Point of sale (POS) technology—the shiny object for lenders in 2016—has become somewhat commoditized. Today, eClosing solutions are the most talked about technology among both mortgage lenders and title & escrow companies.
During a recent Mortgage Innovators podcast, Qualia’s Ty Cieloha and other mortgage experts discussed whether lenders or settlement agents will be the driving force behind widespread eClosing adoption and which eClosing solutions will come out on top. Cieloha was joined by Margaret Chiavini of Caliber Home Loans who moderated the discussion, along with Dan Catinella of Finance of America, and Michael Guidotti of American Pacific Mortgage.
Which eClosing solutions will come out on top?
This past year, dozens of eClosing solutions hit the market in response to COVID-19 and the need for remote closing options. “We had all these eClosing solutions that stormed the market at the same time, but title partners didn’t know which to use,” Guidotti said. He referenced one title partner his company works with that said they used 9 different eClosing solutions based on the preferences of their various lender partners—each with different logins and workflows. “There’s no way to keep up with that,” Guidotti said. “That’s where the rubber will meet the road. What solution will be the most streamlined or most integrated so that [title companies] can use the same login across the board?”
Catinella agreed that an integrated eClosing solution is important—not just from an operations perspective, but also from a consumer experience perspective. “[An ideal eClosing solution] will also integrate with the [lender’s] main POS system to create a single experience for the borrower,” he said. A single end-to-end borrower experience will not only create efficiencies, but will also eliminate any anxiety for the borrower around logging into multiple portals to provide sensitive information.
Ultimately, Guidotti and Catinella agreed that lenders must drive the selection of eClosing technology. “Depending on your investor, you can’t have multiple eVauts, so [lenders] must choose one eClose solution,” Guidotti said.
Title companies are also expecting their lenders to drive demand for eClosings. According to a recent American Land Title Association (ALTA) survey, title companies cited “lender and consumer requests” as a top factor influencing their timeline to implement eClosing technology.
National RON legislation may help accelerate adoption
Cieloha referenced a recent STRATMOR study which found that around 40% of lenders had invested in some form of eClosing technology; however, the net adoption of that technology among lenders and users (such as title companies) was only 16%. The three biggest barriers to adoption were 1) system integration requirements 2) internal IT capabilities and 3) getting loan officers to change their processes.
Guidotti added that a lack of uniform RON acceptance among state and local municipalities creates operational challenges for lenders who must assign “if this/then that” workflows based on different legislation requirements. “Smaller lenders may not have the types of systems or teams to build out the necessarily if this/then that workflows,” he said. “Across the board, [legislators] should allow for eNotes. This will create easier workflows and actual adoption.”
So far, 35 states have passed permanent RON legislation. At the federal level, the Securing and Enabling Commerce Using Remote and Electronic Notarization Act (SECURE Notarization Act) has recently been reintroduced in the House and Senate. The bill would permit nationwide use of RON.
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