At the start of the pandemic, companies across America were abruptly forced to send their employees home and quickly scramble to adjust to remote work. But even though new lender MortgageCountry had just begun operations, its president, Ira Brownstein, wasn’t worried.

After all, MortgageCountry’s employees were already working remotely—because that’s how Brownstein structured the company. MortgageCountry’s unique, 100% virtual business model is just one reason why the company has not only survived but is thriving during one of the most challenging economic times in modern history.

Download the MortgageCountry case study

“You can be much more connected on a virtual basis and be much more productive, and we’re living proof—not by force, but by foresight,” Brownstein said.

The new company began accepting loan applications as most of the country was shutting down. And yet, with the help of DocMagic’s Total eClose and dynamic document generation solutions, MortgageCountry was able to implement an electronic workflow from start to finish in less than 30 days. 

MortgageCountry’s success has only continued since then:

• In its first month of accepting applications, it closed loans in an average of 13 days.
• It has partnered with the four largest financial institutions in the mortgage space—even though these institutions rarely partner with startups.
• It secured $35 million of mortgage credit facilities during an economic calamity, providing a runway to originate more than $700 million in annual mortgage originations.

How did MortgageCountry do it? In addition to their business model, they chose the right technology partners: DocMagic for document generation and eClosing, and LendingQB for its loan origination system (LOS) and point-of-sale system (POS).

This was key because MortgageCountry set up ambitious goals for onboarding and digital closings. A week before launch, they requested that all documents be digitally enabled and wanted their first closings to be hybrid and to close on a digital platform. DocMagic made it happen.

In retrospect, Brownstein admits he was taking a risk with such ambitious goals. “It was all new. I didn't come from an environment where we were closing loans digitally. We were closing loans the way most lenders close, with outdated wet signatures,” he said. “But I'm a big believer that you make a decision, do your due diligence, test your decision, and ensure that you mitigate risk, and we did that.”

To learn more about how MortgageCountry found success amid challenging economic conditions, download the free case study.

Related Content:

• The current state of eClosings: A Q&A with DocMagic's compliance chief (12/17/2020)
• Survey: Homebuyers adapt to eSignings, remote closings during pandemic (10/29/2020)
• Remote online notarization (RON) has several benefits beyond safety (10/22/2020)

The mortgage industry is undergoing unprecedented change, and lenders are weighing the move to eClosings—because in the current environment, it’s no longer a question of if, but when. Gavin Ales, DocMagic’s Chief Compliance Officer, shares his insights about the compliance issues these lenders are facing.

What is still needed to make eClosings—including eNotes—more mainstream?

eNotes and eClosings need to be more readily accepted by investors. Lenders need all or most of their investors to be willing to purchase the loans; otherwise, they’ll be forced to arrange specific transactions with specific investors. Lenders will be able to close a much larger number of loans electronically when they don’t have to do all the extra leg work of checking in with their investors to confirm that they’ll accept an eClosing.

Both eNotes—which are faster and more secure than paper notes—and eClosings require more global acceptance at county recorders’ offices. For example, a particular state’s law may allow an electronic notary on a mortgage, but if the recorder’s office won’t accept it electronically then that still presents a barrier. Lenders aren’t able to realize the full benefit of an eClosing if they still have to print it out and record a paper document.

The country is moving in the direction of digital mortgages; several states already allow electronic notarizations and more will be allowing the practice, but despite that, there is still the practical problem that not all county recorders have a process to electronically record a document. The laws have passed but the processes needed to carry them out are still not in place, so lenders may face a situation that even if a state allows eNotarizations, there may be recording offices that can’t process them.

What is one impediment to eClosing that is often overlooked?

One critical issue facing lenders is the availability of notaries who are able to conduct eClosings. In some cases, both the state and county recorder may be on board, but the difficulty may become finding an electronic notary. That’s something lenders aren’t thinking about. Having a ready and reliable supply of e-ready notaries would help lenders turn out eClosings just like any other loan. Even if a lender and investor are on board, an electronic notary still must be available. In a lot of states, electronic notaries must be specially registered, and the number of electronic notaries in those states are naturally lower.

What guidelines and regulations should lenders be aware of as they start to implement eClosings?

Lenders should first be aware of their own state laws as to what’s allowed and not allowed when it comes to notarizations. Some states require that lenders use a specific system or limit provider options to an approved list. Lenders also need to pay attention to investor guidelines, as to whether or not they accept electronic documents. Then the user must ensure that they have the full workflow covered, including setting up an eSign system, getting eVault access, and becoming a MERS member with access to the MERS eRegistry. Lenders also have to ensure their documents comply with Fannie Mae and Freddie Mac’s guidelines, such as having tamper-evident seals. Vendors such as DocMagic can ensure these requirements are met as part of our document generation solution.

From a compliance standpoint, how is RON an improvement over in-person notarizations?

Remote online notarization (RON) is a huge improvement over in-person notarization. Right now, there’s the obvious reason—in the middle of a pandemic, RON is far safer for people than being forced to meet in person to notarize loan documents. But even without a pandemic, RON would be the better choice, particularly when it comes to security. RON employs high-tech methods such as knowledge-based authentication and credential analysis to validate identification. In addition, the electronic document files must contain tamper-evident seals and the video of the signing session usually has to be stored for 10 years, both of which help to make the notarization process safer and more secure.

RON also makes it easier for borrowers to review loan documents ahead of the closing and for lenders to spot mistakes, such as missing signatures, sooner. RON is the culmination of a truly paperless eClosing.

Where is the state of eClosings headed next year?

eClosings will only grow in popularity. One look at eNote registrations is an indicator—they were already on the upswing, but the numbers have exploded compared with just last year. So far this year more than 400,000 eNotes have been registered, a 264% increase over last year, and the pace shows little sign of slowing.

The pandemic—and social distancing guidelines—have forced everyone’s hand. More companies are conducting business remotely and remote transactions have become more mainstream. Now that so many people are working from home, society is also moving away from the idea that everyone has to be in the same place when they’re working together. That mindset has also affected the mortgage industry, with more states allowing remote notarization and more borrowers wanting to conduct closings remotely. eClosings are just going to increase from here. The industry isn’t going backwards.

Related Content:

• DocMagic offers clients automatic audit of NMLS identification numbers (12/8/2020)
• IRS releases new form 4506-C (11/16/2020)
• CFPB's 5-year TRID assessment produces mixed results (10/15/2020)

Community State Bank, which has seven locations across southeast Wisconsin, has implemented DocMagic’s full suite of eClosing solutions and is now offering their customers a 100% digital mortgage process—something that’s key in the middle of a pandemic.

“During these times of uncertainty, it is extremely important that our team be able to adjust quickly in order to continue serving our customers safely,” said Scott Huedepohl, Community State Bank President and CEO. “We’re very honored to be able to provide both a high-tech experience, while still offering personalized service to guide our customers along the way.”

Community State Bank, founded in 1898, partnered with DocMagic to implement technology and help ensure the highest levels of customer safety during the pandemic. But in addition to safety, the bank also sought to offer borrowers a faster and more efficient loan process.

“By utilizing DocMagic, our mortgage team can now offer customers the option of signing mortgage documents electronically, from the moment they apply through closing,” said Community State Bank Vice President of Mortgage Operations Shakil Haider. 

Using the Total eClose platform, Community State Bank is also now offering remote online notarizations (RON), eNote generation, secure eVault storing capabilities, and direct connectivity to the MERS® eRegistry. Recently, MERS featured Community State Bank in its monthly newsletter, congratulating the lender for completing its integration. Community State Bank is, as of late November, one of just 74 originators integrated with the MERS eRegistry—nationwide.

“Community State Bank has put their customers’ needs at the forefront by implementing our automated, end-to-end lending platform,” said Dominic Iannitti, President and CEO at DocMagic. “We provide our clients with an agile and technology-forward mortgage process that ensures they can sustain and scale critical business processes.”

Customers have praised the new digital process. Gary Strand, who recently closed a mortgage with Community State Bank, noted, “Our experience was very simple from start to finish. Having the option to close our loan online shows they are willing to accommodate their customers’ needs and busy schedules while also keeping safety in mind during the pandemic.”

Related Content:

• DocMagic, VirPack integrate platforms (10/1/2020)
• DocMagic teams up with Simplifile to facilitate eClosing adoption (7/27/2020)
• MortgageCountry closing loans in 13 days using DocMagic solutions (7/21/2020)

Homeowners have adapted well to eSignings and remote closings and are very satisfied with their overall closing experience, according to a new national survey of people who bought and refinanced homes during the COVID-19 pandemic.

“As we’ve seen throughout 2020, this crisis is accelerating adoption and acceptance of e-transactions, and when things return to normal, eSigning and eClosings will be the new normal,” said Bob Jennings, CEO of ClosingCorp, a residential real estate closing cost data and technology firm, which sponsored the survey.

The survey comprised phone interviews with 691 borrowers nationwide who had conducted a mortgage transaction between March 15 and Aug. 31. Among the respondents, 15% were homebuyers, 79% were refinance customers, and 6% were both. About 35% were first-time homebuyers.

The findings included:

• 95% of borrowers said their closings were efficient and 90% said they were satisfied with their closings. Most of the transactions involved eSigning and remote closings.
• 89% of homebuyers and 84% of refinance customers eSigned either their disclosure, closing documents, or both.
• 55% of the surveyed borrowers said their closings were conducted remotely and not in traditional locations, such as a title company or lender’s office.

The borrowers who were less comfortable with remote closings were older (age 55 and up).

The results bode well for the mortgage industry’s trend toward digitization. More than two-thirds of survey participants say that for future transactions they’d prefer remote closings to in-person closings, and 82% reported that they prefer eSigning documents prior to closing.

DocMagic's Director of Enterprise Solutions Chris Lewis said the survey results are a positive sign for the industry: “It’s unfortunate that it took a pandemic to move the adoption curve in the right direction, but ultimately, it’s going to serve the mortgage industry well by further automating the paper-based processes of yesteryear that were hampering business-to-business as well as business-to-consumer efficiency."

DocMagic provides a full suite of digital mortgage solutions, including eSignatures and Total eClose, a comprehensive solution that enables a 100% paperless eClosing process from start to finish.

The study was jointly designed by STRATMOR Group.

“Despite the disruption caused by the pandemic and the workarounds that the lending and title companies have had to quickly put in place, borrowers continue to be satisfied with the mortgage closing process,” said Jim Cameron, Senior Partner at STRATMOR Group. “It suggests that the more electronic—or ‘e’—each step in the process becomes, the higher the satisfaction.”

Related Content:

• Benefits of remote online notarization (RON) can't be overstated (10/22/2020) 
• CFPB's 5-year TRID assessment produces mixed results (10/15/2020) 
• Ginnie Mae, 3 FHLBanks start accepting eNotes (8/5/2020) 

Remote online notarization (RON) eClosings have been on the rise during the age of COVID-19, as they’re seen as the safest closing option during a time when social distancing is paramount.

“It’s the nirvana of every stakeholder’s closing experience because the borrower can join the eClosing from the comfort and, more importantly, the safety of their home,” said DocMagic Senior Account Executive Leah Sommerville.

However, RON eClosings include several other benefits which make them an increasingly popular choice in the mortgage industry, regardless of whether there’s a pandemic taking place.

1. It’s easier for borrowers to review closing documents.

With RON and other forms of eClosings, borrowers typically receive all documents before the closing, giving them plenty of time to review the entire closing document package and raise any issues.

“If you’re a first-time homebuyer, it can be intimidating to show up and be expected to sign a stack of documents that you’ve never seen before,” Sommerville said. “Even seasoned borrowers can be intimidated by the in-person closing session. eClosing provides borrowers the opportunity to review all of their closing documents in advance and contact their lender, settlement agent, attorney, or even parents if they have any questions."

2. Lenders can spot mistakes sooner.

In the paper world, lenders often email their loan documents to their business partners (e.g. the title agency, settlement agent, or attorney for review) and then wait for the closing package to be mailed back with title documents added—which the lender unfortunately won’t see until they get the closing documents back with all the signatures.

“Often, lenders receive returned closing packages with signatures or documents missing,” Sommerville said. “No one wants to send a mobile notary to revisit the borrower because the original notary’s signature is missing or the notary stamp is smudged. These issues are eliminated with any version of eNotarization and eClosing.”

Such mistakes also compound the negative effects, Sommerville noted, with more fees incurred as the lender continues to hold the note, unable to sell it to the secondary market until these issues can be resolved.

3. Settlement agents stay involved.

A common misconception about RON is that it takes control of the closing out of the settlement agent’s hands. With RON, the settlement agent can still be involved in the eClosing and signing session.

Some RON providers will allow the settlement agent to join the session as an observer. Additionally, both the settlement agent and the lender, who aren’t required to be present for the closing, can log into the eNotary platform and see when the closing is scheduled, which increases transparency for all stakeholders.

4. There’s built-in protection and compliance.

RON laws have a variety of requirements to protect stakeholders. For example, the eNotary must have a record of the ID validation (most commonly knowledge-based authentication and credential analysis), which confirms that the borrowers’ identity is valid and not fraudulent. DocMagic and our electronic notary partners can conduct these ID validation requirements with the borrower on behalf of the lender.

Most states also require that video of the RON closing session is stored, usually for 10 years. Florida even requires the video to be stored in two locations.

Additionally, the documents must contain tamper-evident seals. DocMagic’s eSignature platform applies a time- and date-stamp as soon as the borrower eSigns, with a tamper-evident seal on each document. If a document is modified post-closing then the signatures are voided, according to Sommerville.

“RON is the greatly needed improvement to the current in-person, paper notary closing process because of the enhanced borrower experience, reduction of errors, increased transparency, and confirmation of compliance,” Sommerville said.

Related Content:

• 5 key questions about ID validation during RON (8/12/2020)
• RON update: Lots of forward momentum—but also a setback (6/26/2020)
• RON vs. RIN (remote ink-signed notarization): What's the difference? (6/10/2020)

The pandemic has forced a lot of change in a short amount of time in the mortgage industry. DocMagic's Director of Enterprise Solutions, Chris Lewis, shares his insight about eClosings in the age of COVID-19. (Note: This interview has been adapted from in the August edition of The MORTGAGE BANKER magazine.)

1. About what percentage of mortgage closings were 100% paperless before the pandemic compared to now?

Things are moving so fast with the uptick in lender rush to perform eClosings that we’ve never been busier here at DocMagic. Whereas over the years eClosings were slowly but surely moving toward greater marketplace adoption, the rapid onslaught of COVID-19 absolutely sped things up virtually overnight. Add unprecedentedly low rates into the equation—sparking a refi boom—and things have hit a level of adoption that is on turbo with eClosing and dynamic document generation usage.

2. During the pandemic, has DocMagic had to make any adjustments to the way it handles eClosings and remote online notarization (RON)?

DocMagic has been doing eClosings for years—long before the term became a catchy buzzword. Furthermore, before the term “digital mortgage” caught on, we were busy automating eMortgage processes, which was the same thing. With respect to where we were at during the pandemic, the main adjustment we made didn’t have anything to do with the technology; we mastered the solution long ago. We just had to start implementing and training lenders on our Total eClose platform remotely, as the country was and still largely is under work-from-home orders depending on the state the lenders operate in.

Chris Lewis: Don't rush to implement RON; take these 3 steps instead

We worked diligently to arrive at a remote onboarding model that effectively supports distance-based implementations involving multiple teams and parties—all performed remotely. We quickly perfected implementing, training, and fully onboarding new clients remotely, to the point that once implemented, the lenders were off to the races and performing eClosings with ease and efficiency.

It’s tough enough for companies to turn on a dime and establish a work-from-home infrastructure due to a rapidly spreading pandemic. From an operations management perspective, our client services team did an amazing job transitioning to functioning virtually while simultaneously coordinating an influx of new client implementations—also done virtually.

3. What are the less-obvious advantages to using eSignatures and RON to close a mortgage loan?

The use of eSigning gives both lenders and borrowers greater transparency and control of the overall process. Borrowers can easily access and sign documents within a secure digital environment. It’s fast, easy, and completely trackable. The detailed traceability of eSignings enables lenders to more effectively manage the workflow from anywhere and store signed documents securely with an encrypted, tamper-proof seal. This helps in two key areas, as paper-based wet signatures are much tougher to track and access, especially as loans exchange hands on the secondary market and are then serviced.

First, it helps tremendously with ensuring compliance and that the data on every single document is accurate and consistent; it’s also easy to demonstrate proof of compliance in the event of an audit. Second, it helps prevent instances of fraud, especially when the loan file, data, and documents are all stored in a GSE-certified eVault.

When it comes to remote online notarizations, the convenience and enhanced speed gained in signing documents requiring notarizations are immeasurable. What’s more, use of RON technology fills the final void in establishing a 100% paperless closing process. The hybrid model has almost become mainstream. Borrowers are now expecting that option. Moving forward, lenders should always be focused on offering a fully paperless option for borrowers to take advantage of in the states that permit it.

4. In the pandemic environment, is compliance tougher or the same where eSignatures and RON are concerned?

A lot of states have different rules behind the acceptance of RON technology. For example, some require an attorney to be present and some do not. Some states didn’t offer RON at all but were considering it. So it has always been something that vendors need to stay on top of.

The pandemic resulted in a huge spike in the need for RON technology due to social distancing requirements and borrowers’ fears of contracting the virus. Consequently, many states started implementing emergency measures to help notaries do their jobs safely and effectively. However, some states haven’t implemented RON guidelines, or had stopgap measures which prevented fully leveraging RON technology, or offered some lower-tech alternatives to RON such as remote ink-signed notarization (RIN).

Like with RON, RIN permits notaries to use videoconferencing technology to legally notarize documents remotely. However, it requires actually wet-signing paper documents as opposed to utilizing eSign and eNotary technology. So the RON vs. RIN difference adds a bit more confusion to the already constantly changing and complicated state regulations. Some states allow RON, some allow RIN, and others allow both. In that regard, it just requires more attention to what the states are doing. But that’s the technology provider’s job to worry about, not the lender.

5. Are eSignatures and RON the new norm for the mortgage industry?

Yes. Like work-from-home orders essentially serving as a giant case study that proved the telecommute model actually works, the same goes for eSignings, RON, and eClosing technology. It works, and it works very well. It’s just unfortunate that it took a pandemic to move the adoption curve in the right direction. But ultimately, it’s going to serve the mortgage industry well by further automating the paper-based processes of yesteryear that was hampering business-to-business as well as business-to-consumer efficiency.

Related Content:

• Ginnie Mae, 3 FHLBanks start accepting eNotes (8/5/2020)
• MortgageCountry closing loans in 13 days using DocMagic solutions (7/21/2020)
• RON update: Lots of forward momentum—but also a setback (6/26/2020)

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.

“Why are we launching this new award you might ask? Because we live in unusual times,” the association stated. “The impact of COVID-19 shows us that it’s time to think outside of the box so we can move forward as a country and a world. … We need thought leaders that are not afraid to step forward and blaze a new trail. We need creativity. We need bold new ideas.”

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.

Lenders “need solutions that are not only complete but also flexible enough to meet the needs of their partners. eClosing solution providers must push innovation forward so that they can adapt to their lender loan requirements on a per-transaction basis. The onset of alternative notary solutions (e.g. in-person electronic notarization, remote online notarization, remote ink-signed notarization, drop-off notarization, drive-by notarization, etc.), eSign offerings (e.g. power of attorney) and being able to electronically record documents at the county level, require solutions providers who can do it all,” he continued.

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.

Related Content:

• 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)

The coronavirus pandemic has led to wide-ranging industry acceptance of eMortgages, eNotes, and digital closings, according to a recent article in National Mortgage News (subscription required).

Even before the pandemic, eMortgage transactions were on the rise. In April 2019, the MERS eRegistry saw 8,338 eNotes registered; by March 2020, that number had shot up to 24,519, an all-time high.

To learn road-tested eClosing strategies you can implement now, join our free webinar on May 27.

Since then the momentum has swung even more toward eClosings. Since March at least 20 states have taken emergency action to allow temporary remote online notarization (RON)—considered crucial in the age of social distancing—joining 23 states with permanent RON laws on the books. At the same time lenders are rushing to implement systems that utilize RON and electronic documents. 

DocMagic Chief eServices Executive Brian Pannell noted that DocMagic can have clients set up for hybrid eClosings (including eSign and ancillary documents) in as little as 24 to 48 hours.

“Key to implementing a smooth e-close process is ensuring the lender's workflow is well thought out ... which we hold our clients' hands in doing," he told National Mortgage News. "That includes ensuring all docs are e-enabled and leverages a single-source platform with both hybrid and RON capability. We can implement a completely digital and fully paperless total e-close in 17 days, and e-enabled dynamic docs is critical to that."

To learn more, read the article (subscription required).

Related Content:

• Improving the Loan Process With eNotes
• 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)

eClosing just got a lot easier because DocMagic’s new AutoPrep technology can convert ANY document from ANY lender into a compliant e-enabled document that’s ready for electronic signature inside our eClosing platform.

One of the drivers behind the development of AutoPrep was a 2019 independent technology survey of the mortgage industry conducted by STRATMOR. It ranked DocMagic’s Total eClose™ solution as the No. 1 eClosing platform for market share, overall satisfaction, and Lender Loyalty Score®. 

We felt that it was critical for us to be able to work with any lender to ingest any document—and that’s exactly what AutoPrep does, allowing our Total eClose™ platform to accept documents, even non-e-enabled documents, from any source.

How does AutoPrep work?

This technology can transform any standard document or PDF, even partially e-enabled ones, into a fully e-enabled document in seconds. It uses artificial intelligence, OCR, and machine learning technologies to scan and parse documents, locate all signature and notary regions, and then electronically tag them for eClosing. As a result, lenders can use loan documents produced by virtually any document provider with our Total eClose™ platform.

AutoPrep can also:

• Learn the nuances of specific documents and adjust accordingly going forward.
• Identify whether signatures are improperly placed or missing.
• Find e-tags placed by other providers.
• Read documents that have been partially, but not fully, converted into e-enabled documents.

In addition, AutoPrep can identify situations that are outside the norm and flag documents for personnel, saving them the time and trouble of having to comb over every page of a document package.

While eClosings are known to be more efficient and compliant, they aren’t nearly as common in the mortgage industry as they should be. One reason is because some lenders are tied to systems that don’t produce e-enabled documents. With AutoPrep, we’re pleased to say that roadblock is removed.

Docmagic

 

Providing borrowers with a simple, streamlined eClosing process is critical in today’s competitive mortgage industry. From a borrower standpoint, eClosings can add convenience and improve the overall customer experience. For lenders themselves, they equal faster funding, greater flexibility, and better loan quality. Additionally, they also allow for quicker delivery to the secondary market.

Brian Pannell on the keys to successful digital implementation

Providing borrowers with a simple, streamlined eClosing process is critical in today’s competitive mortgage industry. From a borrower standpoint, eClosings can add convenience and improve the overall customer experience. For lenders themselves, they equal faster funding, greater flexibility, and better loan quality. Additionally, they also allow for quicker delivery to the secondary market.

Still, enabling eClosing is complex, and it takes the right partners — both up-front and downstream — if you’re going to do it right. HousingWire's Sarah Wheeler sat down with Brian Pannell, senior implementation executive at DocMagic, to find out how lenders are navigating these complexities and how DocMagic can help.

Q: What do lenders need to get started?

Brian: The first step is to have a clear picture of your loan lifecycle. To understand this, you need to know who will be funding your loans, who will service them, and who you’ll eventually sell them to.

If you’re planning to outsource any of these steps in the loan process, then you’ll need to know up-front and early on who those partners will be, as well as what technologies and capabilities they have at their disposal. Ultimately, they’ll need to be an integrated part of your loan system, with the ability to communicate securely, share and access borrower documents, and transfer eNotes securely.

Q: What technologies will I need to begin eClosings?

Brian: The most important technology you’ll need is a comprehensive, start-to-finish eClosing platform. The platform needs to take a loan from initial application, allowing you to upload or digitize existing documents for signature, all the way through the closing process, final notarization, and eventually, storing the loan, registering it with MERS, and delivering it to your secondary investor.

It sounds like a lot, but there are platforms out there can do it. It’s just a matter of finding the right platform, as well as a title company that’s accustomed to working within that platform on a daily basis. Your title company and your technology provider are your all-stars when it comes to your eClosing team. Choose them wisely.

Your eClosing platform should allow for:

Digital delivery of documents - You should be able to upload or integrate your existing documents, as well as auto-recognize and enable e-signature fields on them.
Pre-closing collaboration - The platform should allow consumers to view and sign initial documents and collaborate with their title company, the lender, and their attorney, if necessary.
Fully online closing procedures - Borrowers should be able to eSign their documents and have their closing paperwork notarized in a fully digital landscape. You should also have the ability to scan and digitize wet-signed papers, as well as register the eNote on MERS.
Post-closing wrap-up - Once closing is over, borrowers should be able to access their closing documents remotely. The platform should also allow for storing the loan via eVault and transferring the loan to the secondary market.

Q: What is one of the common hurdles many lenders encounter when implementing eClosing?

Brian: Once you have the technology in place, there are still a few hurdles that can hold up your eClosing efforts. One of these is that eNotary and eRecording services may not be an option, depending on where your borrower is located.

Nearly 2,000 U.S. counties currently support eRecording, covering about 85 percent of the population, but still, there are pockets where this process is not allowed. There are also 15 states that don’t currently allow eNotary services. Keep this in mind as you move to implement your eClosing efforts and as you communicate with borrowers about their digital expectations.

Despite this, we expect the eNote movement to continue growing across the country. Just this year, the industry has originated nearly 40,000 eNote-based loans, accounting for more than $8 billion borrowed. That marks a 200-percent jump in just the last few years. With more counties, states, and lenders entering the space at breakneck speeds, those numbers are poised to grow exponentially in the years to come.

Q. What are some critical implementation requirements organizations often underestimate?

Brian: What is oftentimes overlooked is the unwavering commitment lenders need to have to eClosing adoption. The directive to provide eClosings should come from the C-suite and trickle down to the operational level. When it does, executives, operations and loan officers are all kept on the same page. The motivations for each party may differ but the main goal remains the same.

During successful digital implementations, every key player involved realizes that this is transforming the business process, not just a sales cycle event. Management should also understand that going through the change in processes comes with possible bumps in the road but shifting to new vendor partners will ultimately provide a more efficient and better workflow — resulting in a better borrower experience.

Learn more about DocMagic's seamless and compliant digital platforms for completely paperless eClosings.