PERSON OF THE WEEK: The electronic signature is now a standard part of the mortgage experience. Most, if not all mortgage lenders now support and accept e-signatures, as most are now moving toward a completely paperless, all-digital mortgage process.
Although a majority of lenders are still delivering a hybrid digital/wet-signed process, where certain critical documents are “wet signed” in-person, at closing, a select few have gone fully digital, “end-to-end,” including the issuance of an e-note.
Regardless, with most mortgage applications now being initiated online – and many other transactions now being handled electronically – the e-signature has become mainstream. Most people in the mortgage industry agree that e-signature technology will only see increasing adoption over time.
To learn more about the evolution and maturation of e-signature technology and how it continues to revolutionize the digital mortgage, MortgageOrb recently interviewed Harry Gardner, executive vice president of e-strategies for Docutech, a provider of document, e-sign, e-closing and compliance technology for the mortgage, home equity and consumer lending industries.
Q: In the industry’s advancement toward a fully digital mortgage, describe how you’ve seen the role of e-sign for lenders and for borrowers evolve.
Gardner: Many industry participants don’t realize that today’s “digital mortgage” has been focused on the front-end of the origination process – streamlining borrower communications, verifications and loan underwriting. Nearly all digital mortgages today end up as paper closings. We believe that a true digital mortgage must include an electronic closing, to eliminate the “drop-to-paper” at the closing table and further streamline the loan process, providing benefit to both lenders and borrowers.
The ability to integrate external documents (both one-off lender docs and title/settlement docs) into an e-closing package is important, in order to make each e-closing as “e” as it can be.
Q: For lenders that have been using an e-signature technology, have they experienced limitations from an integrated process/systems standpoint?
Gardner: Sometimes, yes. Today’s enterprise e-signature solutions are not tightly integrated into the lender’s document production system, because they are separate systems. So when loan disclosures or closing documents are generated (either from the loan origination system or a document provider), a lot of integration work is needed to ensure that all signature points are tagged and that all possible borrower interaction points (checkboxes, radio buttons, text fields, required/optional, etc.) are fully supported.
Ideally, the doc generation engine and the e-signature engine are inherently integrated and no additional work is necessary to support all signature and interaction points and ensure that borrowers can’t miss anything. This is assured when the document engine, the e-signature engine, and the e-vault are all provided by the same entity.
Q: What should mortgage lenders look for in an e-signature solution?
Gardner: Strong security and compliance with the foundational laws (ESIGN and UETA) are table stakes, of course. Beyond that, the key question is: How many disparate systems must be integrated together in order to fulfill all components of an e-closing solution?
In some solutions, there are individual vendors and systems integration points for document production, e-signatures, the SMART Doc e-note, e-vaulting, e-notarization and e-recording. This can make it difficult to track down a problem if something isn’t working right.
And what about the integration back to the lender’s LOS and document repository for post-closing, e-signed documents? Lenders should look for a strong ability to push-back e-signed documents (and other post-closing docs and data) without manual effort.
Finally, there should be an easy way to ingest and tag external documents, to make them a seamless part of the full e-closing package and streamline the borrower’s experience as much as possible.
Q: What do you see on the horizon for e-sign technologies?
Gardner: The industry is at a good point right now, in terms of being able to evaluate and adopt e-closing solutions while no major headwinds like TRID are looming.
E-sign technology has become mainstream in our society, and lenders are looking to transform their operations in order to trim their origination costs wherever possible, so saving hundreds of dollars per loan with e-closing is compelling.
We expect increasing levels of e-closing integration into the borrower portals that today’s digital mortgage concept is built around, and growing recognition that even greater cost savings are possible by streamlining post-closing QC and paper chase operations with the right solution.
Finally, there’s now an unprecedented level of industry awareness of the challenges with e-notarization today, and states are rushing (as much as state government bureaucracies can “rush”) to pass legislation supporting face-to-face e-notary as well as the new remote online notarization (where the signer and the notary are connected via audio/video link).
The future is bright for e-signatures in the mortgage industry.