The Journey to the e-Mortgage/eClosing City
In June, 2006, I started on my journey down the eClosing/eMortgage road hoping by now, I would have reached the ever elusive Emerald City. My Emerald City is that glittering Green world that shimmers without paper and inefficiencies that plague our Title and Lending institutions.
I had such high hopes in June 2006 when I put together the first eClosings with Lenders for my company. What a glorious day of excitement and hope. The excitement stemmed from turning a paper laden process into a celebration around the closing table with Buyers, Sellers and Realtors that took 16 minutes to complete.
The buyer was thrilled because she only had to sign her name a couple times. One signature captured on a Signing pad was applied to all previously reviewed documents except the Note and Mortgage. She commented on how nice it was not to have to sign 40-60 pieces of paper as she had in the past. She was appreciative of being able to review her loan closing documents prior to the closing in the comfort of her own home without the pressures of people watching her.
The Seller commented on the brief time the closing took. Obviously, electronically signing her handful of documents and having the opportunity to review everything prior to the closing made the closing stress free.
The Realtors were impressed because there were no surprises and all parties were relaxed. They commented, this was much better than the traditional paper closings which took anywhere from one hour to an hour and a half.
The Lender was thrilled as he knew he had a quality set of closed documents with each document having the signatures in the right places. No signatures missing, no middle initials missing, no documents left behind when shipping. It provided a more efficient funding procedure and improved data integrity.
The Settlement Agent spent 15 minutes in a closing and did not have to make copy or shipping packages for all parties. Everybody had secure access to their pertinent documents housed within the online file.
Yes, that 1st eClosing in 2006 impressed all parties and then just as quickly as it happened, someone clicked their heels and collectively decided to return to the catatonic like processes that create time wasting, inefficient pothole craters on the road to the glimmering paperless eCity .
I reflect back on that June day and sometimes wonder if it really happened or was I struck in the head during a tornado and imagined all of it. No, I know it happened, I was there, media covered it, so there is proof! Fast forward to 2010, 4 years later....
Are we any closer to adopting eClosings and eMortgages? The answer is a quiet, deflated, but hopeful, Yes. Every time we seem to make progress along our yellow brick road, flying Monkey's swoop down and change our focus and halt our progress forward. Our flying monkeys have been the economy and the new HUD.
The economy was an enormous distraction for all parties. It is difficult to implement new processes when one is trying to concentrate on staying vital with reduced staffs and shrinking budgets. Just as the snow fell on the poppies and marketing efforts began to awaken, the HUD /RESPA Monkey flew in to divert focus and again halt eClosing efforts. However, this flying monkey has turned out to be somewhat helpful as electronic processes can focus on accuracy and make certain the timeframe requirements are met.
There has been progress and at times I can see the glittering light at the end of the road. I am experiencing a renewed interest from settlement agents looking at ways to market that set themselves apart in their marketplace. They are beginning to realize it is time to embrace processes that can create efficiencies as well as build strong partnerships with their customer base.
The eClosing/eMortgage function addresses current needs of the Lenders, Realtors and Settlement Agents. The ability to create and support a paperless file from the point of sale throughout the closing is paramount in directing and fulfilling a better process for all parties involved.
eClosings will benefit the Lenders by allowing all parties to collaborate throughout the process, monitoring progress in real time. The Lender will see improved data integrity, a more quality product, a better experience for the customer, less phone calls and faxes throughout the process, reduction in post closing errors, a reduction in overnight fees and paper costs. In addition the Lender's customers will experience a better customer experience and allow all parties the ability to contribute to a green initiative.
eClosings will benefit the Settlement agent by allowing for the collaboration throughout the process which eliminates surprises at the closing table. The Settlement agent will also realize benefits with a reduction in paper and overnight fees, supporting the Green initiative, less post closing issues after the fact, spending less than 20 minutes at the closing table enabling an ability to do more closings in a day with less stress. Thus the Agent will have the advantage of building strong partnerships with Lenders which will provide a far more convenient closing for everyone.
So why isn't everyone trying to figure out ways to support eClosings? It is still a process that is new and for the most part, all parties can still function and do function in the paper world. There are Lenders who have realized the many benefits of eClosing and demand that their loans be supported in an eClosing environment.
Certainly, there are many pieces and moving parts of deploying an eClosing environment. Those pieces and parts are all available, legal and compliant today. An office can support a complete eMortgage or in most cases a hybrid eMortgage/eClosing.
The complete eMortgage is where all loan documentation is created, executed, transferred and stored electronically. But, the reality is that most transactions are hybrid eMortgages. In the hybrid process we have to wet sign some documents due to external factors; i.e....county does not support eRecording; state does not allow eNotatarization; or Note is not a SMART Doc. However, in a hybrid eClosing we are able to still support 95% of the file in a paperless scenario. Being a pioneer in this "e" environment requires an office to embrace a change in known processes, mindset, philosophies and requires, a "CAN DO" attitude.
Over the next several blogs I am going to examine the pieces and parts necessary to engage in this new frontier and hopefully many of you will want to take this road to that "e"Emerald City, and it will be a journey that will be "e"xciting. "e"fficient, "e'ducational , "e"asy and absolutely
"e" seamless journey!
Nancy G. Pratt
Director of Business Development/eStrategy Manager
PropertyInfo Corporation /eMortgage Solutions