Over the past few years, the mortgage industry has experienced significant progress in removing roadblocks to make digital closings a reality.
As a result, most states now allow eNotarization of mortgage documents; more lenders and investors accept eNotes; and several counties electronically record mortgages. Some states even allow borrowers to remotely sign documents in a closing that is conducted through video conferencing.
It’s inevitable that digital closings will one day become the norm, and most likely sooner rather than later. Lenders and settlement agents – indeed, everyone involved in the real estate transaction – will experience significant benefits from this transition, including reduced transaction costs, greater efficiencies, expedited turn times and improved consumer satisfaction.
With so many new technologies coming on the market, lenders have the advantage of choices. But, to truly reap the rewards of digital closings, they need to seek out a platform that sees closing not as a single process, but rather as part of a unified continuum of complete workflow management, from ordering services to document delivery, execution and fulfillment.
The intelligent technology in Black Knight’s Expedite Close end-to-end eClosing solution significantly reduce friction in the process by systematizing the complexities of bringing a loan from origination to closing. The end result is that the lender can focus instead on creating efficiencies, speeding up turn times and improving their customers’ experience.
The message is clear: digital closings are the industry’s future, and lenders that want to remain competitive will need to deliver these capabilities. Now is the time for lenders to research what type of eClosing technology will best support their consumers and business.
Deciding Which Digital Closing Technology is Best for Your Business
There are a number of essential considerations for lenders when exploring their options. First, it’s important to remember that while eClosings are gaining momentum, and will continue to do so, there are still many instances in which traditional “wet signing” is required. A best-in-class technology solution is one that accommodates all potential variations on the closing process, and dynamically selects the most effective way to close a loan for each individual transaction.
Consider, for example, when a borrower chooses to digitally sign documents but does not access them within the appropriate timeframe. Initially, this closing goes down the digital path, but it will at some point be necessary for a lender to adopt a workflow that supports wet-sign transactions.
Additionally, there are other factors that must fall in line for a complete digital transaction to occur. For example, the settlement agent needs to be on board with a digital closing; the title underwriter must accept this method; a county must allow eNotarizations, and so on.
And, when looking at state versus local requirements, the scenarios become even more complex. A state may allow – and even encourage – a complete digital process, but not every county within that state may accept eRecordings or eNotarizations.
For lenders to maximize the benefits of a digital transaction, the technology used to support the closing must be flexible enough to handle all types – wet sign, hybrid and fully digital – without user intervention. The best solution is one that leverage lenders’ preferences and business rules – as well as any jurisdiction-specific requirements – to automatically determine the best way to close any given loan.
Automated Workflow and Collaboration
For digital closings to occur at all, there must be electronic capabilities for document delivery, signing and notarization, as well as eVault and eRecording.
Getting to the closing table often involves multiple systems, participants and communication methods, as well as a mix of automated and manual tasks. This makes it challenging for lenders to maintain a consistent, efficient process. That’s why it’s important for lenders to consider a technology that standardizes and automates back-end tasks at moment’s notice.
To be most effective, the solution should enable lenders to easily connect online with providers, and order closing products and services via highly secure application programming interfaces (APIs), which enable various applications to communicate with each other. This would offer the added benefit of eliminating costly connections to individual providers and create efficiencies by standardizing the user experience.
Another key factor lenders should consider when evaluating technology that enables eClosings is whether or not – and indeed, how – the system supports the settlement side of the transaction. Ideally, whatever solution the lender chooses should not impact the way agents currently do business; there should be no new processes for them to adopt and no new technology to purchase or install.
A secure, online tool that pulls together and provides access to data and documents consolidated from divergent sources can meet these needs. In fact, the tool should act as a common workspace that not only supports interaction between lenders and settlement agents, but also brings all of the transaction’s participants into the fold, while taking into account each user’s unique process.
Black Knight’s end-to-end eClosing fulfillment platform – Expedite® Close – meets all of these requirements, and more.
Expedite Close uses intelligent technology and “lights out” processing to help reduce the complexities inherent in mortgage and home equity lending. The platform supports the eClosing process for all loan transaction types with comprehensive automation, workflow and decisioning. What is especially unique and impactful about the technology, though, is its ability to leverage embedded logic and client-defined rules to systematically select the best way to close each individual loan transaction – wet sign, hybrid, or fully digital – without lender intervention.
This digital closing software accommodates most potential variations on the closing process. For example, if a borrower chooses to digitally sign documents but does not access them within the appropriate timeframe, Expedite Close will automatically change to a workflow that supports a wet-sign transaction, eliminating document-fulfillment workflow gaps. When a consumer electronically signs documents, the technology determines if all the other factors are in place for a complete digital transaction to occur, such as the county allowing eRecordings and the state permitting eNotarizations.
Digital Closings Are the Future
Digital closings are the future of the mortgage industry, presenting lenders the opportunity to reduce costs, expedite processes and improve the client experience. Lenders need to act now to identify products and platforms that will fulfill their business needs and allow them to maximize the benefits of eClosings.
Lenders who stall on digital capability adaption, or those who implement products without thorough research, risk falling behind in an ever-changing industry.