Although the mortgage industry is awaiting the CFPB’s e-closing pilot findings, it is anticipated that the results will substantiate the benefits detailed in the agency’s previous e-closing observations, and even highlight additional benefits. The findings are also likely to offer some insight into how the industry might fully embrace e-closing technology and when it could be adopted.
It’s clear that this technology will become a much bigger part of the mortgage closing process, but as with any major industry change, it takes time to get all stakeholders on board. However, with the CFPB and other investors considering e-closing technology, the expectation is that the majority of the industry – and consumers – will begin to enjoy some of the benefits of this technology by the time the Loan Estimate and Closing Disclosure delivery rules go into effect this fall.
It is likely that additional e-closing pilots will begin to surface in early 2016. Regardless of whether an originator is able to offer consumers a hybrid or more complete e-closing process, both parties will certainly experience improved customer satisfaction via the online experience. Hybrid e-closings begin with electronic disclosure document and appraisal delivery, while also offering additional document up load, completion and acknowledgement capabilities. Consumers can review, ask questions and when ready, e-sign the majority of loan documents prior to closing, and on the closing date they will wet-sign or e-sign the remaining documents in the presence of a signing agent, whether from home or at a closing office.
By significantly reducing the number of documents that must be signed in the physical presence of a signing agent, hybrid e-closings speed up the in-person closing process. E-closing solutions like ServiceLink’s ClosingStream eClosing Platform enable consumers to review documents at least three days in advance of the closing date, helping to ensure that they have a better understanding of what they are signing, allowing them to educate themselves and obtain answers to their questions and allowing any document discrepancies to be resolved prior to the in-person closing.
For originators looking to offer consumers the convenience of a more complete electronic closing process, Web-based e-closing solutions are available. These solutions provide all of the functionality of a hybrid solution, but also enable collaboration between consumers, closing professionals and e-notaries in a secure virtual office to review and execute loan documents. E-notaries at the table or a Web-based closing are a recent addition in the development of e-closing solutions.
With hybrid e-closing processes, originators and closing companies will be better positioned to improve the efficiency and convenience of closing for all stakeholders. But, the benefits don’t end there. Originators will also be able to better ensure data accuracy and to track the date and timestamp of every action in the closing transaction using electronic audit functionality. As a result, originators will not only improve their closing processes, they will also be able to provide MISMO standard data sets collected from the e-closing process.
We look forward to hearing about more advanced e-closing pilots in the coming months.
