By: Dan Green for CUInsight
My wife and I recently closed on our eighth (and hopefully last) home purchase. This purchase, combined with the places we’ve rented, brings our total address count to about fourteen in just thirty years. That’s more than enough for a lifetime!
While this may be our last home, it is probably not our final mortgage. Who knows, maybe rates will go silly low again, or maybe there is a reverse mortgage in our future. What I do know is getting a mortgage on our new home was far easier than securing financing on our first home. Far faster, too.
The media constantly talks about how arduous the process is, how much documentation is required, and how much time it will take. The first two are certainly true. Mortgages still require a lot of paperwork. No surprise there, good mortgages always have. The difference today? Most of the paperwork is virtual; neither borrower nor lender have to physically schlep piles of paper to properly document the debt. Sure, all the old documentation is still required, plus some new, but it is mostly all available electronically. Click a button here, virtually sign there, and voila. All required documents land in the lender’s lap electronically. Almost magic, and super quick.
Technology has absolutely made loan origination far easier and more accurate. I cannot say I miss filling out a paper 1003. Both time consuming and tedious, all those little boxes make IRS forms seem almost spacious and simple. We originated this latest loan online while we made dinner. The next morning, our loan officer emailed to let us know what documentation they would need. Our disclosures arrived via email that morning as well, ready for our electronic signatures. I tended to sign on my laptop. My wife preferred her iPad. We even signed a set of documents while out for dinner via our smartphones.
The change between the first time we took out a home loan and this most recent experience is dramatic. We used lots of REAL ink and postage stamps back then. Enough to make almost anyone gasp by today’s standards. The process has greatly simplified over time, though there is still room for improvement.
The closing took place on the exact date we chose. Unfortunately, it was not electronic. Real paper, real pens, and in a real closing office. Absolutely no different than 25 years ago. The fact is that lenders, settlement agents, notaries and borrowers all have access to eSign/eClose tools. Many are simply not leveraging the widely available technology just yet, though there are a few hearty lenders that regularly close electronically. However, they are few and far between.
It’s time to make the last act of the mortgage process as easy as the first. Closing our mortgage the way we opened it – over dinner using our smartphones – would have been the ideal way to potentially end our homebuying career. Looking to differentiate your mortgage offering? Give borrowers the option to eSign and eClose. It’s the next step in making the mortgage process even easier.
By: Dan Green for Today's Lending Insights
A lender and I were talking the other day about fully paperless, completely electronic mortgage lending — what we now refer to as the digital mortgage. Digital mortgages live 100% in the virtual world. This is a big departure for our industry and from tradition: A mortgage is, or can be, a large collection of papers, often weighing three to five pounds, surrounded by a rather stiff cardboard carapace. Loans travel slowly and often chaotically through the mortgage manufacturing process with the help of any number of mortgage staffers. The goal is to go from application to closing as quickly as possible. Once closed, the loan is destined to spend eternity with other mortgage files in large, dark storage rooms where no one will ever pay attention to most of them again.
While many lenders are stuck sorting through paper, we’ve worked with one of the very first in the industry to make the move to digital lending. This lender’s willingness to trail blaze the digital mortgage process occurred for a host of practical reasons: efficiency, velocity, borrower communication, space.
None of this was easy. The transformation took about two years and was not without its difficulties. Not surprisingly, the hardest part of going digital is also the number one reason people don’t switch to e-readers: they do not want to abandon the paper experience.
If you’ve made the leap to an e-reader, this makes perfect sense. Books, like mortgage loans, are physical things. We interact with them in a particular way. How often, for example, do you flip back a few pages or a few chapters when reading a book to re-read a passage or an entire section? You know where in the book to look based on an approximate physical location in the book. Along the way you might stop and look at a few other things, too. This, at least in part, defines the paper experience.
So it is with mortgage loans. Files are constructed in certain ways. While a team member may have specific interest in the appraisal, he or she might take a look at the purchase agreement or the title report along the way, all to provide deeper context for the appraisal and the review. This is easy, because all of these items are in roughly the same place in every mortgage file.
The experience is different with a digital file, but only at first. Instead of flipping through pages, you click a few times, and you’re there. While this represents a change in the way people interact with the file, ultimately the experience proves to be more efficient.
Given the real and perceived complexities of transitioning your people from a paper-heavy process to a digital format, the question becomes, why go digital? As it turns out, borrowers like it. Loans can close more quickly than ever before, and borrowers appreciate getting their copy of the closing package electronically. Loan delivery takes place more quickly, too.
Then there’s the storage issue. No more paper means no more warehouses full of lonely, dusty mortgage files.
By the way, digital lending is nothing new for my lender friend. Her organization closed its first fully paperless, all-electronic mortgage in late 2008. Any lender with the right technology has the tools to make the switch to digital. The hardest part is giving up our love of paper. Once organizations go digital, however, they enjoy the benefits of a paperless environment. No one ever says, “Let’s go back to the way it used to be.”
DENVER, CO; Feb. 23, 2015 – Accenture (NYSE:ACN) introduced a new release of the Loan Fulfillment Center by Accenture Mortgage Cadence that offers e-signature functionality, enabling borrowers to electronically sign disclosures more easily and quickly, and with dramatically improved convenience and security.
The Loan Fulfillment Center, one of the two loan origination systems provided by Accenture Mortgage Cadence, is a cloud-based platform that offers credit unions, community banks and regional banks robust retail mortgage lending functionality through its Borrower Center, Document Center and Imaging Center solutions.
This latest release brings lenders closer to a completely electronic, wholly web-based mortgage process. The Loan Fulfillment Center with its new e-signature functionality delivers significant lender benefits:
“Enhancing process transparency and improving convenience support lenders and borrowers alike,” said Paul Wetzel, senior product line lead of Accenture Mortgage Cadence. “Offering e-signature functionality brings the Loan Fulfillment Center one step closer to enabling the completely digital mortgage. From application, to processing, underwriting, and closing, including a robust document service complete with e-signature and e-delivery provides additional convenience and efficiency for lenders and their customers.”