eClose: What Lenders Need Besides Technology

By now, virtually everyone in the mortgage lending industry knows the benefits of digital lending and about the market forces driving us toward the electronic loan closing. The days of debating whether eClose will become a reality in our business are far behind us.  

The COVID crisis provided clear evidence that our industry has the technology and the ability to close loans over distance. And yet, many lenders are still working to make the eClose a standard part of their loan origination process. 

As they make their way along their own personal journeys to digital, many are focusing first on technology. As part of one of the most successful mortgage technology developers in the industry, I can appreciate that. It takes good technology to create a satisfying loan closing ceremony for your borrower, which is the only way to ensure high borrower satisfaction. You can do everything else right and mess up the closing and your client and real estate agent satisfaction will suffer.

Seamless integrations between your document providers and your LOS (if your LOS requires you to use outside document generation partners) are critically important, as are good connections between your LOS and the eClose and eVault technology partners. Much depends upon the tech stack the lender will employ for digital lending. 

Unfortunately, good technology is only one of the critical success factors required to get lenders past the eClose finish line. 

Complexity management is a requirement 

Closing a refinance loan virtually is one thing. You have a borrower and a lender. While there is a closing agent involved, the parties to the transaction make this fairly straightforward. A purchase money loan is different. 

When a new home is added to the mix, we now have a buyer, a seller, two real estate agents and a lender. There could be attorneys involved and the title company may play a larger role. Suddenly, the transaction becomes complex. 

In the early days, some eClosing systems struggled to manage this complexity. It took some time to work out the kinks. Today, tools like DocuSign Rooms, which is tightly integrated into the Mortgage Cadence Platform (MCP), handle this complexity with ease.

The technology is just the doorway, the real key to success is having trained people who can get all of the parties into the room and feeling comfortable so business can be transacted. This will come with more experience, but it’s every bit as important as the technologies employed. 

Paving the final mile 

The other key to an always on digital lending process will be getting those jurisdictions that are not yet prepared to transact digitally up to speed with technology and training. 

While it’s true that the nation’s largest real estate markets are already digital from property search to public record filing, many smaller counties are still working to get there. This will take time and until it’s complete, the lender’s technology must be capable of papering out whatever documents are required to consummate the deal. 

The pandemic was painful for so many people, but not everything that came out of it was bad. Our experience with electronic loan closings during COVID demonstrated what was possible with the technology we have today. Now, we need to get our industry well-trained on the use of these tools and help every partner in the value chain come up to speed with the rest of us. 

It’s time to focus a bit of energy on these other keys to eClose success. As we do so, we are confident that all lenders will eventually reach their digital lending goals. 

By Joe Camerieri, EVP, Client Account Management at Mortgage Cadence 

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