It may seem incredible that the average mortgage originator is spending about $3 million more each year than top performing lenders to originate the same loan products.
I know this to be true because for the last six years I’ve been running our Mortgage Cadence performance benchmarking study. I’ve stopped apologizing for my love of data. Instead, I’ve embraced it by digging into what the best lenders are doing right. As a class, they are reducing their cost to close. They accomplish this by optimizing the other four key performance indicators. These metrics are the easiest way to spot a high-performance lender.
The key to high-performance lending
What the best lenders are doing is reducing their cost to close by millions each year. Then, they are reinvesting that money in growing their businesses. You may have heard me speak about high-performance lending at this year’s Ascent Mortgage Cadence users conference.
They are accomplishing this by optimizing the performance equation. They are combining the right people, process and technology for optimal lending performance. Meanwhile, everyone else is struggling through a market so competitive that experts are predicting that some mortgage banking firms just won’t make it.
Our study focused on credit unions and community banks, where every dollar counts. If you work in one of these institutions, you can probably imagine what you could do with that kind of money. But becoming a high-performance lender can save even more money for the nation’s largest banks.
The MBA’s survey on origination costs saw a new high earlier this year when it reported that the cost to originate a mortgage had risen to $8,475 in March. Then, in June, it rose even higher with the survey respondents reporting a cost to close of $8,887 per loan!
Meanwhile, the trade group reported at its recent Secondary Market conference in New York that lenders’ first quarter income will dip into negative numbers for the first time since the first quarter of 2014. This is a vicious cycle lenders have been caught in for more than eight years.
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Finding your $3 million
Becoming a high-performance lender will reduce the cost to close. Our data shows the average lender will save $3 million per year. It will also provide the cash cushion required to insulate lenders from the twin terrors of extremely high cost to originate and persistent low profitability. Lenders have been trapped between them for years.
In this series, we are exploring what it takes to be a high performing lender. Stay with us and we’ll shine a bright light on what the nation’s best lenders are doing right. Then, you can start thinking about what you’ll do with your extra $3 million per year.
Today’s mortgage borrowers are similar in most respects to those we see using social media and shopping online. The customers we want to appeal to and interact with are the same customers who are making purchases and decisions elsewhere in the modern market. This means we can learn more about them by studying what they expect from these other experiences.
What do they expect? How do they respond if they are unhappy? How can the mortgage industry meet their needs and expectations?
What is shaping modern customer expectations?
To answer this question, let's look at what consumers say they expect out of the other vendors they patronize.
Social media has become a ubiquitous tool for the modern shopper. Customers are likely to research businesses in advance. They check reviews to see what other consumers say and may even test a new relationship by interacting with a business just to see how responsive the staff is. They expect to find information about and written by the companies they may do business with online.
Online shopping is one of the best places to go to learn about customer expectations. Amazon, Apple and eBay have been shaping what customers expect when making purchases online. What customers want is to be able to find exactly what they’re looking for — easily and quickly — and not to pay too much.
Mortgage borrowers are likely to compare their mortgage experience with their online banking experience. Modern financial institutions are giving consumers access to all of their information in one place, right in front of them. They have their accounts at their fingertips and the ability to make changes rapidly.
What do today’s borrowers want?
If we take the lessons we can learn from other online experiences and apply them to our own customers, we get a good picture of what today's borrowers want.
Most online vendors are highly adept at personalization. They know what to recommend to customers based on what they have looked at or purchased in the past. They can tailor their customers’ experiences (including payment, delivery options, etc.) to fit their preferences.
Immediate Customer Service
Many websites today come equipped with chat functionality. Customers can type in any question and receive a response back within minutes. This has resulting in customers becoming quite used to having immediate access to customer service. Consequently, waiting for an email response now feels too tedious in a world of instantaneous communication.
Humans are driven to whatever will be the least work and involve the least stress. The fewer buttons they have to click, the fewer things they have to type, the fewer other places they have to go, and the less legwork they have to do, the better. In most cases, this means that everything is done in one place. It also means that the consumer has to do less to get satisfaction.
One of the things modern customers seek most consistently is speed. They don’t want to wait for people to get back to them. Customers want to do their part of the process and have the rest handled automatically. They seek to finish their purchase quickly. Modern customers are much more likely to move on if they experience a hang-up or delay.
What happens if it all goes wrong?
So what happens if customers are displeased? Well, nothing good. With more options than ever to choose from in every market, customers are more liable than ever to walk away from a business and never return. Why would they waste their time with you if they have already had one bad or underwhelming experience? There are plenty of other places to go.
To make matters worse, people spread the word — for better or worse. If a customer really likes a business, they are likely to tell others — either with online reviews or word-of-mouth. The same will happen if they have a bad experience.
Giving mortgage borrowers the experience they expect.
Given all of this, what can we say about delivering the kinds of experiences our customers want?
Have Good Technology
One of the best ways to make customers happy today is by utilizing modern, up-to-date, easy-to-use technology. Make sure your website is smooth and intuitive. And make sure that your systems are speedy, accurate, low-stress, easy-to-understand, and that as much as possible the customer can do everything in one place.
Prioritize Customer Service
Tech alone won’t make happy customers. They will need to have access to real people whenever the need arises. It's important that human contact can be delivered quickly and easily. Many mortgage customers still prefer to come into a physical location to speak to a mortgage professional. So, it should also be easy to get to a loan officer in a clean, modern, and easy to find office. Maintaining top-notch customer service is crucial — it isn’t going away.
Keep Making Improvements
Keep looking for ways to make your customers’ lives easier. This is all about them, after all. You need them, and the happier they are, the better for your business. Remember that the easier you make things for them, the more likely they will be to return to you, and to send other people your way as well.
Operational efficiency means that your business runs the way it was meant to run. It means that the firm accomplishes what management has set out to do, and it doesn’t waste resources along the way. In the mortgage industry, this results in satisfied customers, more closed loans, higher profitability, and regulatory compliance.
The two best metrics for measuring operational efficiency are Velocity and Productivity.
In a recent article entitled, The Key to Increasing Your Lending Team’s Productivity. we looked at how knowing their productivity rate helps lenders assess the effectiveness of their people and process. How many loans is your team closing each month? The higher the ratio of closed loans to staff members, the more productive your origination business is.
Two keys to productivity that we looked at were maintaining low labor costs and cross-training employees. But productivity alone does not guarantee operational efficiency.
A team can be highly productive, but if they can't close loans quickly they won't be closing as many loans as they could. They will often lose out to lenders who have higher loan velocity.
In another recent article, 5 Ways High Performing Lenders Set Themselves Apart, we examined the necessity of innovation and teamwork. These are essential if loan velocity is to be both achieved and consistently maintained. It takes good people and the right technology to close loans quickly.
The Key to Operational Efficiency
So, what is the key to achieving and maintaining efficiency in the lending business? Productivity depends upon having good people and velocity is often a factor of the right technology. But without a solid, thoughtfully designed process in place, neither productivity nor velocity, on their own, will guarantee efficiency.
Process is the key to operational efficiency.
Find out more by participating in our annual benchmarking study. Call us today to find out more.
As an innate feature of Mortgage Cadence’s LOS, Borrower Center creates a fully integrated digital experience for borrowers
Featured in HousingWire's Mortgage Tech Product Showcase
Recognizing that high-performance lending depends on the interplay of people, process, and technology, Mortgage Cadence solves for inefficiencies in the origination process. They knew the creation of an experience that made it easier for borrowers to shop, compare, and apply for a mortgage, while simultaneously creating a lending experience that increased efficiencies through automated workflows, would provide the industry with the most innovative lending solution on the market.
As part of their comprehensive approach to revolutionizing the mortgage process, Mortgage Cadence developed Borrower Center, an intuitive online origination platform, to meet these needs.
Rather than a standalone portal, Borrower Center is a native element of Mortgage Cadence’s Loan Origination Systems, Enterprise Lending Center and Loan Fulfillment Center. As an innate feature of the LOS, Borrower Center creates a fully integrated and comprehensive digital experience that automates vendor services, runs AUS, initiates loan estimates, and generates pre-approvals.
Read more here.
The metrics that reveals high performance lending & overall profitability in the mortgage industry.
Traditionally, summer is the peak of the new home buying season, but currently the industry is struggling. While the MBA has not revised its most recent annual loan volume prediction downward, competition for overall profitability through new mortgage business comes down to high performance lending.
This shouldn’t surprise anyone, as the Mortgage Bankers Association (MBA) told us in October, 2018 that this would be a tougher year for lenders. Overall, MBA now expects mortgage business to decline 3 percent from last year to about $1.6 trillion in 2018. The refinance share will fall off dramatically but purchase money business is expected to increase to about $1.2 trillion this year. MBA said earlier this year that it expects to see rates rise another four times this year. Since then, the Fed has already raised rates once. There’s an upside to rising rates, however. They spark FOMO (fear of missing out); buyers don’t want to miss their chance at a low rate.
This means that all lenders must target purchase money business to at least hold on to their historic volume numbers. This will be increasingly difficult, as Freddie Mac increased its expectation for mortgage interest rates in February, moving the dial on the 30-year-fixed rate mortgage to 4.6 percent, on average, for 2018.
The need to compete
The need to be competitive in the mortgage lending business has never been greater. Fortunately, depository lenders have an advantage in this area as their existing customer base is a ready-made prospect database for mortgage lending, if they can tap it. Historically, this has been very difficult to do.
Six years ago, we began performing an annual study to determine exactly what impact technology could have on a lender’s ability to be a high performance lender, not just from existing customers, but from the greater community the institution serves. In the process, we learned a great deal about how lenders define their success and how, as a segment of the overall mortgage lending industry, these firms performed competitively.
In all, we found five critical measurements, five key performance indicators (KPIs), that when taken together tell us – and lenders – exactly how any lender is performing. Even better, we aggregated the data from a number of institutions, all using the same technology in their lending departments, to arrive at a set of benchmarking data that, once understood, places lenders on the path to high performance lending. This research is now known as the Mortgage Cadence Benchmarking Study.
Why use benchmark assessments?
Knowing where you stand in regard to the five KPIs we are about to define in any given year is very important. It is a good management tool that informs decision making and reveals the institution’s progress on its mission and objectives.
Understanding performance over a period of years is even more valuable. It shows how management and staff react to market forces, and how well the institution is able to adapt its business to those changing forces and continue down the path of high performance lending.
But without benchmarking data to compare the institution’s performance to the broader set of competitors, it only reveals part of the story. There are many good reasons every institution should be benchmarking their lending performance against a larger industry dataset. And that’s what our study does: if understanding your own performance over a period of time is valuable, then comparing your performance to that of your peers over the same period of time is invaluable. This is especially true in a year when we know competition for a limited number of new purchase money mortgage transactions will be fierce.
Leveling the playing field.
The battle for this business will not be a one-year phenomenon. Market forecasts through 2020 predict that 75 percent of all mortgages through that time will be for the purchase of a home. This marks the beginning of a new mortgage lending era, foreshadowing an end to the historic boom-bust refinance cycles that dictated strategy and tactics for more than 30 years.
Unfortunately, benchmarking data is difficult to come by. Studies comparing and contrasting lender-to-lender performance are challenging because gathering data from a homogeneous set of lenders is difficult, both in terms of finding such a set and in getting those firms to give up the required information. While there are some excellent studies performed by national trade associations, they often compare very different institutions, rendering their results less useful.
Our study addresses this by focusing on a homogeneous set of lending institutions that all submit data to a regulator that makes that information public. In addition, we went back to the lenders in our study and asked for additional information to complete our data set. Since there were only a few data points required to complete our analysis, we enjoyed a high degree of participation from the lenders.
We know that there are three factors that influence the performance of a lending institution: their people, their process and their technology. The way the lender combines these three critical elements will determine their performance lift. Getting them right results in high performance lending. The benchmarks are guideposts that help the leader move along the path to this goal.
Our study isolates the technology variable to further expose the correlation between performance and the other two factors, over which the institution has complete control. Our study, therefore, used a large pool of data from a set of lenders all operating under the same business model and using the exact same technology. We believe there is no better apples-to-apples performance comparison available anywhere in the industry.
Given the commonalities of lenders in our study, one would expect every lender in the study to achieve a similar level of performance. While we might expect some slight variation between institutions, perhaps based on customer size or geographic location, we might expect overall performance to fall fairly close to a common baseline. Instead, we found that differences in the way these institutions organized their staff and their process workflows led to a wide variance in performance levels between institutions.
In fact, after performing the study for 6 years, we found that some lenders are surpassing their peers in high performance lending, even when competitors are operating under the same business model and using the same technology. We needed to find out why.
What benchmark data should my institution measure?
After analyzing the data, we found a number of metrics that were indicative of the performance of an institution, but five stood out as the best predictors of the institution’s ability to continue down the path of high performance lending. We now believe that these five key performance indicators are of critical importance to management and so for the last six years we have been collecting benchmarking data to help lenders understand how well they are performing relative to their peers.
In this section, we define each of these critical KPIs.
Stated simply, this is a measure of the time to close, from the moment the application is received until the loan is signed at the closing table. To be clear, this is not the only time that speed matters. Our Borrower Survey, for instance, revealed that the amount of time it takes for a loan officer to return a call to a prospective borrower who has not yet completed a loan application was a critical measure of the borrower’s willingness to follow through on the loan app. However, for this study, the amount of time the loan was “in process” was found to be a critical performance indicator.
As mentioned earlier, borrower share, or the ratio of applications taken to total customer base in the same calendar year, is an indication of how well the lender is doing serving the prospective borrowers who are already customers of the institution. This is a largely untapped resource for most lenders and holds the key to uncommon success in a highly competitive environment, such as these firms are lending in today.
This is the ratio of closed loans to applications taken and is a key driver of the institution’s profit. Lenders will tell you more than half of the total cost to close has been spent by the firm by the time the application is taken. That represents the money lenders must spend on advertising, marketing, public relations and sales staff to prospect, sell and close a full application for a new loan. If that loan is not closed, those funds are lost and the cost to close ratio increases for all other loans in the pipeline. On the other hand, the more loans the lender can pull through to close, the lower the cost to close and the higher the profitability.
Calculated simply, productivity is the measure of closed loans per mortgage production employee per month and it is the primary profit driver for every lending operation we studied. In fact, we now believe that productivity is the single most important metric in any mortgage lending operation and it is the primary driver of profit. Get this one right and cost to close falls in line and declines.
This was borne out in our discussions with lending executives, where we found productivity to be the KPI most indicative of profitability. If we know a lender’s productivity we have a very good idea of how profitable the institution is. According to our most recent study, the average productivity for lenders in our study in 2017 was 3.34 loans per employee.
Cost to Close
Cost to Close is the total cost of manufacturing a single mortgage loan. While the Mortgage Bankers Association put the total cost to originate for mortgage banks at nearly $8,000 per loan in 2017, our study revealed that our lenders, on average, experience a cost-to-close of $5,291 per loan in 2017. Better, but there is still a ways to go.
Arguably, these five metrics are macro-level measures that are really designed to offer two advantages to management. First, four of the five are quick and easy to calculate, offering a swift measure of the health of the institution. Some will argue, perhaps persuasively, that cost to close is more difficult to calculate. While true, if a good measure for the productivity KPI is available, cost to close becomes much easier to estimate accurately. We have the tools to do so. Once productivity is known, cost to close is easily and accurately estimated.
Second, the results institutions find by measuring these metrics will always lead to important questions, or at least they should. These KPIs are macro-diagnostic in nature, revealing areas where management must continue down the micro-diagnostic path to configure their companies for high performance lending.
What our 6th annual benchmarking study data told us was that a set of high performing lenders were consistently outperforming their competitors on every metric we tracked, despite competing for the same basic client base, offering the same basic loan products and using exactly the same technology.
Denver, CO; Jan. 24, 2017 − Citizens Community Federal Bank (CCFBank) announced its selection of Mortgage Cadence, an Accenture Company (NYSE: ACN), to streamline its loan origination processes, as well as drive borrower engagement. CCFBank will utilize the Loan Fulfillment Center, a robust loan origination system that offers end-to-end loan processing functionality, including compliance-related functionality and many third-party service providers.
CCFBank is a federally chartered national bank that provides deposit and loan products to communities in Wisconsin, Michigan, and Minnesota. After recently achieving the largest mortgage closing volumes in CCFBank's history, it was looking to capitalize on this growth with a new loan origination platform that enabled increased digital engagement with its customers.
The Loan Fulfillment Center’s accompanying product suite also solidified the bank’s decision to use Mortgage Cadence’s software and services. The Borrower Center, Document Center, and Imaging Center product add-ons, in addition to an available integration with DocuSign, differentiated Mortgage Cadence from the competition as a truly comprehensive product suite.
Nizar Hashlamon, EVP of Sales and Client Relations at Mortgage Cadence, said: “Mortgage Cadence is proud to be selected by CCFBank. With the Borrower Center for Loan Fulfillment Center, its customers will experience a swift and straightforward loan origination process, and the efficiencies don’t end there. Because Borrower Center for Loan Fulfillment Center is fully embedded, the single system of record helps the residential mortgage process continue seamlessly. As a valued community bank recognized for their leadership in the industry, we look forward to fostering another long-term relationship with CCFBank and are excited to contribute to the accelerated growth of the organization.”
About Mortgage Cadence
Mortgage Cadence, a wholly owned subsidiary of Accenture, has been working with lenders since 1999, offering mortgage technology solutions designed for point-of-sale through post-closing. In a time when efficiency, speed and the customer experience are paramount to the success of lenders, Mortgage Cadence offers reliable software and dedicated people, supporting lenders every step of the way. Visit www.mortgagecadence.com for more information.
CCFBank®, Citizens Community Federal, N.A. is a federally chartered national bank based in Altoona, Wisconsin. With over $550 million in assets, the bank is a full‐service financial institution providing deposit and loan products to our customers from multiple branch locations in Wisconsin, Minnesota, and Michigan.
DENVER, CO; January 10, 2017 – Mortgage Cadence, an Accenture Company (NYSE: ACN), signed Alaska USA Federal Credit Union (Alaska USA) to its Enterprise Lending Center mortgage origination product suite. This partnership strengthens Alaska USA’s commitment to providing its members with the best origination experience possible, backed by Mortgage Cadence’s comprehensive product suite.
With a regulatory environment that continues to challenge the industry, Alaska USA sought to acquire a rules-based loan origination system to drive compliance, efficiency, and accuracy. “Finding a loan origination provider that could meet the needs of both our members and our staff was paramount to our search,” said Debbie Ingle, Executive Director, Mortgage and Real Estate Lending for Alaska USA. “We were fortunate to find a true partnership with Mortgage Cadence. Its vision for next-generation, borrower-facing tools like responsive design and document upload solidified our confidence in its long-term position in the industry.”
Mortgage Cadence was able to meet Alaska USA’s needs by combining its flagship multi-channel, rules-driven loan origination solution, Enterprise Lending Center, with its entire complementary product suite, including:
- Borrower Center for ELC - A next-generation online origination portal available through the Mortgage Cadence Cloud, including a fully responsive superior user experience, a foundation for new borrower data aggregation offerings, and a modern application programming interface (API) surface for further extensibility. Borrower Center for ELC is scheduled to launch in spring 2017.
- Document Center - A proprietary automated and dynamic document preparation solution that integrates with DocuSign for eSignature and eClosing.
- Imaging Center - An electronic document imaging and management system.
- Software Development Kit - A robust, flexible tool, providing APIs and extensibility points within the Enterprise Lending Center.
- Business Intelligence - Data visualization dashboards within Enterprise Lending Center designed to optimize operations, boost throughput, and increase profitability.
Alaska USA selected Mortgage Cadence based on extensive discussions around the implementation methodology, the Mortgage Cadence Cloud, current and future vision for the digital borrower experience, and infrastructure as a whole. “Our technology is certainly integral to our clients’ success, but without the best team leading the charge and working hand-in-hand with our clients, none of it would be possible,” said Trevor Gauthier, President and Chief Operating Officer for Mortgage Cadence. “We pride ourselves in providing the best team in the industry dedicated to partnering with our clients to meet their changing needs in automation, borrower experience, and compliance. Our dedication to Alaska USA’s needs during its search, and now as we head into implementation, is no exception.”
About Mortgage Cadence
Mortgage Cadence, a wholly owned subsidiary of Accenture, has been working with lenders since 1999, offering mortgage technology solutions designed for point-of-sale through post-closing. In a time when efficiency, speed and the customer experience are paramount to the success of lenders, Mortgage Cadence offers reliable software and experienced people, supporting lenders every step of the way. Visit www.mortgagecadence.com for more information.
About Alaska USA Federal Credit Union
Alaska USA Federal Credit Union is a member-owned, not-for-profit financial cooperative with $6.8 billion in assets and more than 600,000 members worldwide. The credit union operates 85 branches in Alaska, Arizona, California, and Washington State. Alaska USA offers a 24/7 Member Service Center, access to more than 55,000 surcharge free ATMs worldwide, as well as online and mobile solutions. Learn more at alaskausa.org.
By: Jim Rosen, "Pixelation Nation: E-Closing in the Mortgage Industry," for Progress in Lending
Digital photography was invented 43 years ago. Today, we have grown so accustomed to taking photos with digital cameras – including our cell phones – that we no longer think twice about this technology. Sure, most of us grew up taking rolls of film to the store to be developed, but would you really trade the immediacy we have today for film? For most of us, the answer is “no way.”
The all-digital mortgage is similar to digital photography. It has gone from being a novel concept – something for lenders to strive for – to being something we hear about all the time. The need for all-digital-everything in mortgages has been driven by a number of considerations, including consumer demand for more timely and efficient interactions, complex compliance requirements, and a need to expedite lending activities. Non-bank lenders add to this mix with non-traditional lending practices and different risk profiles, creating a hyper-competitive lending environment.
In light of all of these factors, tack-on solutions or limited technology that only supports digital disclosures is just no longer going to cut it. As we adapt to the needs of today’s borrowers, we believe that embracing the all-digital mortgage experience is the best option for lenders to ensure that they have a lending platform that will support their future activities. Just as camera film has become all but obsolete, so too will be paper-based mortgage processes. Here’s how you can ensure you are at the forefront of this part of our digital revolution.
As mentioned, digital disclosures have long been an accepted first step in the digital revolution. Electronic signatures on early and upfront disclosures carried low risk and were simply implemented, and the options and flavors of eSign are numerous. However, lenders are realizing – and consumers are demanding – that you can’t just offer digital disclosures and then revert to paper for closing to realize the benefits of the digital mortgage.
There are two reasons for this. First, because of increased regulations that require compliance checks and procedural validations, lenders today automatically face higher costs per loan. And while increased costs can be mitigated with procedure redesign and staff training, lenders can only retrain so much without having to rely on technology to go further. Second, many of today’s mortgage borrowers seek automated, efficient financial solutions that they can control at the time and place of their choosing. While digitizing disclosures is a great start, today’s borrowers demand more and will go where they can find that all-digital experience.
That brings us to eClosing. The digital camera revolution took nearly fifteen years after its invention before consumers had a viable product they could buy. Similarly, the industry “standard” over the past decade for eClosing required lenders and platforms to dig deep. Their options included:
- Investing in product or platform development or in a deep technology integration that had little to no general application to the process
- Engaging in relationship-building and process validation with MERS and with Fannie Mae
- Building, buying, or partnering with a solution that generates a complex technical version of the note, and acquiring an electronic vault in which to keep the records.
In the cold calculus of cost/benefit, lenders often could not make the conversion-to-payoff based on the large investment required. Costs to implement and maintain could not justify the potential or perceived benefits in consumer efficiency and/or backend reductions in cost, time, or processes. Faced with these tack-on approaches, many lenders waited for better options to come along.
Fortunately, just as digital cameras now are ubiquitous, all-encompassing digital mortgage solutions have proliferated, as well. Digital experts in the financial services industry have begun banding together to create fully-integrated solutions for lenders of all sizes. Lenders can now adopt the complex underlying technology for eNotes without the heavy investment in research, development, or infrastructure. With the availability of these solutions, consumers will begin demanding all-digital mortgages exclusively. Paper-based mortgage processes, while already on the way out, will hopefully become completely obsolete.
That brings us to the key question for lenders: Where are you on your digital mortgage journey? The movers and shakers in the industry are already providing borrowers with an all-digital mortgage origination experience. Taking the next step today can help meet borrower demand tomorrow.
eNotary Expansion to Evolve eMortgage Market, Seeking Approval as Official Fannie Mae Technology Service Provider
BOSTON; October 25, 2016 – At the annual Mortgage Bankers Association (MBA) conference and expo here today, DocuSign – the global eSignature and Digital Transaction Management (DTM) leader – announced a series of expanded features that will allow lenders and title companies to complete a mortgage 100% digitally.
Known as eMortgage, the new service will empower lenders and their clients to electronically-sign the mortgage paperwork associated with the more than 12 million real estate documents and 2.5 million real estate transactions already DocuSigned every year.
The news marks an expansion of DocuSign’s ‘lead to close’ strategy for the real estate industry, first announced by the company’s Chairman and CEO Keith Krach in July this year. The strategy entailed DocuSign making its biggest investment in the real estate industry to date.
“DocuSign’s vision is to make the home buying process fully digital, from lead to close. DocuSign has transformed several aspects of home buying, but enabling a seamless, digital mortgage remained a paper-burdened experience for home buyers and sellers. Today’s expanded investments in eNotary demonstrate our commitment to making a completely paperless eMortgage reality,” explained Georg Gerstenfeld, general manager: Global Real Estate Solutions, DocuSign.
“This is against the backdrop of the real estate industry's widespread adoption of DocuSign, and is helping to add more than 130,000 new users to the DocuSign Global Trust Network every day. eMortgage is a natural next step to simplifying the end-to-end experience.”
Today’s announcement centers around two key areas:
• eNotary – this enhancement ensures that in-person eNotarizations can now be performed via DocuSign in Florida and Washington (in addition to North Carolina, which has been available since 2014). It is also expected that more than ten other states could be added before the end of the year. With eNotary, there is no need to print, scan or mail closing documents – all actions can be performed within the DocuSign platform, including applying a seal and exporting a notary log.
• Fannie Mae – reflecting the potential for the DocuSign platform to help speed the adoption of the broader eMortgage process, the company (with eOriginal as a partner) is seeking certification as an official Fannie Mae eMortgage Technology Service Provider – a certification that only a handful of technology organizations have been granted by the mortgage lender. Certification is expected by the end of year.
Several of DocuSign’s partners and customers have thrown their weight behind today’s announcement – including Fannie Mae and Accenture Mortgage Cadence.
“Fannie Mae is pleased that DocuSign is undergoing technical compliance testing with us for delivery of eMortgage loans, and is seeking approval to join our eMortgage Technology Service Provider listing,” said Cindy McKissock, Vice President of Customer Digital Experience, Fannie Mae. “Supporting our customers’ transition to digital closings is a priority for us – and we expect DocuSign’s platform to help remove barriers and obstacles to the adoption of eNotes, thereby increasing usage across the industry.”
For its part, Mortgage Cadence, an Accenture Company – an existing DocuSign partner – is excited about this focus on eMortgages.
“Mortgage Cadence is committed to making digital mortgages a reality. Combined with DocuSign’s digital mortgage strategy, these additional enhancements align well with our own vision to provide the last lending solution our customers will ever need,” said Jim Rosen, Document Center Product Manager at Mortgage Cadence.
“Today, lenders and title companies tend to rely on paper or hybrid processes to complete loans,” explained DocuSign’s Chief Product Officer, Ron Hirson. “We are supporting our Real Estate customers for today’s launch by delivering new eNotary and eNote features to our DTM platform – that helps more organizations move to a paperless process that is fully auditable, less prone to errors, and results in faster closings.”
The enhanced features are being shown this week at the MBA conference and expo are slated to come to market towards the end of the year. For more information, visit www.docusign.com.
About DocuSign, Inc.
DocuSign® is changing how business gets done by empowering anyone to send, sign and manage agreements anytime, anywhere, on any device with trust and confidence. DocuSign and Go to keep life and business moving forward. For more information, visit https://www.docusign.com/, call +1-877-720-2040, or follow us on Twitter, LinkedIn and Facebook.
Copyright 2003-2016. DocuSign, Inc. is the owner of DOCUSIGN® and all of its other marks (www.docusign.com/IP). All other marks appearing herein are the property of their respective owners.
By: Jacob Petersen for Tomorrow's Mortgage Executive, talking on the importance of customer service in the mortgage industry.
How often does a piece of technology break only to realize you now have to make the dreaded phone call to the 1-800 support number on the back of the device? For most, this is met with a monotone voice reading an infuriating script. Do they think we didn’t try to restart the device? Of course we did. Yes, the router was unplugged and reset, too. In today’s world, consumers expect a higher level of customer service. Whether they need to set up a new account, need help understanding the paperwork in front of them, or need help troubleshooting an issue, support must be seen as a trusted advisor.
As organizations grow, the idea of a customer ecosystem is essential to ensure the longevity and scalability of the company. This customer ecosystem requires that the entire organization work closely to provide only the highest levels of support. What steps are you taking to ensure your customer-facing teams emerge on top of today’s demanding industry landscape?
By: Dan Green, "Seeds of Digital Change in the Real Estate Market," for Progress in Lending
Remember the days when stacks of paper, numerous phone calls, and “snail mail” made up the heart of the mortgage process? Yes, we are referring to those days in the not-so-distant past before the technology revolution made the all-digital mortgage a possibility. As we’ve seen, this technology revolution took the mortgage industry by storm, drastically improving day-to-day operations and increasing efficiency. A similar technological future awaits the home seeking process. As this future reveals itself, it is in our best interest as lenders to remain up to date with these changes to foster collaboration with real estate agents. Advanced planning and networking now will lead to a natural pipeline of referrals, allowing our future origination business to grow in unprecedented ways.
The initial stages of searching for a home have become almost exclusively digital, activating yet another technological revolution. Logically, the initial home buying effort begins with a simple online search to gauge market availability and pricing while also honing in on certain types of homes or neighborhoods. According to a recent report, about 90% of prospective home buyers use some type of online search in their home buying process. As millennials continue to make up more and more of the first time home buying population, the use of internet throughout the process will only increase.
As a result of this increase, home buying technology must continue to improve as well. Outside of current online listings and search functionality, there is limited digital capability to make an offer on – and ultimately purchase – a home online. Fortunately, seeds of change are already being planted through a few digital real estate companies that offer the capability to search, list, sell, and buy properties completely online. Similar to the all-digital mortgage where lenders and borrowers are notified of status updates through loan origination software, so too will home buyers and sellers make and receive offers and updates simultaneously. At first glance, it may seem like these digital changes eliminate the need for real estate agents altogether. Quite the contrary. Traditionally, the agent has handled the networking, contracts, and negotiation that are involved in the home buying process. Although many of these components will likely be handled digitally in the future, it is in the best interest of lenders, and borrowers, to continue partnering with real estate agents for a couple of reasons.
Networking Requires People. First, very few, if any, prospective home buyers want to buy a house sight unseen, so the agent becomes an important local resource in setting up showings. In addition to traditional showings, agents may also have the networking connections to point interested buyers in the direction of properties that would otherwise not be considered. Next, community appeal is a vital factor. Conversations with real estate agents can shed light on the unique local flair of an area, and help match the desires of the borrower with a fitting community. Realtors® may also use their local connections to recommend good inspectors, contractors, and other key individuals involved in the purchase of a home.
Digital Savviness Isn’t for Everyone. Additionally, depending on how comfortable the buyer/seller are with the online tools, the agent may be called upon to use their knowledge and expertise to perform the online negotiations and contractual components on their client’s behalf. Ultimately, this makes the process easier for both buyers and sellers, as well as ensures compliance from a legal standpoint. Thus, just as the role of the loan officer progressed with the all-digital mortgage, so too will the role of the real estate agent transform according to shifting digital demands. The future belongs to agents who are willing to adapt to these demands and take on more of a specialized, hybrid role within the industry.
What does all of this mean for lenders? Having a strong network of real estate agents will always be a sure way to increase origination business. Despite changes in the home buying process, agents will still spend more time with the home buyer than any other party. If you have the trust of the real estate agent, you’re more likely to win the trust (and business) of the home buyer.
As the real estate market begins to perfect and streamline this new process of buying a home, the logical next step is to integrate the mortgage process with the digital purchase of the home. Think of the visibility and brand awareness that would come along with having your institution’s loan products displayed alongside a listing of the buyers’ dream home. Whether this be in the form of a partnership or direct integration with the real estate websites, there’s no doubt it would be advantageous to all parties involved. No matter what changes are thrown our way within the housing industry, there’s no doubt proper preparation and innovation are key to remaining ahead of the digital curve.