Stewart Title and Mountain America Credit Union recently completed the industry's first-ever e-closing of a Federal Housing Administration (FHA) loan.
The e-closing was reportedly facilitated by Stewart's eClosingRoom, which is powered by DocMagic's e-doc and e-sign technology.
The FHA recently announced that it is now accepting e-signatures on all loan documents with the exception of the note. The agency is expected to begin accepting electronically signed notes by the end of the year.
In a release, Tim Anderson, director of e-services for DocMagic and a member of the Mortgage Industry Standards Maintenance Organization (MISMO), explains that "e-sign has never just been about the upfront disclosures," as e-sign technology is also a critical component of the e-closing, where multiple documents are signed by a borrower.
"Our ability to use this technology to help lenders realize a fully paperless mortgage is the real story here," Anderson says. "There really is no excuse now not to provide this service to borrowers, who have been demanding it for some time."
Anderson adds that better compliance risk management is an additional benefit of paperless lending.
"The ability to provide electronic proof as evidence of compliance will be critical for lenders in the future,” he says. “When documents remain electronic, it’s easier to create and maintain an audit trail that can support the lender during a bank audit."
"Being the first lender in the country to conduct a live e-closing of an FHA loan and doing it with Stewart’s eClosingRoom platform powered by SureClose and DocMagic’s eSign enabled compliant loan documents is truly an exciting event for us," says Amy Moser, vice president and mortgage services manager for Utah-based Mountain America Credit Union.
Nancy Pratt, director of e-strategy for PropertyInfo, the technology division for Stewart Title, adds, "Our eClosingRoom platform enables lenders like Mountain America and title agencies not only to e-sign, but also to e-notarize and e-record the closing package in the title office, delivering a fully paperless e-closing experience for all participants. Stewart had its first electronic closing in May of 2005. Having the first FHA loan electronically closed in our system truly is a milestone for the mortgage industry."