Stewart in the Studio

Stewart In The Studio E15 - eMortgage Transformation Simplified

• Thomas Hoff

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Unlock the secrets of e-mortgage transformation and discover how to effectively embrace e-closings with insights from Brian, our expert guest who has extensive experience with major lending institutions. Learn how electronic closings can boost consumer satisfaction, speed up loan processing, and cut costs. Brian challenges the conventional wisdom of starting with a hybrid e-close, advocating instead for a process aligned with existing systems to minimize disruptions. With Notary Cam's done-for-you e-closing program, title agents are empowered, simplifying the transition for lenders and paving the way for a digital mortgage revolution.

The episode also sheds light on the automation of e-note generation and delivery, offering a streamlined process that slashes manual labor and enhances efficiency. Discover how lenders can leverage GSE-approved vendors and e-vaults provided by Notary Cam to ensure a seamless adoption of digital mortgage solutions. This done-for-you approach not only alleviates operational hurdles but provides title partners with a transformative advantage. Engage with your title partners and connect with us to spearhead this groundbreaking shift towards digital mortgages, setting yourself up for success in the evolving landscape.

Speaker 1:

You're tuned into Stewart in the Studio. Today we're diving into e-mortgage transformation and the steps lenders can take to get started now. Listen in to learn about a unique done-for-you approach that can fast-track your success so you can thrive in 2025.

Speaker 2:

From the Stewart headquarters in Houston, texas, usa. It's Stewart in the Studio.

Speaker 1:

We're live in 3, 2, 1. And we're on the air.

Speaker 3:

Hey, brian, great to have you on the show here. So, Notary, cam's Done For you. E-closing program provides lenders with the fastest path to e-closing with the least amount of effort. Before we talk about your program, what are the benefits lenders enjoy when they move to e-closings? In other words, why even bother?

Speaker 2:

Yeah, the benefits of electronic closings span across every stakeholder and participant in the transaction. Ten years ago, the CFPB conducted a survey of real estate closings in order to study the consumer benefits of electronic closings. Results were pretty clear that consumers who closed electronically felt better overall than those consumers closing by the traditional paper process. Consumers were more informed, felt more engaged in the closing process and really appreciated the ability to review documents, ask questions and correct errors ahead of time and not waiting until they got to the closing table. In addition to the consumer benefits, financial benefits of electronic closings and the e-notes have been discussed for the past 20 years. Lenders know about the faster delivery times, selling loans more quickly with better management of their cost of funds. What I don't think is enough attention are really the operational benefits of increasing efficiencies gained without needing to handle paper files okay, so increased efficiency.

Speaker 3:

Lenders hear this every day, but usually without operational specifics. So talk about the nuts and bolts. Where are these efficiencies to be had with the closing? Where's where's the payoff?

Speaker 2:

First of all, no more shipping costs, delays or lost files. Keeping all of the documents electronic it can all but eliminate the introduction of errors from pushing paper. Post-closing and secondary teams no longer need to manage physical files, eliminating the many extra touches that occur with those physical loan files. To put this into perspective, at a large aggregator we were able to reduce the amount of time the loan purchasing team spent on file intake by up to eight minutes per file. Another lender reported that one-third of her post-closing staff handles 70% of their loan volume. Those were closed electronically. 70% of their loan volume, those were closed electronically, whereas two-thirds of her staff handles the remaining 30% that were closed via paper.

Speaker 3:

So hold on a moment. The eight minutes per file on file intake is great. That's a huge savings, no question. But I love this other quote One-third of her post-closing staff handles 70% of the loan volume, where two-thirds of her staff handles the remaining 30% that were closed via paper. And every lender works with multiple title companies, so does the workload just get shifted to the title company so they have to prep the file for electronic closing and map the signature blocks and initials and the dates and all of that and map the signature, blocks and initials and the dates and all of that.

Speaker 2:

These benefits do not just apply to the lender, but to the title company just as much. Anyone that needs to touch a loan file can benefit from moving to digital. So to answer your question of why bother, if an organization wants to deliver a better consumer experience, reduce costs by delivering e-notes and gaining operational efficiencies allowing for better staff and resource management, then it's absolutely worth the bother.

Speaker 3:

Okay. So the benefits are clear, but the typical path to implementation really is not. Can you share some of the hurdles you saw firsthand? I know you held key positions at a major bank and a leading independent mortgage banker, so just talk about the process and kind of where you had to devote staff and how all that worked.

Speaker 2:

There's very limited information on how to get there and how to implement it. Many organizations have provided those you know how-to guides that highlight the big ticket items that are needed, such as doc, provider partners, e-notes, e-vault, provider, mers, registration, investor agreements, funding challenges. All of those items are critical steps, but there's so much more that needs to be done in order to be able to make this switch. Having led these efforts at two major lending institutions, I kind of have the bumps and bruises of going through it. While getting legal compliance approval is always a challenge, lenders need to be able to fund and sell e-notes. You know those steps are fairly straightforward the investor, the warehouse, the secondary markets of twister that lenders put themselves into. You know, another hurdle that I had to learn the hard way was what level of e-close should you start with?

Speaker 2:

The prevailing thought, even for me, was starting with a hybrid e-close was the best first step. With a hybrid e-close was the best first step. This is for your non-critical documents, you know, the documents that don't impact funding or record or sign electronically, usually ahead of time, and then the critical documents are wet ink, signed in person with the notary. While in theory, this sounds like the right approach, but challenges arose during planning and implementation. I think we spent the most time trying to figure out how to operationalize a hybrid e-close than for any other option we implemented.

Speaker 2:

The easiest way for lenders to be able to implement digital closings is to be able to keep their process as close to the thing as it is today we want to minimize the impact where implementation can be much easier, relatively speaking, of course, and that's where I think our approach can really help putting the power in the hands of the title agent to truly be a partner, to really help minimize the changes that lenders have to go through operationally in order to make implementation so much easier.

Speaker 3:

Okay. So we know the benefits and we know the hurdles. How can a lender listening today start on their path to e-closings using your done-for-you process?

Speaker 2:

What we're building here at Notary Cam is based on my experiences and really trying to design to take as much burden off of the lender as possible. Where I've had the most success from the lender seat is being able to find a title and settlement partner that could provide me with the equal solution and really drive the process and really drive the process. All I wanted to do was to give them my documents, just like I do today on every single transaction, and then let them do what they do Let them close the transaction. While some of the larger title companies either have their own e-close platform or license from another vendor, not every title company has the resources to be able to do that. Plus, this would require the title company to have the staff, the know-how to use the system and to be able to close the loans electronically and even possibly have their own raw notaries. This is where we step in with our existing and prospective title partners. Our ecosystem will put the power in the hands of any title and settlement provider to be able to conduct electronically closed transactions for any of their lender customers. Lenders can send their loan documents to the title partner just as they do today. Again, we're trying to minimize the infusion into the lender's current process. The title company will submit the request to us. Then we will provide all of the tools, the title's current process. The title company will submit the request to us. Then we will provide all of the tools the title company will need.

Speaker 2:

We consume the so-called dumb PDF package. We're able to ingest it automatically, tag the loan package, but reduces the manual and tedious task of document tagging. Within the same process, we're able to gather the data and generate the e-note on a GSE-approved vendor and then deposit this into a notary cam provided e-vault. Then we can either automatically deliver the completed e-note to the lender's e-vault, if they have one, or we can set up and provide the lender with their own e-vault, if they need one. We can set up and provide the lender with their own e-vault if they need one. By taking away a majority of the operational challenges from the lender, we feel like that this done-for-you approach can provide a powerful tool to our title partners in order to deliver an exceptional and game-changing advantage. You know the best next step that any lender can take is to reach out to your title partners and encourage them to contact us in order to get started. We can help you kick off your digital mortgage revolution. Thank you.