Today, we're proud to reveal that Brian D. Pannell, our Chief eServices Executive, has been honored with a prestigious Vanguard Award by HousingWire. This recognition, now in its ninth year, celebrates visionary leaders in the housing and mortgage finance industry, acknowledging their exceptional contributions and forward-thinking initiatives. Pannell's remarkable achievements in advancing eNote adoption among lenders have not only earned him this distinguished award but also propelled DocMagic to new heights.

A Trailblazing Technologist

Upon receiving the Vanguard Award, Pannell expressed his honor and commitment to DocMagic's role as a leader in innovative eMortgage technologies. He emphasized the company's dedication to advancing fully automated originations alongside paperless eClosings, thereby propelling the mortgage industry into the digital age.

“I am truly honored to receive HousingWire’s Vanguard award,” said Pannell. “The entire team at DocMagic is focused on maintaining our role as a leader in innovative eMortgage technologies. I am excited to be a part of this major movement and help DocMagic lead the charge for years to come.”

Pannell has long been a driving force behind eClosing adoption within the mortgage industry. His unwavering dedication and hands-on approach have led to increased efficiency for DocMagic's lender clients—one notable project spearheaded by Pannell resulted in a significant surge in eNote adoption among federal banks, investors, and lenders.

In fact, thanks to Pannell's tireless efforts, DocMagic has achieved a nearly 40% increase in eNote adoption among its banking clients in the last year alone.

This achievement aligns seamlessly with our overarching mission: to eliminate paper from the mortgage process and digitize workflows, from origination to closing. Considering Pannell's focus on the efficiencies of eNotes for eClosing, below, we'll focus on eNotes themselves and just why they've been such a focus for clients in the past year.

The Power of eNotes

Traditional paper notes are slow, costly, and vulnerable. Typically stored in fortified vaults to withstand disasters, paper notes require costly retrofits, such as fireproof walls and waterless sprinkler systems. One critical weakness of paper notes is that there's only one original copy, with no backup concept. Losing the original note renders any copies worthless, akin to a lost endorsed check.

Also, each time a paper note is shipped, the risk of loss or damage multiplies significantly. It passes through several physical handovers, from the warehouse lender to the investor and finally to the custodian. With each shipment, the expense and risk increase substantially.

In contrast, eNotes eliminate these risks. They cannot be lost because there's no single original record to misplace. Additionally, eNotes can be securely backed up, virtually eliminating the risk of loss.

Instead of worrying about holding the original note, in an eMortgage workflow, the concept of an authoritative copy is introduced. While multiple copies of an eNote can exist simultaneously, only one is designated as the authoritative copy, akin to the original paper promissory note. The MERS® eRegistry system, in conjunction with eVault technologies, determines the authoritative copy of the eNote. Specifically, the copy of the eNote stored within the MERS®-designated "Location" Rights Holder's eVault is considered the authoritative copy, ensuring the security and integrity of the digital document.

These security and efficiency reasons—alongside many more—are why Pannell has guided his clients to further eNote adoption, leading to this prestigious award and recognition from HousingWire.

Celebrating Innovative eMortgage Solutions

Pannell's impressive credentials and extensive experience underscore his ability to forge critical technology and business relationships within the industry, leading clients to the perfect eMortgage solutions. DocMagic's industry-leading solutions include a variety of digital lending products, from ClickSign®, eNotary services, and eClosing to eNote generation and secure eVaults, such as SmartSAFE®. 

HousingWire's annual Vanguard awards recognize leaders across various sectors of the housing economy, including residential mortgage lending, servicing, real estate, and fintech. The 2023 Vanguard winners, including Pannell, will be honored at a ceremony during this year's HW Annual Conference in Dallas, Texas in mid-October. Their achievements will also be featured in the October/November issue of HousingWire and will continue to receive recognition on HousingWire.com.

Pannell's recognition with the Vanguard Award serves as a testament to his outstanding leadership and contribution to the mortgage industry's digital transformation. Under his guidance, DocMagic continues to lead the charge in innovative eMortgage technologies, shaping the future of mortgage origination and closing processes.

Related Content:

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• Ask the eClosing Team: Unlocking the potential of hybrid eClosings (9/21/2023)
  
• 100% Digital, 100% Delight: eClosing means great customer experiences (9/07/2023)

This post is adapted from a detailed update on the new SB 696 bill in our Compliance Edge publication authored by Gavin T. Ales, Chief Compliance Officer at DocMagic.

On Saturday, September 30th, the California governor signed a bill into law, SB 696, that paves the way for legalization of remote online notarizations (RON) by California notaries. The groundbreaking piece of legislation has stipulations to review the technological requirements for RON, study laws of other states governing remote notarization, and determine appropriate regulations and rules necessary to enable the conduct of remote notarizations.

However, what sets this legislation apart is its forward-looking approach, with its full scope perhaps not becoming effective until years after its passage.

• Ask the eClosing Team: Unlocking the potential of hybrid eClosings (9/21/2023)

• 100% Digital, 100% Delight: eClosing means great customer experiences (9/07/2023)
  
• Compliant IRS transcript requests: Adapting to changes in form 4506-C (8/17/2023)

When a lender comes to us requesting a digital mortgage closing transformation, we often recommend a “crawl, walk, run” strategy: in other words, we encourage them to transition through various stages of hybrid electronic closings (eClosings) before going 100% digital.

This phased approach is often helpful for newly digital lenders, but we still have clients who approach us with a desire to go full eClosing from the start.

Our eClosing Team expert, Leah Sommerville, firmly advocates for a phased approach to implementing eClosing for all lenders—particularly the adoption of hybrid eClosings with an experienced vendor. In this interview, Sommerville shares the reasons why lenders should consider the phased approach, and we delve into various forms of hybrid eClosings and provide insights into measuring your ROI as you implement hybrids.

Q: First things first. Would you still recommend a phased eClosing approach for lenders, and why?

A: I wholeheartedly endorse the phased approach for all lenders. Waiting indefinitely for the perfect moment when every aspect of lending can be electronic is, unfortunately, a flawed strategy. The reality is that not every loan can be purely electronic due to some lingering investor restrictions, geographical limitations, and other constraints.

However, a hybrid eClosing allows lenders to enjoy digital benefits now. They can see the increased efficiency, the quicker closings, and the increased cost savings. Borrowers today also expect a digital experience, from online applications to e-signing initial disclosures, and lenders should strive to align with these expectations.

Q: Why should lenders consider hybrid eClosing before going to 100% eClosing?

A: There are several compelling reasons why the phased approach, starting with hybrid eClosings, is a good choice.

1. Empowering borrower document review: Hybrid eClosings allow borrowers to review documents ahead of the closing day, aligning with their digital journey and giving them more confidence in the process.
2. Facilitating internal team familiarity: Implementing eClosings all at once can overwhelm internal teams within lending institutions. A phased approach eases the transition and allows teams to adapt gradually.
3. Navigating compliance and MERS® membership: Setting up MERS® membership, a prerequisite for eNotes, can take 3-6 months. During this period, lenders can become accustomed to the digital workflow if they’re already using the first category of hybrid eClosing (see below).
4. DocMagic's eDecision tool for compliance: If they’re using DocMagic to generate digital documents, lenders can start using our eDecision audit, described in our Loan Detail Report, to assess where notarization can be applied in advance of actually deploying an eNotarization solution. This ensures compliance and streamlines the evolution toward a complete eClosing workflow once they scale up.
5. Meeting borrower expectations: Modern borrowers conduct most of their mortgage-related activities online. Providing a digital experience up to the closing stage is essential.

Q: What types of hybrid eClosings does DocMagic provide, and what do those categories involve?

A: DocMagic offers a spectrum of hybrid eClosing options tailored to diverse lender needs:

With the first category of hybrid eClosing, eSigning (with DocMagic, that’s covered by our ClickSign® tool) is the focus. Borrowers can preview the closing package as soon as it’s generated, with about 90% of the package available for electronic signing. Notarization and wet signatures are still required for the promissory note and select documents, but they usually only amount to 3-4 pages as opposed to dozens.

Building on the first level, the second category of hybrid incorporates electronic notes (eNotes) stored in an eVault, facilitating quicker funding and seamless transfer to investors or warehouse lenders through integration with MERS®.

In the last category of hybrid, ancillary documents can be eSigned but eNotarization is also possible, reducing the need for wet signatures. Typically, only the promissory note requires wet signing in this type of hybrid. Also—and this is not always done, but it’s still possible—since the note doesn’t require notarization, the borrower could even print out the note at home, sign it, and re-upload it into the lender’s eClosing portal, facilitating an even faster certification process.

Each of these hybrid eClosing options offers varying degrees of efficiency and digitization, helping lenders transition gradually to a more advanced eClosing workflow.

Q: What are some key indicators that lenders can use to measure the ROI they want from hybrid eClosings?

A: Lenders can gauge the ROI of their hybrid e-closings by considering several metrics.

First, if eNotes are part of the hybrid workflow, measuring how quickly they are funded can show lenders just how significantly an eNote impacts efficiency and cost savings.

Evaluating the time borrowers spend at the closing table is also crucial. Hybrid eClosings often lead to much shorter sessions at the closing table, indicating a smoother process even without a 100% digital workflow.

Another strong ROI indicator is a decrease in undersigning errors, oversigning errors, and missed documents when lenders receive documents from the settlement agent. Less human error translates to cost savings and quicker closings overall.

Lastly, assessing borrower satisfaction with the hybrid eClosing experience is vital. Satisfied borrowers are more likely to recommend the lender's services and spread the word about quick, convenient closings.

Q: What recommendations do you have for lenders who still want to implement 100% digital eClosing from the start?

A: Definitely appoint a strong project stakeholder. A dedicated and experienced project stakeholder will lead the transition to full eClosing from planning to implementation. This individual should be the driving force behind the project, ensuring it reaches successful completion.

Also, be mindful and recognize that some benefits of eClosings may not be fully realized until reaching the 100% eClosing stage—therefore, know that lenders starting with hybrid may gain these benefits right away, while lenders going 100% digital may have to wait for MERS® approval or other independent organizations.

In the end, Sommerville emphasized that staying on track and avoiding delays is essential. It’s better to progress and adapt than to wait indefinitely and potentially fall off track—so whether you choose a phased approach with hybrid eClosings, or whether you pursue 100% digital from the start, getting started is the most important action to take.

• 100% Digital, 100% Delight: eClosing means great customer experiences (9/07/2023)

• Compliant IRS transcript requests: Adapting to changes in form 4506-C (8/17/2023)
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In the rapidly evolving landscape of modern lending, the integration of cutting-edge technology with exceptional customer service has emerged as a paramount strategy for success.

This was the core theme of our recent webinar—“100% Digital, 100% Delight: Prioritizing Customers in the Digital Age.” Hosted by industry experts, the event shed light on the transformative power of eClosing and its impact on the lending experience.

Missed our eClosing webinar? Here's the full recording.

In case you didn’t catch this conversation between Leah Sommerville (Enterprise Solutions Manager at DocMagic), Kurt Neeper (President of Superior Financial Solutions), and Megan Schroeder (Director of Mortgage Loan Operations at Superior), read on for a recap of the takeaways.

Delight In Digital: A Paradigm Shift For eClosing Support

Sommerville, the host of the webinar, opened by emphasizing the significance of blending technology and customer-centric approaches. The objective: providing customers with a seamless and efficient mortgage experience.

With customers expecting nothing less than streamlined processes, digital tools like eClosings have come to the forefront—with the added need for providing considerate eClosing support to all, especially new buyers.

The Pioneering Superior Credit Union

Neeper delved into Superior Credit Union’s history, highlighting their legacy of “firsts.” From starting community charters to owning a title company and real estate brokerage, Superior has consistently been an innovator. Their focus on being the first choice for various financial needs propelled them to set the bar high: they would achieve 100% paperless eClosings, and they would do it from the start.

Although hybrid eClosings and full eClosings are two choices among many lenders can make to fit their needs, Superior Credit Union fully embraced the concept of digital, said Neeper. This decision proved immensely effective in not only speeding up the closing process but also optimizing operational efficiency.

Paving The Way For Better Customer Service

Schroeder also described how Superior approached internal challenges to introducing eClosings. Resistance to change was expected, but as the process became normalized, loan officers and title agents with the organization quickly embraced the experience of using DocMagic’s end-to-end eClosing platform—Total eClose™. The convenience of eClosings was particularly evident in remote online notarization (RON) closings, which enable all parties to attend closings virtually.

Faster, Smoother, And More Convenient eClosings

Electronic closings provided Superior customers and partners with newfound convenience, said Schroeder. Both experts noted that eClosings contributed to several ongoing benefits at Superior:

• Customers can choose to close remotely from their preferred location or opt for an in-person experience, using iPads provided by Superior for a digital workflow either way. The process, regardless of the customer's choice, is significantly streamlined, often reducing the closing time by up to 66%.
• eClosings empower customers by giving them the option to review documents in advance. The customers receive a link to the documents, allowing them to familiarize themselves with the details before the closing day.
• eClosings have often prevented closing delays, with customers being able to participate remotely in unexpected situations, ensuring smoother transactions.
• eClosings have boosted operational efficiency, enabling loan officers to attend more closings from their desks and enhancing their availability.
• Real estate agents and referral partners have responded enthusiastically since they can now attend multiple closings simultaneously without logistical constraints. This real-time engagement with clients has strengthened relationships and solidified partnerships.

Championing eClosing For Faster, More Efficient Mortgage Lending

The webinar concluded with both experts emphasizing the significance of champions within organizations—individuals who spearhead the eClosing adoption process.

The mortgage industry’s transformation through eClosings is a testament to the power of embracing technology. The journey to fully digitized mortgage closings pays off in increased efficiency, cost savings and enhanced customer relationships.

As the mortgage landscape continues to evolve, eClosings will remain a cornerstone of innovation and progress. For more information, watch the full webinar recording here. 

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• MPA honors Leah Sommerville of DocMagic with 2023 Elite Women Award (7/20/2023)

The Internal Revenue Service (IRS) has recently implemented significant changes to the process of ordering tax transcripts and records, encouraging lenders to move from a manual ordering process to submissions that are Optical Character Recognition (OCR) compliant. As part of this modernization, the IRS has also introduced clean form requirements for the IRS Form 4506-C.

While this transition is expected to enhance efficiency, it’s essential for lenders to adapt their internal procedures for accurately collecting information on this form to prevent a) avoidable errors, b) subsequent rejection of transcript orders, and c) duplicate orders. Lenders must adapt their approach so that they remain in compliance as they submit IRS transcript requests and work alongside borrowers to ensure accurate tax return transcript information.

Top 4 Mistakes On IRS Transcript Request Forms

To ensure a smooth process and avoid rejection using the changed 4506-C, lenders must avoid the following prevalent errors when submitting this important request for an IRS transcript.

Below are some of the most common mistakes that cause form rejection.

1. Not using the updated form

The IRS updated their previous transcript form, the 4506-T, to the 4506-C at the end of 2022. Lenders are now required to use this new form, so ensure all agents have access to the October 2022 version of the form and use it exclusively for requests.

Vendors like DocMagic take care of this issue for you. We ensure you receive the right version of the necessary form based on updates from the IRS, making sure to follow updates as they occur and react accordingly.

2. Making simple errors

Unfortunately, small mistakes in filling out the form itself can result in rejection of your IRS transcript request. Among others, we’ve seen sections 5a and 5d missed or filled out incorrectly; various checkboxes left unchecked; and strikethroughs, circles and arrows used when they’re not allowed anywhere on the form (even if the borrower initials them to approve their use).

3. Using the incorrect address

It’s vital to double-check the borrower’s current address(es)—or, more accurately, their addresses listed in the loan file—in order to avoid rejection of your 4506-C. Check your records to ensure the addresses listed in the loan match this form perfectly.

4. Missing signatory checks or filling them out incorrectly

Last, always make sure the attestation box is checked when filling out this form. In addition, you must check the box that says “Signatory confirms document was electronically signed” if the form was electronically signed at any point.

Why The IRS Transcript Form 4506-C Is Important

It’s usually mandatory for lenders to have each borrower complete and sign a separate IRS Form 4506-C at or before closing, assuming their income is used to qualify for the loan (regardless of the income source). The only exception is when the borrower’s income has been validated by the Automated Underwriting System (AUS).

Both Fannie Mae and Freddie Mac require lenders to submit the IRS Form 4506-C for all loans reviewed under their post-closing quality control plan, except when transcripts are obtained during underwriting or when the borrower's income is validated by the AUS. Lenders should also be aware of the need for reverification of the borrower’s income and employment information.

Lenders should review and update their processes to incorporate thorough checks for errors on the IRS transcript Form 4506-C as part of their approval process. Staying vigilant and adhering to the revised requirements will help prevent transcript order rejections and ensure a compliant lending process.

To get more updates, contact us about our advanced compliance newsletter—the Compliance Edge.

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