CUSO leaps over hybrid eClose to offer fully electronic loan closings

Superior Financial Solutions, LLC, a CUSO owned by Superior Financial Credit Union, chose DocMagic’s Total eClose solution for completely paperless electronic mortgage loan closings and is now performing eClosing ceremonies using Remote Online Notarization (RON) through its title agency subsidiary.

Kurt Neeper, President of Superior Financial, said the company decided to offer their customers’ members an electronic closing, and so looked at companies with the most experience. After researching the industry, they came to a conclusion; DocMagic has gone further down this road than most, its user interface was one of the best in the industry, and its mobile capabilities are second to none. This is critical because most credit union members will be doing their remote closing on a phone or tablet.

As a result, Superior won an industry award for being the first credit union in Ohio to provide a true, end-to-end eClosing solution to borrowers.

Unlike many lenders who settle for a hybrid eClosing, Superior took a different path. Superior supports many credit unions with mortgage origination and consistently focuses on creating a great member experience. The company knew very early that delivering a fully paperless loan closing on an electronic tablet was their end goal and DocMagic helped them to achieve it.

Mr. Neeper said DocMagic’s remote online notary functionality was key to the decision to partner with us because consumers are drawn to it for the convenience it offers. He also pointed to DocMagic’s experience

actively working with eClosing and RON clients in this area every day, for having an awareness of the issues that can arise.

DocMagic’s experience, integrated solution with Superior, and working relationships with key stakeholders - the GSEs, MERS - made the overall approval process much more seamless.

 

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We’re making eClosing easier!

Now borrowers can participate in an eClosing on the same device!

To join a typical eClosing event, each borrower receives a unique email invitation and is required to login and authenticate separately using separate systems.

But what if borrowers don’t have the option to utilize separate computers or what if there is only one computer in the household?

DocMagic's Total eClose solution now makes it possible for more than one borrower to join an eClosing using a single device or computer. This dramatically simplifies authentication and reduces the number of steps for your borrowers.

Now eClose using a tablet or other smart device!

With more borrowers using their mobile devices to participate in the mortgage process, we’re offering a more intuitive tablet-based experience. Now borrowers aren’t limited to eClosing only when they have access to a desktop or laptop computer. By giving borrowers the flexibility to eClose using any device, we've made the eClosing process, including Remote Online Notarization (RON), even simpler.

To learn how Total eClose™ can give your organization an advantage over your competition — and position you to handle revenue compression, just visit docmagic.com/total-eclose.

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Coastal Credit Union Chooses DocMagic’s Total eClose

We’re happy to announce that Coastal Credit Union has chosen DocMagic’s Total eClose solution for completely paperless electronic mortgage loan closings and completed their first eClosing ceremony using Remote Online Notarization (RON) in North Carolina. What’s more, we were able to implement fully digital eClosing with RON in only two weeks! 

“Every lender is progressing toward their own vision of digital mortgage lending, but few are bypassing the hybrid eClose and going directly to the completely electronic ceremony,” said Dominic Iannitti, president and CEO of DocMagic. “Not only did Coastal Credit Union go from traditional closings directly to fully electronic loan closings with Total eClose, but they completed that journey in a very short period of time.”

Many lenders are still operating under the mistaken assumption that the work involved in going fully electronic -- investor relations, servicer coordination, MERS connections, etc. -- will take many months to complete. As a result, many opt to enjoy the benefits of a hybrid eClosing process as an intermediary step in their transformation to fully digital lending.

Coastal did not want its members to wait for the benefits eClosing offers and chose a different path. The credit union’s management took advantage of the industry downturn to focus their attention on future-proofing their organization by implementing Total eClose. Management was committed to the process, but no one guessed they would be ready to eClose so quickly.

Within just a few weeks of the management team’s decision to go with DocMagic’s Total eClose solution, the credit union closed a mortgage loan for a member who was purchasing a home in North Carolina but was unable to leave Colorado to attend a traditional closing. The solution operated flawlessly, and its built-in RON capabilities made it possible for the member to close at their convenience.

Coastal was under an emergency order during COVID that allowed the use of RON. Afterward, as the state of North Carolina completed its RON Authorization legislation, the company reverted to IPEN (in-person electronic notarization) using an eNotary agent. Coastal can now close electronically in either manner.

“For us, it’s all about the member experience,” said Wendy Dawson, Vice President of Mortgage Lending at Coastal Credit Union. “We’re always looking for better ways to provide our members with a service that is convenient and accessible, wherever they find themselves. Total eClose provides a transparent and streamlined process through which our members' questions are answered before the closing so they can focus on more important issues -- like how to get the keys to their new homes.”

Coastal Credit Union is a not-for-profit, member-owned, financial cooperative, offering a full range of financial products and services.

 

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CFPB Announces 2023 Threshold Adjustment for HPML Appraisals

The CFPB, together with the Office of the Comptroller of the Currency and the Board of Governors of the Federal Reserve System, recently posted the annual adjustment to appraisal requirements for higher-priced mortgage loans (“HPMLs”). The new threshold will apply to loans in an amount not exceeding $31,100.

HPMLs are subject to additional appraisal requirements under Section 35 of Regulation Z, including the requirement to obtain two independent appraisals in some circumstances. 12 C.F.R. 1026.35(c). However, these rules do not apply to loans in the amount of $25,000 or less, with the $25,000 amount to be adjusted annually based on any annual percentage increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers (“CPI-W”) as of June 1, each year.

The Bureau of Labor Statistics reported the CPI-W on May 11, 2022 (based on data from April 2021 to April 2022). The CPI-W reflects an 8.9 percent increase over the 2022 threshold of $28.500, resulting in a new threshold of $31,000 that will be in effect as of January 1, 2023.

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FormAnalyzer 2.0 puts Form Management under your control!

FormAnalyzer™ by DocMagic allows users to view, manage, customize and configure their electronic forms from within a powerful, self-service web application. Powerful search capabilities enable review and analysis of the data elements and sophisticated programming we employ to render your documents. This dynamic tool lets users peruse document configuration settings, regulatory information and more — putting enhanced and advanced form management under user control.

FormAnalyzer™ provides access to DocMagic’s extensive forms library that includes 250,000+ documents. Some of the features include comprehensive search capabilities based on regulatory relevancy, keywords, programming strings, MISMO X-paths and more. The Preview feature has options for viewing documents with or without sample data, eliminating surprises and providing the opportunity to see a document exactly as the borrower would see it. With customizable configuration settings users can view high-level document metadata, including historical tracking and regulatory revisions.

FormAnalyzer™ provides users with next-generation tools to better manage documents and ultimately improve the borrower experience. 

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eSign Console Product Training

 

DocMagic's eSign Console allows you to easily access and manage loan document packages that have been processed in the past 90 days. You can also initiate the eSign experience on our user-friendly V3 signing platform.

 

Need to create a one-time request? Click here for instructions.

Click on the download button for an in-depth PDF Guide designed to provide you with step-by-step instructions for navigating eSign Console.
Click on the Wrench Icon to access a very helpful Hack for this product!
If you still need help, click on the Customer Service button to schedule a call with one of our trained professionals.

The Resurgence of Temporary Buydown Loans

In the current interest rate environment, we have noticed a resurgence of a loan feature which has been dormant for most of the past decade – temporary buydowns. A buydown temporarily reduces the loan interest rate, typically for only the two-to-three-year period following consummation, with the largest difference in the first year and adjusting slowly back up to the loan’s interest rate. This is called a “Step Rate” loan as the rate adjusts on a periodic basis but not on the basis of adjustments to any underlying interest rate like an adjustable-rate mortgage would. As a result of the resurgence, we have received many questions about how these buydowns should display on the disclosures.

How the Buydown is Displayed Depends on Who Pays for it

The main area of confusion for buydowns involves understanding when to expect to see the effect of the buydown in disclosures related to the payment and rate, specifically on the Loan Estimate and Closing Disclosure.

The TRID rule states that disclosures must reflect the terms of the legal agreement between the parties. It is for this reason that you will see a difference in how the payments and rate are disclosed based on who is paying the buydown subsidy at closing. When the buydown subsidy is paid by the borrower, the terms of the legal agreement between the lender and the borrower are that the buydown subsidy will be made available to reduce the regularly scheduled payments. In this case, the LE and CD will show the full effects of the buydown.

In a scenario where someone other than the borrower, e.g., the Lender or the Seller, or any other party, pays for the buydown, the terms of the Temporary Buydown Agreement must include a provision which states that, if for whatever reason the subsidy is not available for any payment, the borrower is responsible for the full payment of principal and interest (as if there were no buydown). Because of this provision (which is required under FNMA/FHLMC guidelines), when someone other than the borrower pays for the buydown, the payment and rate are not disclosed showing the effect of the buydown. Because of the possibility that the terms of the agreement between the parties would make the borrower responsible for the full payment amount at the actual interest rate, the worst-case scenario must be disclosed to the borrower on the LE and CD. In this case, the disclosures will ignore the effect of any buydown.

Showing a Buydown on the LE/CD

There are three areas where one may see an impact from a temporary buydown: the Loan Terms section, the Projected Payments, and the AIR Table.

When there is a temporary buydown paid by the borrower, the Loan Terms will reflect the fact that the payment and rate may change after consummation. Both the Payment Amount and Interest Rate will show a “YES” indicating these may change, with associated bullets to explain the changes that may occur. The rate disclosures will indicate that the rate may change with the frequency as indicated by the buydown, typically on an annual basis but it may also occur over a shorter period such as 6 months, and the point at which the highest rate will be achieved and what that rate would be, which typically would be the loan’s actual interest rate from which the rate was bought down.

A temporary buydown paid by anyone other than the borrower will show no difference in the Loan Terms section, disclosing no changes to the payment or rate after consummation.

For a fixed loan with a bought down rate and subsidy paid by the borrower, the Projected Payments will show the effects of the buydown on the adjustment period as set in the buydown, e.g., showing a payment adjustment on an annual basis as a result of the step rate, until the loan’s interest rate is achieved.

When a temporary buydown is paid by anyone other than the borrower there will be no change shown in the Projected Payments.

When a temporary buydown is paid by the borrower, the effects of the buydown must be disclosed in an AIR Table on the LE and CD. The AIR Table will indicate the number of adjustments that will occur during the temporary buydown, the starting rate and the minimum and maximum rates, as well as the frequency of the change in the rates and difference between each adjustment. If the subsidy is paid by anyone other than the borrower, the AIR table will not appear to show a buydown.

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