The new mortgage wave is now.
Executive Conversations is a HousingWire web series that profiles powerful people in the financial industry, highlighting the operations and the people that make this sector tick. In the latest installment, we sit down with Don Iannitti, president and CEO of DocMagic, to see how the company how the company thrived in 2014, along with its plans to grow in 2015.
HW: DocMagic has announced some key acquisitions in 2014, how are these coming along and where does the company plan to grow in 2015?
Iannitti: We made two outstanding acquisitions in 2014 that will have a significant impact on our business moving forward: eSignSystems and Doc-Tech Corp. Both were executed flawlessly and are integrating exceptionally well with the existing DocMagic family. While both acquisitions bring layers of new benefits and opportunities to DocMagic from an asset, customer and opportunity standpoint, I think that the best part of each of those deals is the incredibly talented people that we were able to bring on board. They have already added tremendous value to DocMagic and are both perfect fits within our corporate culture and level of commitment and intensity our organization has.
We also recently secured an exclusive agreement with a complementary technology vendor that we will be announcing shortly, which puts us in a unique position to achieve a 100% paperless eClosing. In addition, we will be evaluating other deals of interest throughout 2015 that add to our competitive advantage. With many of the new and constantly changing compliance rules that are being enacted, we see huge opportunity for us to serve as a single-source vendor for fully compliant, highly efficient eMortgage processing from end-to-end.
HW: The new Integrated Disclosures rule will be implemented on Aug. 1, 2015. Many say this is bigger than the QM/ATR rule that was mandated in 2014. Are lenders and vendors alike ready for it?
HW: The CFPB will again be front and center with compliance throughout 2015 that will impact the entire mortgage supply chain. Are you working with them on compliance initiatives to help?
Iannitti: Part of the CFPB’s “Know Before You Owe” mortgage initiative, which is designed to improve the home-buying experience for consumers is its eClosing pilot program. It analyzes how technology can improve the borrower experience.
DocMagic is one of the lead vendors participating in the CFPB’s eClosing Pilot, which is in direct response to providing an automated solution to the new Integrated Disclosure, (TRID) regulation for August 1st. Much of that encompasses providing a consistent electronic process and streamlined consumer experience to ensure borrowers are better informed and educated before they go to closing and on the lender side to ensure the lender has an electronic documented process (audit trail) to ensure proof of compliance around delivering the disclosures to consumers.
Although the pilot itself is currently only focused on the delivery of the “Closing Disclosure Form,” the lenders we are working with already provide an initial electronic disclosure, (eDisclosure) with much of the verification being paperless up to providing an electronic pre-closing and full eClosing process that includes eNotary, eRecording and eDelivery to the investor via MERS eRegistry.
In short, we’ve already satisfied the pilot’s initial objective and have actually taken it much further, achieving a full eClosing from soup-to-nuts using DocMagic’s single solution.
HW: There has been a lot of talk about achieving a true eMortgage. How close do you think we are?
Iannitti: There are many different components that all need to work very well together in order to achieve an actual eMortgage from start to finish --- completely electronically and without the use of any paper whatsoever. The industry has made significant advancements with eMortgages over the years from e-documents to e-signatures, e-notaries, e-delivery, e-closing, e-recording and e-vaulting. What we’re finding, however, is that there are currently too many vendors involved to make it work smoothly. This is why we are evolving into a single-source provider of comprehve eServices. At DocMagic, we have the technology and are eMortgage ready; but, the next challenge is in getting major investors and other industry players to embrace and accept it. So, when will broad-based market adoption occur is the billion dollar question.
What we have seen in recent years is a confluence of eEnabling events that have risen out of a combination of 1) technology adoption, 2) government mandates and 3) the proliferation of data-centric models that we believe creates a paradigm of “eInevitablity” that will begin to show real leaps in market adoption in early 2016. The environment has become an environment where the only way to be compliant and competitive is to eliminate the paper. Many of our customers see this already, and are working with us to set up an eEnvironment.
HW: What are some of the biggest challenges that lie ahead in 2015 and how do you plan on overcoming them?
Iannitti: Had you asked me this question last year, I would have said our biggest challenge was going to be driving eAdoption, but I am pleased to say that certain marketplace drivers ended up getting that well underway.
Currently, our biggest opportunity is going to be ‘riding’ the eWave. This means that we will be material in transitioning increasingly greater numbers of our customers to an eEnvironment that is highly regulated and highly competitive. Customers are unique and one size doesn’t fit all. It will be a time of great learning for everyone in this market --- everyone. Maintaining balance while assimilating the knowledge we gain and continuing to innovate amid an incredibly fast-moving regulatory intensive business landscape is our opportunity, and we are very well-positioned to capitalize on it. We’ve been around for 25 years and have successfully navigated through many industry cycles, always coming out on top.
Compliance rules abound; they here to stay. We’re ultra-prepared to tackle them and serve as a very effective electronic single-source solution to clients. We’re quickly transforming from once being a document preparation company into an eServices company.