solution if it adds even a millisecond of processing time. Thus, each new release has rigorous load testing and processing time evaluations that must be satisfied before a new development build can be promoted to production. Speed of real-time transactions is one of our top priorities.

We have a library of over 200,000 compliant mortgage documents.

DocMagic has been in business for more than 30 years, and during that time we’ve built up a massive document library of forms that are updated dynamically by our compliance team, giving our clients access to compliant documents in real time. We’d be shocked to see a document generation solution with a larger and more organized archive then we have today. Other companies can try to catch up—but we’ve got a considerable head start.

So that’s how we do it. Within five seconds of receiving loan data, DocMagic’s integrated dynamic document generation engine will analyze the data, preform data validation, preset data audits, conduct real estate lending compliance checks, perform data computation and calculations, and deliver a compliant mortgage document package. Speedy processing and compliance are simply in our DNA.

Related Content:

• DocMagic offers free verson of its eSign technology for non-mortgage uses (6/1/2020)
• New AutoPrep tech accepts docs from ANY provider for paperless eClosings (4/3/2020)
• A Document Library of Over 200,000 Forms and Counting! (1/21/2020)

Twenty years ago today, President Clinton signed into law the Electronic Signatures in Global and National Commerce (ESIGN) Act, which declared that electronic signatures are as legally binding as wet signatures. And ten years ago today, Congress honored that achievement by designating June 30 National ESIGN Day.

eSigning has shot up in popularity since then. According to Statista, between 2012 and 2017 the annual number of eSignature transactions rose from 89 million to 754 million, while DocMagic has processed more than 300 million mortgage-related eSignature transactions.

So on the 20^th anniversary of the day electronic signatures became indisputably legal nationwide, we're sharing five fun eSigning facts you (probably) didn’t know:

1. President Clinton eSigned the ESIGN Act—sort of.

To sign the bill, the president inserted a smart card encrypted with his digital signature through a scanner, typed in his password—“Buddy,” his dog—and a replica of his signature appeared on the screen. But before he did that, he signed the bill the traditional way, with a felt-tip pen. The reason? White House lawyers believed the Constitution requires presidents to actually put pen to paper to approve legislation.

2. eSignatures are tons better for the environment. Literally.

The global production of paper and cardboard is about 400 million tons annually. That translates to over 220 million pounds of toxic pollution released every year, while pulp and paper production is the third largest industrial polluter in the U.S. and Canada. One of the primary reasons we need so much paper: American companies typically print 1.5 trillion pages per year while the average office worker uses 10,000 sheets of paper a year.

We’re not exactly saying that e-signing could save the world, but it sure is a lot better for the environment.

3. You probably eSign something every day.

If you’re online, you’re eSigning. Any kind of consent—from clicking the “Buy Now” button to ticking the Terms & Conditions checkbox to accepting a website’s cookies—is defined as an eSignature. Typing your name in an email also counts.

4. Electronic signatures and digital signatures aren't interchangeable.

They may sound like synonyms, but there are significant differences. An electronic signature is more inclusive, encompassing any electronic consent process (like the checkbox we mentioned) attached to a contract or record. A digital signature is a type of electronic signature that has more security features; it uses algorithms and encryption to prevent tampering, impersonation of a signer, and to verify a document’s authenticity (i.e., confirm that it hasn’t been forged). Both types of signatures are legal.

5. Some transactions still require paper and ink.

Certain transactions still require paper documents and handwritten signatures, such as wills, adoptions, divorces, utility cancellations, insurance cancellations, court orders and official court documents, and, as President Clinton learned, possibly federal bills.

Absent from this list: notarized documents. As much of the mortgage industry knows, you can e-sign notarized documents (in some states, at least).

Now that you know five new facts, celebrate by eSigning something today!

Related Content:

• DocMagic offers free verson of its eSign technology for non-mortgage uses (6/1/2020)
• New AutoPrep tech accepts docs from ANY provider for paperless eClosings (4/3/2020)
• DocMagic Reaches 300 Million Mortgage eSignings as More Borrowers Opt for eSigning and More Lenders Require Proof of TRID Compliance  (1/24/2018)
  

—Update (2/12/2021): RON update: First new remote online notarization law of 2021 passes

The remote online notarization (RON) landscape is still very much in flux. Three states recently passed RON laws and a new survey shows RON usage surged during the pandemic—but a powerful official from one of the country’s biggest states also announced his opposition to any federal law.

In recent weeks Colorado, Louisiana, and Missouri became the latest states to allow RON closings. Louisiana's governor signed his state’s bill on June 11, while Colorado's and Missouri’s bills still await governors’ signatures. But after that happens, 27 states will have permanent RON legislation on the books (as opposed to the spate of temporary orders passed at the start of the pandemic).

The striking thing about all the state action is how fast the momentum is growing; between 2011 and 2017, only four states enacted RON laws. In the 2.5 years since, another 23 states have jumped on board.

On top of that, the pandemic resulted in a 40% increase in title and escrow companies using RON from March to May, according to a Qualia survey.

Yet the same Qualia survey also found that the percentage of title and escrow companies with no plans to use RON rose as well, from 14% to 23%. The survey attributed that to stay-at-home orders ending, states allowing alternatives to RON (such as RIN), and industry stakeholders coming up with socially distanced workarounds such as drive-thru closings.

Lenders should start offering eNotes this year. Learn why.

At the federal level, RON adoption is also uncertain. In March, bipartisan legislation was introduced in the Senate to allow all U.S. notaries to conduct RON. That bill was referred to the Judiciary Committee, which hasn't taken any action on it yet.

On May 19, however, Calif. Attorney General Xavier Becerra (D) sent a letter strongly opposing the bill to the two senators who lead the Judiciary Committee.

“The proposal under consideration appears to be a solution in search of a problem," the letter stated. "The California Legislature has twice considered and twice rejected the implementation of online notarization, instead preserving its long-standing policy to require that notarizations take place in person.”

He concluded, “I urge Congress to abandon any attempts to impose remote online notarization on the states.”

Related Content:

• 3 reasons why underwriters haven't jumped on the RON bandwagon (6/24/2020)
• RON vs. RIN: Why you should know the difference (6/10/2020)
• Amid pandemic, states boost access to remote online notarization (RON) (4/17/2020)

Brian D. Pannell, DocMagic’s Chief eServices Executive, has been named one of the inaugural winners of the Thought Leader Award by the PROGRESS in Lending Association. Only 30 people across the entire mortgage industry received this honor.

One reason Pannell received the honor was due to his forward thinking on eClosings. He has long been a proponent of the digital solutions in the mortgage industry.

Pannell points out that many key barriers to eClosings appear to be coming down. In the past the most restrictive barrier to adoption has been the limited amount of investors and financial support of the eMortgage as a tradeable commodity, but Ginnie Mae and FHL Banks have announced that they’re opening up the market to lenders who didn’t have anyone to sell their eNotes to and will fund them in the secondary market.

Additionally, Pannell notes, there has been groundbreaking movement at the federal and state levels to accept eNotarizations, which is a game changer when it comes to being able to complete the entire eClosing package electronically.

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• DocMagic offers free version of its eSign technology for non-mortgage uses (6/1/2020)
• Pandemic leads to growing acceptance of eClosings: News source (5/21/2020)
• New AutoPrep tech accepts docs from ANY provider for paperless eClosings (4/3/2020)

Even as demand for remote online notarization (RON) grows, underwriters and settlement agents are hesitant to fully embrace it. They have some good reasons why.

Jason Nadeau, the chief digital officer at Fidelity National Financial, discussed those reasons during DocMagic’s May 27 webinar, “Road-Tested eClosing Strategies for Today.”

REASON 1: The fog of RON

As coronavirus-related social distancing orders came down in March and April, states issued a flurry of temporary emergency orders to allow remote notarizations. Every day it seemed like a different state or governor would issue a new rule, "and then everything would be out the window, you’d start all over again with what our requirements are,” Nadeau said. "So one of the big complexities right now is just that shifting landscape."

Click here to watch a free recording of the May 27 webinar.

Another impediment to RON is that not every stakeholder accepts it. Even if a state has a permanent RON law, that doesn’t mean that a county recorder or lender will accept a RON closing. Nadeau said the lack of answers has put underwriters and settlement agents in wait-and-see mode.

“It’s like the fog of war,” he said. “It’s too confusing, there are too many variables, there’s not enough certainty.”

REASON 2: The potential for wire fraud

“COVID has blown up wire fraud,” Nadeau said. “Once we started moving everybody from checks to wires, wire fraud exploded significantly over the last couple weeks.”

The issue became worse after companies began requiring employees to work from home. Fintech company FundingShield reported at a April 23 webinar hosted by the Mortgage Brokers Association that during the first two weeks of the COVID-19 outbreak, they saw a 62% increase in various types of wire fraud attempts, such as incorrect and altered wire instruction, phishing attempts, and more.

The American Land Title Association announced that it's taking protective measures during the pandemic to increase education about real estate wire fraud, while the FBI recently warned of increased fraud risk due to more people using mobile banking apps during the pandemic.

REASON 3: RON hasn't survived a court challenge—yet

Underwriters always consider the risk to title. Settlement agents are passionate about home ownership, Nadeau said, and “we never want to put somebody in a home where the chances of them owning that home are at risk because of some technicality around the transaction.”

“Sometimes I get in conversations with people in the industry that say, ‘But this is legal' … Absolutely true,” he said. “And sometimes what’s legal is not what’s acceptable.” 

So while RON laws are on the books in nearly half the states, underwriters are still wary because the practice hasn’t been legally challenged. Many want another company to be the first to insure RON transactions, defend them in court, and then win and set precedent. Nadeau likened it to being on a SWAT team: “You just don’t want to be the guy who’s first through the door.”

Yet the RON future is still rosy

Despite the risk and complexity of RON, Nadeau believes the industry will eventually agree upon a standard RON model and expects that adoption by lenders, county recorders, and other stakeholders will rise. Over the last few months he says he’s seen hundreds of agents get set up for RON.

Additionally, the risk appetite has changed. Before the pandemic, one reason underwriters demurred was because they questioned whether they’d actually conduct that many RON transactions, or whether the risk was worth the potential revenue.

“Now what COVID has brought is, people really want to do this, and there’s going to be demand for this,” Nadeau said. “All of a sudden now there’s revenue tied to it, so there’s reward with that risk, and that’s really changed the scales for underwriters to think about it.”

See Related Content:

• RON vs. RIN: Why you should know the difference (6/10/2020)
• Webinar: How mortgage industry should adapt to COVID landscape (6/3/2020)
• Amid pandemic, states boost access to remote online notarization (RON) (4/17/2020)

When the coronavirus pandemic hit, several states issued emergency orders to allow remote notarizations, joining 23 that already had permanent laws allowing remote online notarization (RON). A number of the stopgap measures, however, didn’t actually allow RON; instead they authorized a decidedly lower-tech alternative called remote ink-signed notarization (RIN).

Like RON, RIN allows notaries to use videoconferencing technology to notarize documents remotely, but it involves wet-signing paper documents instead of using eSign and eNotary. 

How a new lender found success amid the pandemic: Download the MortgageCountry case study

The RON vs. RIN dichotomy adds more confusion to the complex hodgepodge of state regulations. Some states allow RON, some allow RIN, and others allow both. Meanwhile the rules are constantly changing as some emergency orders expire and others get extended.

The Vermont Paradox

Vermont, for example, is in a unique position: It has a permanent RON law, yet at the moment only allows RIN. Though Vermont passed its law in 2018, RON hasn't been implemented because the Secretary of State still hasn't issued formal guidance for it.

But in late March, the Secretary of State did issue a temporary order to allow RIN for the next 180 days—while expressly clarifying that the rule doesn't allow “any form of electronic notarial acts or remote online notarization."

A survey taken in April by the American Land Title Association found that 21% of title and settlement companies respondents offered RON and another 16% provided RIN-style emergency video notarization using FaceTime or Skype. The agents that offered RON used it in 7% of their closings, while those that offered video notarizations used it in 22% of their closings. Fannie Mae and Freddie Mac each also released RIN guidance.

Here are some key differences between RON and RIN:

• Document Format: A RIN document is wet-signed on paper, while RON documents are almost always in an electronic format and are eSigned.
• Meeting Technology: For RIN, notaries and signers can use videoconferencing technology like WebEx, Skype, Zoom, and FaceTime to meet. RON requires a dedicated RON platform such as NotaryCam.
• Signatures: In a RIN, the signer wet-signs signs the document while the notary watches, and then emails, faxes, physically mails, or delivers the document to the notary. The notary then certifies and affixes their seal to it, and then returns the document to the signer. In a RON, the signer eSigns the document and the notary eSigns the notarial certificate and affixes an electronic seal.

There is another major difference: RIN is temporary, while RON, which had been gaining momentum even before the pandemic, is here to stay. When Fannie Mae released its RIN guidance, it pointedly noted that, “We do not expect these temporary governors’ executive orders and authorizations related to RIN to extend beyond the COVID-19 national emergency” and encouraged lenders to only consider RIN if RON wasn’t available.

“RIN is a temporary solution that is acceptable for now. It’s not a long-term solution because the GSEs won’t continue to accept this format,” said Chris Lewis, DocMagic’s Senior Account Executive for Enterprise Solutions. “RON eClosings will most likely usurp every other form of electronic notarization.”

Related Content:

• Webinar Recording: Road-Tested eClosing Strategies (5/27/2020)
• New support for power of attorney (POA) transactions amid COVID-19 (5/7/2020)
• Amid pandemic, states boost access to remote online notarization (RON) (4/17/2020)

For the mortgage industry, a lot has changed in a short amount of time—especially when it comes to remote online notarization (RON), according to the speakers at DocMagic’s May 27 webinar, “Road-Tested eClosing Strategies for Today.”

Click here to watch a free recording of the webinar.

Yet lenders shouldn’t just embark on a mad scramble to immediately implement RON, with its shifting landscape of changing legislation; instead, they should immediately begin doing hybrid closings, said Chris Lewis, DocMagic’s Senior Account Executive for Enterprise Solutions. Even if lenders can’t go 100% digital for awhile, they can still move in that direction by completely cutting paper out of the process except for the recordable documents: the note and deed of trust.

“This is easily scalable, it can be implemented in a very short period of time, and it puts you on the path to that fully digital transactional experience,” Lewis said.

The webinar’s other speakers included:

• Jason Nadeau, the chief digital officer at Fidelity National Financial. He noted that one of the key challenges is that RON technology, while legal in many places, is still risky for underwriters and settlement agents. “We’re talking about all new laws, all new practices, all new procedures—so they’re all untested in court,” he said. “It’s not about what’s legal, it’s about the risk profile.”
• Ben Sherman, president of Synrgo, who cited statistics and challenges for county recorders. “When it comes to the world of county recording there’s a lot of confusion and unknowns,” he said.
• Brian D. Pannell, DocMagic’s Chief eServices Executive, who explained why lenders should begin offering eNotes. Their popularity had been increasing even before the coronavirus crisis, Pannell said, displaying a graph showing that the number of eNotes registered with MERS® jumped from over 100,000 in all of 2019 to over 250,000 in the first quarter of 2020 alone.

Click here to watch a recording of the webinar, including more in-depth background information, recommendations, and the Q&A session.

Related Content:

• Pandemic leads to growing acceptance of eClosings: News source (5/21/2020)
• Improving the Loan Process With eNotes
• Amid pandemic, states boost access to remote online notarization (RON) (4/17/2020)