Integration reduces time from initiating a loan application to receiving disclosures from days or weeks to just minutes

TORRANCE, Calif., May 9, 2017 (SEND2PRESS NEWSWIRE) — DocMagic, Inc., the mortgage industry’s leading provider of document production, automated compliance and comprehensive eMortgage services, announced that it completed an integration with BeSmartee, a leader in mortgage automation technology.
This integration creates a seamless connection between the two technologies, which fulfill the first two major events in the eMortgage process: online borrower application and electronic delivery of disclosures. Via this integration, DocMagic and BeSmartee are enabling borrowers to complete a loan application and receive disclosures in a matter of minutes, rather than the days or weeks that is typical with manual processes. Once the application is complete, disclosures are automatically created and presented to the borrower for electronic signature, with no additional effort by the lender.

“eMortgages offer better speeds, security, quality and accuracy, which translate to a better borrower experience and more efficient, economical operations for the lender,” said Dominic Iannitti, president and CEO of DocMagic. “This integration further escalates those benefits by allowing two great technologies to operate at their peak collaborative performance.”

BeSmartee connects borrowers and lenders directly with providers that instantly validates the borrower’s income, asset and credit information, such as the IRS, financial institutions, and credit bureaus. The technology’s auto-population feature helps borrowers complete the application in a fraction of the time, while its validation feature provides lenders with vetted information for a faster underwriting process.

DocMagic technology saves time by generating a fully-compliant electronic disclosure package based on the borrower’s information in a matter of minutes, rather than the days it takes with even the fastest manual processes. That package is then instantly presented to the borrower, who can review and execute the documents on-screen, once again reducing a traditionally days-long process to minutes.

“A true eMortgage uses no paper at all. It’s a start-to-finish electronic process that requires collaboration among certain technology providers,” said Iannitti. “DocMagic is proud to be the solution that connects not only those technologies, but also all of the entities that use them, to enable a truly electronic process. It’s great to partner with progressive companies like BeSmartee who are helping to make eMortgages possible.”

“The BeSmartee/DocMagic integration avails a level of speed that the industry hasn’t experienced before but that, as more lenders discover its impact on sales and operations, more borrowers will come to expect,” states Tim Nguyen, co-founder and CEO of BeSmartee. “Together, we’re delivering the type of speed and service that Millennials have come to expect, which is key to securing new business from this coveted group of borrowers.”

Press Release:
DocMagic, BeSmartee and LendingQB Host Webinar on Digital Lending To Improve Loan Process

Costa Mesa, CA, April 24, 2017 – DocMagic, the mortgage industry’s leading provider of document preparation, automated compliance and comprehensive eMortgage services, BeSmartee, a leading online mortgage automation company and LendingQB, a provider of lean lending loan origination technology solutions, will hold a webinar discussing the opportunities and challenges of the “Digital Lending” paradigm on April 26, 2017 from 10 a.m. to 11 a.m. PST.

Webinar attendees can expect to hear how the mortgage lending process is being transformed into a pure digital format, and how that impacts borrowers, lenders and institutional investors. Webinar topics will include a discussion of current-day digital lending efforts on the point-of-sale, loan origination, closing and delivery phases of mortgage lending. The three hosts will demonstrate how their systems interact with each other and highlight the critical aspects of data integrity, workflow, exchange and compliance that provides the necessary framework for a pure digital lending process. 

“Digital lending is more than just a mobile loan application,” said Tim Nguyen, President of LendingQB. “The webinar will help broaden people’s perspective on what digital lending is and what its true potential is. Leveraging a data-driven mortgage lending process reduces the risk to investors because it provides the accessibility and transparency they need. To achieve this level of data clarity, it’s important that every participant in the process – the point of sale system, the LOS, the e-Vaulting system – be equipped with the best integrations that can communicate securely and seamlessly throughout the entire loan life cycle.”

“The point-of-sale is key to creating a positive digital experience with the consumer,” said Tim Nguyen, Co-Founder and CEO of BeSmartee. “But the consumer experience extends beyond a loan application. Lenders need to stay engaged with their borrowers by providing value-added services such as loan status updates, condition tracking, closing disclosures – activities that reach deep into the functionality of the LOS. Seamless integrations between the LOS and POS bridges the gap between consumer experience and a lender’s workflow that not only saves time and money, but ensures data integrity.”

“Lenders need to understand all the components of the eMortgage process so they can avoid costly mistakes,” said Dominic Iannitti, President and CEO of DocMagic, whose Total eClose™ solution seamlessly integrates every component of the closing process. “Digital mortgages require numerous technologies working in tandem. The way they communicate and interact with each other can have a huge impact on the effectiveness—and the cost—of the process.”

For more information and to register for the free webinar, please visit http://info.docmagic.com/digital-lending-webinar.

About DocMagic

DocMagic, Inc. is the leading provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services for the mortgage banking industry. Founded in 1988 and headquartered in Torrance, Calif., DocMagic, Inc. develops software, mobile apps, processes and web-based systems for the production and delivery of compliant loan document packages. The company’s compliance experts and in-house legal staff consistently monitor legal and regulatory changes at both the federal and state levels to ensure accuracy. For more information on DocMagic, visit www.docmagic.com.

About BeSmartee

BeSmartee, Inc. has developed a best of breed mortgage origination technology, enabling lenders to compliantly take their borrowers from the initial contact into Underwriting in 20 minutes with a complete application, credit report, income/asset documentation, eSigned/eDelivered disclosures and paid appraisal. Founded in 2008 with headquarters in Huntington Beach, Calif., the BeSmartee, Inc. team has worked on the front and back-end of mortgage originations for over a decade, using their knowledge and experience to shift the paradigm and develop a truly unrivaled experience with an array of tools and features catering to the specific needs of mortgage lenders and their borrowers.

For more information on how BeSmartee's Smart Mortgage can reduce the mortgage process by up to two weeks, visit www.besmartee.com.

About LendingQB

LendingQB is a provider of Lean Lending solutions. The Lean Lending solution consists of a 100 percent web browser-based, end-to-end loan residential mortgage origination system, best of breed integrations with key industry partners and ‘adoptimization’ services that result in faster cycle times and lower costs per loan. For more information, please call 888.285.3912 or visit www.lendingqb.com.

One of the nation’s largest lenders completes its first eClosing as an eWarehouse lender, using DocMagic’s Total eClose™ solution for eWarehouse lending

TORRANCE, Calif., April 21, 2017—DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that Texas Capital Bank has implemented its Total eClose™ solution. This implementation enables the bank to function as an eWarehouse lender. They can now accept and fund eNotes from its lender customers that want to drastically speed up the process of closing and selling loans.

Total eClose™, DocMagic’s eClosing technology, is a single-source, centralized platform that provides all necessary components to enable a completely paperless digital closing. Texas Capital Bank is a leading provider of warehouse credit facilities to fund mortgage origination and acquisition.

Texas Capital Bank recently funded its first eNote with a key lender client using DocMagic’s eMortgage technology suite. The eNote was instantly delivered to the bank, registered with MERS, and securely stored in DocMagic’s eVault. They completed the entire transaction electronically and transferred the eNote to Fannie Mae in minutes, rather than days.

“DocMagic’s eClosing and eMortgage solutions have provided Texas Capital Bank with the tools necessary to incorporate the funding of eNotes into our everyday operational procedures,” said Donnie Martin, Executive Vice President at Texas Capital Bank. “We believe the digital mortgage revolution and acceptance of eNotes will continue to grow. We are pleased to have partnered with DocMagic to build out the infrastructure needed to support the eNote funding process at the bank, which in turn supports the trend towards digital mortgages.”

“It’s very rewarding to support Texas Capital Bank as they move forward and break ground as an eWarehouse leader,” said Dominic Iannitti, president and CEO of DocMagic. “In this industry, it’s forward-thinking, tech-savvy organizations like this that thrive, set the pace and reach their goals. They understand the fundamental role that advanced technology plays in their—and the industry’s—progress. We look forward to collaborating further as we help drive true end-to-end eMortgage adoption.”

The Consumer Financial Protection Bureau (CFPB) has repeatedly encouraged lenders to implement eClosing technology and operational processes to make obtaining a home loan as easy as possible for borrowers.

North Carolina Secretary of State Elaine Marshall wants the state to be a leader in eCommerce. It adopted the Uniform Electronic Transactions Act, the Uniform Real Property Electronic Recording Act and the Electronic Notarizations Act. All of this was to prepare for the day when the state could institute eClosings.

“We have been working diligently over the past 15 years to build the infrastructure to build electronic commerce,” Director of Electronic Notarization and Notary Enforcement Ozie Stallworth said. “We thought it was a prime time for North Carolina to step forward and lead in this space because we have the legal infrastructure in place to support a full end-to-end eClosing. We looked to our state’s lending institutions to see whether or not they understood and believed that the industry was headed down the road towards eClosings.”

Stallworth determined the financial institutions were eager to move forward. North State Bank Mortgage President J. Kenneth Sykes agreed and said the state’s efforts are cutting edge.

“We believe that eClosings will enhance the customer experience and provide a more secure method of mortgage loan closings,” Sykes said.

Invitations were set out to financial institutions, title agents and technology providers asking them to participate in the pilot. Together the participants began educating each other on what was possible, potential barriers and what the eClosing transaction would look like.

“What we are trying to accomplish through this pilot is the full end-to-end electronic process,” Stallworth said. “Not the hybrid version. We encourage all forms of electronic commerce, whether it’s hybrid or not, but this pilot is focused on incorporating in-person electronic notarization so that the entire process from start to finish can be completely electronic without any paper in the process at all.”

DocMagic Director of eServices Tim Anderson said this pilot is unique because it is one of the first to be officially sponsored by the state.

“This will be a full paperless eClosing, including eNotary and both title and lender documents,” Anderson said. “We not only see this as providing a better consumer education and experience, but for the lenders selling the loan to investors to eliminate the post-closing issues, and if you can do that, investors can fund the loan with certainty and avoid any post-closing trailing doc issues that may hold up funding the loan. Everyone wins.”

eOriginal General Manager of Digital Mortgage Simon Moir agreed. He said the pilot offers an opportunity to bring all the players together in one place to remove the barriers — both real and perceived.

Potential barriers include jurisdictions that aren’t eRecording or still keep all files on paper. Sykes said with any major change of format within the lending industry caution is expected. But Stallworth said there hasn’t been any push back so far.

“The active participants in the pilot are reaching out individually and collectively to various stakeholder groups such as the Realtor association and the State Bar, the Bar association, the bankers association and others, to make sure they are aware and informed of this transformative effort. It is important to have the input of all the stakeholders to ensure that eClosing in North Carolina will be a benefit to all in the state and to the consumers in particular.,” Stallworth said. “We anticipate hearing more of those voices.

“Secretary Marshall has long stressed the importance of making technological advances to ensure that those doing business in North Carolina would be able to compete at the highest levels in an increasingly global marketplace.  This eClosing pilot program is the fruition of the many years of working to construct the statutory framework to support electronic commerce and will potentially be a model for other states to follow.”

TORRANCE, Calif., April 5, 2017— DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, reported a 42 percent increase in revenue for 2016. The company credits its growth to the mortgage industry’s demand for products that enable TRID compliance, eSignatures and eClosings. This is the second consecutive year that DocMagic’s revenue has increased by roughly 40 percent.
“Lenders have been looking for ways to assure TRID compliance since 2015, and DocMagic’s SmartCLOSE™ technology has become the industry’s go-to solution,” said Dominic Iannitti, president and CEO of DocMagic. “Our user base has grown quickly. A lot of existing DocMagic clients saw the value of SmartCLOSE™ immediately. It has also been an entry point for many of our new lender clients.”

SmartCLOSE™ enables lenders to interface with settlement providers and other relevant parties in a secure portal to share, edit, validate, audit, track and collaborate on documents, data and fees. In the past two years, DocMagic has completed numerous key integrations between lenders using SmartCLOSE™, their loan origination systems, and new settlement service provider systems. More integrations are being developed for 2017.

“The number of eSignatures completed has increased significantly since launching SmartCLOSE™ and Total eClose™,” said Iannitti, referencing activity for eSignSystems, a division of DocMagic that provides digital transaction management and electronic storage systems. “Lenders appreciate that they can stay compliant while gaining the speed and convenience of a digital process.”

DocMagic anticipates its growth will continue in 2017. In February of this year, the company completed a successful pilot that enabled one of the country’s largest warehouse lenders to accept and fund eNotes, a transition that Iannitti expects to become a major industry trend in the next 12 to 18 months.

“It’s very simple — at DocMagic, we’re dedicated to addressing the industry’s needs and demands with the very best solutions on the market,” said Iannitti. “That’s been the foundation of our business since we started, and we’re pleased to say that it remains the formula for our growth today.”

DocMagic’s growth plans include ongoing calibration of its infrastructure. To maintain its standard for high quality and service, the company added staff in nearly all functional areas, including senior software developers, project managers, implementation specialists, technical support representatives, integration staff and business development professionals.

progressinlending.com | And The 2017 Winners Are … //

PROGRESS in Lending Association has named the work done by DocMagic a top innovation. As the mortgage industry slowly embraces the Digital Mortgage, DocMagic launched what was dubbed its “Total eClosing solution,” which enables a comprehensive, true 100% paperless eClosing that automates the entire process — from start to finish. Looking back, DocMagic was brought to the forefront of eClosing technology awareness with its participation in the CFPB’s eClosing pilot in 2014. This vendor was 1 of only 12 firms that was invited by the CFPB to participate. If the industry is going to go digital it will need vendors like DocMagic to lead the way. The Total eClose solution includes the seamless incorporation of its eSignature-enabled SMART Documents, a nationwide eNotary network, MERS eRegistry access, eWarehousing, eNotes, a secure eVault, and secure investor eDelivery — all in a single, comprehensive eClosing platform and completely TRID-compliant. There is absolutely no paper involved at any point, at any time.

TORRANCE, Calif., March 16, 2017—DocMagic, Inc., the premier provider of fully-compliant loan document preparation, regulatory compliance and comprehensive eMortgage services, announced that it was named to National Mortgage Professional (NMP) magazine’s annual ‘Top 100 Mortgage Employers’ list for 2017. This is the second consecutive year that DocMagic has earned placement on the annual list.

Winners were selected using NMP magazine’s proprietary Mortgage Company Employer Score (MECS), which weighs and scores various areas in a company to arrive at the list each year. A polling of NMP subscribers is used with the following criteria: corporate culture; compensation; day-to-day management; internal communications; marketing; training; resources; long-term strategy; ingenuity; speed; technology; and industry participation.

“Employees are the heart and soul of DocMagic—it’s their ingenuity, dedication, and constant commitment to raising the bar that continues to make us one of the mortgage industry’s longstanding category leaders,” stated Dominic Iannitti, president and CEO of DocMagic, Inc. “We are pleased that National Mortgage Professional magazine has recognized the contributions the DocMagic team makes to the industry, and we’re proud to be selected as a Top 100 Mortgage Employer for the second consecutive year.”

NMP is one of the mortgage industry’s leading go-to sources for extensive news coverage for mortgages, origination, compliance, secondary marketing, servicing, settlement, technology, trending, and more.

By Tim Anderson

The days of no pressure are over. Any lender that hasn’t already waded into the ePool had better be ready to jump. With immense regulatory pressure looming, the old method of just doing something is no longer sufficient. It's time for a new tack.

The recent news about the IRS decision is an ex- ample of this. With all the buzz around this news, we’re already hearing from lenders who are interested in a point solution that will allow them to take advantage of this decision for doing business with the IRS. This makes sense because this is front and center in the news, but since these lenders are not considering how this decision impacts the rest of their business, it’s short sighted.

The 4506-T is just one document and while it makes good sense to make the ordering, accepting, processing, filing and storing that document all electronic, what about all the other documents? The e-signature part of this solution can and should be applied elsewhere in the enterprise. When it is extended, it should be done the same way. If it’s good enough for the goose, it’s good for the gander as well.

Seeking a paperless map. Electronic signatures are more than a digital picture of a signature; they are a process, a ceremony. E-sign is a legal process that includes proof that the borrower actually viewed every document, whether there’s a signature or not. Auditors will demand to know if the borrower actually viewed every document. There are also requirements around whether the signature is embedded or an overlay. There are other requirements around how the lender provides the tamper- evident seal. Investors have a lot to say about what is actually involved.

Providing a common and consistent eSigning experience. These processes can vary by vendor, but using different types of e-sign technology across an enterprise can cause problems with investors, to say nothing of confusing borrowers and degrading the consumer’s experience. Remember, from the consumer’s perspective, there are many other documents they would like to sign electronically. If the lender hopes to get consumer adoption, the same tools should be used across the entire process and borrowers should not be asked to sign some documents electronically and others traditionally.

Lenders no longer have the luxury of gently moving into the paperless world. They need to get in soon and they need to take their entire lending process with them. That means that institutions will be seeking solutions that will get all of the paper out. Lacking that, they will seek out partial solutions that already carry within them the map for the future steps that will get them fully electronic.

The very best way to ensure that is to work with a vendor who can take you down that road as fast and as far as you want to go, but in no case slower than the government requires. Choosing a vendor that can only provide a point or piecemeal solution, without a plan for getting to the next step, will put the institution at risk.

An “e”nterprise solution, from application, to closing, to servicing. A good RFP will go a long way toward separating those players who cannot provide a complete solution from those that can. It will also reveal which vendors understand the nuances—from application all the way to closing and loss mitigation—that could impact the lender’s ability to comply with investor and regulatory guidelines. Moving into electronic lending is no longer a simple, cheap or fast implementation. Like everything else in this business, it requires careful consideration.

---

This is part one of a two-part article on the industry-wide transition out of paper-based processes to electronic, from application through to closing and servicing. Tim Anderson is the Director of eServices at DocMagic.

Posted with permission from The Mortgage Executive Magazine.

By Tim Anderson

For years a core group of us has been telling the industry that it’s time to get the paper out of our systems. We’ve performed studies that show paper is more expensive, that it takes more time to process, is usually missing pages or signatures, or gets lost. It took the foreclosure crisis to really bring home to the industry the negative implications of lost or incomplete documents. After billions of dollars in settlements to federal regulators and attorneys, it looks like our industry is finally ready to say goodbye to paper forever, or at least a majority of it.

Anyone who has yet to be convinced will get all the persuasion they need when the Consumer Financial Protection Bureau implements the Three Business Day Rule for mortgage loan closings. When lenders and their closing agents are forced to deliver a correct settlement statement to the borrower three days before closing, they’ll learn just how difficult it will be to get everything right and on time in a paper world. Taking their businesses fully electronic will be the only way to ensure compliance.
The good news is that the vast majority of lenders are already moving in that direction. In January, the industry got a boost when the IRS announced that it would finally be accepting electronically signed documents for the ordering of 4506-T tax transcript orders. The FHA, one of the very few remaining federal government holdouts, is expected to follow suit later this year.

The worry now is how lenders will go about making that important transition. Pushing the point solution. For much of the past decade or so, electronic lending advocates like myself have been urging lenders to quit worrying about their entire enterprise and just pick a process and take it electronic. By taking out the paper in a piecemeal fashion, lenders would at least be moving in the right direction and selling themselves on the benefits of paperless lending in the process. This tactic worked for a number of reasons.

First, it was inexpensive. When it comes to technology systems, it always costs less, in the short run, to isolate your systems and concentrate on a single process. This kind of razor sharp focus lets technologists create workable solutions more quickly. But if we’ve learned anything from the foreclosure process, it’s that there are no truly unconnected systems in our business (or at least there shouldn’t be). Ultimately, the lower price tag enticed more lenders to dip their toes into the paperless world and this was good news.

Second, when the project is kept tight and focused, it doesn't take long to configure and test a solution. This meant technologists could finalize their work faster on isolated processes and deliver successful pilots to lenders more quickly. In the end, a successful test is the only way to convince an executive to move more deeply into a solution.

The biggest reason that partial solutions were beneficial in the early days is that by getting lenders to experience their business without paper, the benefits that researchers promised proved to be real. It became clear to the industry that it really did make sense to do everything electronically.

This prompted more lenders to take another step into the digital world, and another one after that. Because the industry was under no real pressure to make this shift work, many lenders made a gentle transition toward fully electronic systems and are enjoying the benefits today.

---

This is part one of a two-part article on the industry-wide transition out of paper-based processes to electronic, from application through to closing and servicing. Tim Anderson is the Director of eServices at DocMagic.

Posted with permission from The Mortgage Executive Magazine.

{{cta('92144eec-8ead-4b32-969f-8ddeea62763b')}}

 

@import "/sites/all/themes/docmagic/css/fix-ie.css"; By Brian A. Lee

E- or digital mortgages offer increased speed, efficiency, and savings, but lenders and other industry players still face challenges in implementation.

Fintech investment has skyrocketed in recent years, from $1.8 billion in 2010 to $19 billion in 2015, according to a Citigroup report, but the mortgage industry, by most accounts, has been slow to board that high-speed train. Regarding the adoption of digital mortgages, lenders and other industry players are more apt to be like your old-fashioned parents who outwardly embrace innovation but wind up only using a relatively small percentage of their tech tools and gadgets. Many lenders have engaged in hybrid deals—both electronic and paper—and the end-to-end eMortgage definitely constitutes the logical progression in the marketplace, but obstacles remain in the two major areas essential for originators and mortgage bankers to operate: the source of liquidity to fund loans and the secondary market to purchase them.

The absence of warehouse banks, which serve as that source of liquidity for mortgage bankers willing to adapt their paradigm to accept eNotes as collateral, certainly plays a major role, according to Donnie Martin, EVP at Texas Capital Bank.

“One reason is the revenue model of warehouse banking, which is based on interest income, the interest earned in the time elapsed between the funding of the loan and the sale of the loan in the secondary market,” he says. “eNotes and eDelivery drastically reduce the time it takes to purchase a loan in the secondary market, which has a negative impact on the interest income of a warehouse bank.”

Secondly, the lack of a secondary market constitutes the backend bottleneck for mortgage bankers and warehouse banks with regard to e- or digital mortgages.

“Presently, there are two primary investors in the market for eNotes: the GSEs. To put it simply: if you can’t fund or sell it, you can’t originate it,” states Matt Fair, SVP at Texas Capital Bank. Not all hurdles hindering the widespread acceptance of digital mortgages are structural. The housing crisis and economic downturn affected more than people’s stocks and credit ratings. The challenges that faced the industry during that period all but stopped the development and implementation of digital mortgages, according to Martin. The GSEs purchased the first two eMortgages on the secondary market way back in 2003.

Rated E for Efficiency

Necessity is the mother of invention, it’s been said. Compliance, collaboration, and convenience are strong demands in the mortgage marketplace, and more and more industry players are discovering that an eMortgage can speed those needs.

“There really is a groundswell around eMortgages now compared to any other time in the industry,” says Scott Babin, EVP of Operations at Michigan Mutual, parent company of MiMutual Mortgage, crediting government endorsements of and mandates for the electronic transmission of documents.

Lenders included these highlights of digital mortgages in their commentary to Fannie Mae: operational efficiencies and cost savings, increased data quality, improved risk management, quicker warehouse inventory turnaround times and faster liquidity in the secondary market.

“There is great margin pressure to create operating efficiencies,” adds Babin. The rate environment and increased regulatory burden since the housing crisis did not help the industry’s ‘e-volution,’ if you will. Those things changed but, as mentioned above, the firm focus on efficiencies and savings by financial institutions never does.

“In today’s environment of rising rates an compressed margins, lenders will seek avenues to increase efficiencies and widen margins,” says Martin of the Richardson, Texas-based Warehouse Bank. “[The digital mortgage] can be an effective tool to achieve this goal.”

Despite the challenges, Martin expects that the continued adoption of full digital mortgages, including the eNote, will propagate over the next few years. Linn Cook of LendingQB credits PayPal, ApplePay, and other electronic payment platforms, as well as DocuSign, for boosting consumer acceptance of signature-less transaction technology. Hybrid home mortgages have helped, too.

“Hybrid eClosings [or digital mortgages] have been taking place for many years now and based on results from [the 2014] Consumer Financial Protection Bureau pilot program, consumers see a number of benefits, including a better understanding of the documents, a more efficient process and feelings of empowerment or more control over the closing process,” Martin says. “Driven by consumer sentiment, digital mortgages will continue to be embraced by the mortgage industry and the process will evolve over time.”

Babin seconded the point about technology creating a better consumer experience, a major focus of most mortgage originators in today’s market. The Michigan Mutual executive vice president also pointed out that with recent government adoption of eSignatures on key mortgage documents, such as 4506Ts and FHA 92900As, some lenders have implemented an application process that only papers out at closing.

Radius Financial Group Inc. touted one of the industry’s first comprehensive “eClosings” in October 2016, where the note/collateral was automatically registered with MERS, then securely sent to DocMagic’s eVault, and within minutes rather than days Fannie Mae had the full collateral package. The Norwell, Mass.-based mortgage lender said that eMortgage ease of use will especially appeal to millennials, which will make up 61 percent of new homebuyers in 2017, according to Realtor.com.

Martin, the Texas Capital Bank executive, broached some benefits that digital mortgages afford to warehouse banks. MERS, which serves as the legal registry for eNote location and ownership, facilitates the immediate recognition of a warehouse bank’s security interest in a particular promissory agreement. Digital mortgages also provide for a more streamlined process from the receipt of the note at the closing table to its eDelivery to the secondary market.

“The delivery of eNotes, which in most cases are received by the warehouse bank and delivered to the secondary market investor on the same day as funding, virtually eliminate the complications that can arise out of traditional overnight delivery channels, as packages are not lost, damaged, or delayed due to inclement weather or other external factors.”

Digital Deeds: Slow But Sure

Athird quarter 2016 survey by Fannie Mae and Freddie Mac of 130 “key industry stakeholders,” including lenders, servicers, warehouse banks, settlement providers, and vendors, found that overall adoption of eMortgages has been slow.

The GSE survey asserts that eMortgages continue to gain acceptance among lenders, which are willing to initiate the process while warehouse banks, servicers, and settlement partners, such as title companies, will adopt when requested by lender partners.

According to the GSE survey, common concerns across the various mortgage industry segments include:
•Acceptance by a limited number of investors
•Warehouse line availability
•Lack of key stakeholder readiness: servicers, document providers, custodians, title/settlement agents, etc.
•Implementation complexity
•Inadequate return on investment based on industry volumes
•Lack of uniform adoption of eNotarization and eRecording
•Resource/financial constraints
•GSE policy alignment



The massive changes in mortgage systems and workflows required to implement the TILARESPA integrated disclosures (TRID) perhaps could benefit the industry in the advent of digital mortgages. Or one could argue it cuts the other way with wariness and fatigue holding sway. After all, sweeping industry change with the unavoidable compliance ramifications involves a lot of moving parts and preparations.

“[The CFPB] shined a bright light on the ‘e’ process as the preferred way to meet TRID requirements and consumer education and empowerment, says Dominic Iannitti, president and CEO of DocMagic Inc., a single-solution provider that delivers a fully paperless end-to-end digital mortgage solution. “And Director Richard Cordray says it is the number one thing he wants to see get mainstream adoption before his tenure is up.”

Cook of LendingQB says: “TRID has come and gone and the industry did not implode. Costs are higher, but that was to be expected given the amount of change that occurred. What TRID accomplished was prove to the mortgage industry that major changes to the way that business is done can be accomplished… A side effect of TRID was that it forced lenders to re-think their processes and in some cases improve their workflow. This is a bigger deal than many people think because most lenders are stubbornly resistant to change, even if they know it benefits them.”

So how close is the industry to making end- to- end eMortgages a reality though? As if pointing to the first concern from the above GSE survey, Iannitti says to follow the money trail.

“This will occur when more of the traditional investors begin buying eNotes,” affirms the leader of the Carson, Calif.-based provider of mortgage loan documentation software products and services. “We believe a few large players will be stepping up to support the purchase of eNotes in 2017.”

Bruce Carr, CEO of MiMutual, adds, “The industry needs acceptance by both investors and warehouse banks to have eMortgages attain the level in the industry it deserves. The other big hurdle is municipalities: With limited resources at the municipal level greater acceptance of eMortgages could be very slow.”

Approximately 1,500 of 3,142 counties in the country, covering about two-thirds of the population, support electronic recording, with new counties adopting the digital method each month, according to Jerome Jelinek, CEO and General Counsel of Corporate Settlement Solutions, a settlement provider based in the Cleveland metro. “Hybrid closings are a necessity when the property subject to the mortgage is located in a county not equipped to receive electronic recordings,” Jelinek adds. “The remaining mortgage documentation, however, may be completed electronically, including the eNote. As a result, the digital mortgage process remains mostly unchanged, and the benefits are still received by the lender and the consumer.”

There’s no doubt that industry acceptance of digital mortgages will continue to grow, as structural and technological challenges give way to the relentless pursuit of increased efficiency and savings. For Iannitti of DocMagic, the “e” could stand for an enhanced customer service experience for the homeowner and “dramatically improved execution” for the lender. Those values are easy to embrace.