PERSON OF THE WEEK: Harry Gardner is executive vice president of e-strategies for Docutech, a provider of e-signature and e-document technology to the mortgage industry. MortgageOrb recently interviewed Gardner to learn more about the benefits that e-signatures bring to lenders – as well as the challenges.
Q: What are some of the benefits to using e-signatures as opposed to wet ink signatures during mortgage transactions?
Gardner: Using e-signatures to facilitate mortgage transactions presents many benefits for both lenders and borrowers, especially when you consider how they fit into the larger electronic mortgage process.
For one thing, documents are more secure, since electronically signed documents can be tamper-sealed after signing. Paper documents, on the other hand, are always open to tampering downstream.
Documents will also be more accurate, since strong e-sign systems will ensure that the borrower addresses all required fields. Plus, e-signatures are conducted with technology that makes it easier to meet Consumer Financial Protection Bureau requirements and leaves an audit trail that provides objective evidence of compliance for both disclosures and closing documents. Not to mention, using electronic documents is much more environmentally- and cost-friendly, since there’s no need to spend money on paper and printing costs.
Conducting signatures electronically results in a more efficient and streamlined process for all parties involved. Lenders can expedite post-closing processing using automated document validation processes and easily check all docs, managing issues by exception. Borrowers will enjoy a more convenient signing process that can be completed from virtually anywhere and will even be able to preview documents to minimize potential closing table issues.
Q: What are some of the present challenges surrounding e-signatures?
Gardner: E-signatures have become mainstream in our daily lives, yet there are still many misunderstandings and misperceptions around e-mortgage, like the idea that e-signatures are somehow less secure than paper. In fact, they actually present multiple options for better authentication and security. These misperceptions have long been addressed and debunked, but the industry needs to be ever vigilant about educating lenders and investors about the realities of e-mortgage.
Hybrid e-closings are still common today, primarily because of the lack of legal e-notarization acceptance at the state level. This issue could be alleviated through the simple recognition that e-notarization is just a different type of “pen” that notaries can use to sign and does not require special state law addendums, because it’s already legal, as per ESIGN and UETA. Furthermore, there still needs to be broader investor acceptance beyond Fannie Mae and Freddie Mac. This would improve lender options for best execution when originating their loans.
Q: How can financial institutions optimize the e-sign experience for their customers?
Gardner: Many banks and lenders are embracing the borrower portal concept, where they manage their borrower’s experience through a consistent user interface throughout the loan lifecycle. This can improve borrower satisfaction and efficiency while reducing origination costs for the lender. Multiple new startups in this space are offering high-tech borrower portals that help gather needed borrower documentation and verifications and have become known as the “digital mortgage” (even though the vast majority of those loans still end up as paper closings).
E-signing systems can easily integrate into these borrower portals and close that gap, providing the lender-generated disclosure and closing documents to the borrower in that consistent, familiar user interface and further tightening the borrower/lender connection.
Q: How do electronic signatures fit into the larger e-mortgage process?
Gardner: Very easily. E-signatures help make the entire process cheaper for the lender and faster and better for the borrower. It’s a true example of a “win-win” situation.
Q: What features has Docutech recently introduced to its technology and services to provide an enhanced e-sign experience for lenders and borrowers alike?
Gardner: Last year, we redesigned our e-sign platform, Solex, with several key concepts in mind. For one, we wanted to provide a best-in-class user interface so that borrowers enjoy an easy, self-guided signing experience. This user-friendly experience is also supported on mobile, as we developed Solex with a responsive design framework that intelligently scales the interface to all screen sizes – an especially important feature these days considering that millennials want to use their smartphones for nearly everything.
Furthermore, the user interface can be completely branded for operation within a borrower-facing portal, appearing as an integrated e-signature engine. We also added single sign-on, two-factor authentication and many other lender-configurable options for maximum flexibility. Last, but certainly not least, even though our technology is already handling high-volume transaction levels without issue, we’re constantly improving our platform to ensure that it provides the maximum level of efficiency and scalability.