Are You Considering e-Closings?

The COVID-19 pandemic has impacted many aspects of the real estate and mortgage industries. Fortunately, some of its effects have been positive. Some mortgage professionals have suggested that COVID has advanced the industry 10 years, in terms of digital technology adoption. This is especially true for digital lending. When COVID struck, lenders were forced to transact remotely, leading many to start taking advantage of digital tools that had been available to them for years. And eClosings, especially, can benefit borrowers, lenders, and investors by providing convenience, efficiency, security, an audit trail, and cost reductions.

Many borrowers view the complicated mortgage process as a bit of a tangled mess. Digital lending has streamlined the process, improving borrowers’ and lenders’ experience. Drilling down into specific step-by-step procedures makes it easier for lenders to understand the eClosing process and move forward.

Lenders should start by using eNotes to increase efficiency and benefit everyone involved. Implementing eNotes is simple when you partner with the right mortgage software and document service vendors. You need a Mortgage Electronic Registration System (MERS) relationship for their eRegistry, an investor that accepts eNotes (Fannie Mae and Freddie Mac are leading the way), and a mortgage software partner that helps you get the eNote to that investor approved eVault.

If you haven’t already done so, establish relationships with the partners you need to originate and sell eNotes: MERS and a document service vendor who offers electronic documents and an eVault. In many cases, the lender’s loan origination software (LOS) vendor already has these relationships built into the LOS. So, the very first step for most lenders is to sit down with their technology partner and have that conversation.

If lenders work with the right loan origination software vendor—a company that truly understands what it means to be a technology partner—they will have what they need to adopt eClosings. This also applies to servicers, who can benefit from eClosings by receiving digital packages, making it easier to process onboarding in many situations. Remember, eNotes can increase efficiency and therefore profitability for servicers as well as originators.

Implementing eClosings is relatively easy when you have the right mortgage software and adopt new loan origination processes that support electronic closings. Your mortgage software partner can guide and support you as your credit union adopts electronic closings.

Read the ACUMA Pipeline article.