X + Y = ‘e’
The above equation can be confusing; I struggled with math. I attribute part of the problem to the guy who sat next to me in math class during high school. Had he applied himself more I would have done better. However this isn’t about math.
The audience is all ready engaged and will require the shortest learning curve, while being the quickest to adapt. The X and Y generation are the people that will to force the ‘e’ solution. They are tech savay, multitask endlessly, pay their bills electronically, have documents stored in the cloud and don’t do paper. The current generation is of age and wants stuff pushed to their Smartphone or tablet. They will execute their loan documents at 11:30 pm on Sunday. ‘e’ – Really.
Audience and Fraud are the two largest drivers that will compel the industry to move to ‘e’ quickly. The provider who implements smoothest ride to ‘e’ will win. Technology is the vehicle which enables lenders to remain competitive and differeniate from their peers. Lenders will naturally gravitate to the providers making it easiest to do business for them and their borrowers. Those providers who deliver the best solution; stable, secure and easy will be in a strong position when it comes to market share.
The mortgage and mortgage technology industry has never been willing to truly address the process and technology investment to fully move to ‘e’. There have been gallant attempts by various players to provide a solution, but when the rubber meets the road; roadblocks allowed for a minimalist solution. Counties won’t accept electronic documents, lack of an e-notary, non-acceptance by investors, HUD or the IRS, security; cost to implement, the list goes on. The roadblocks are down, all the reasons the industry has had about investing in ‘e’ are gone. E-Sign Act is law, 4506T has been accepted, lenders accept it, the GSE’s accept it, 1,096 counties currently accept ‘e’ representing over 65% of total transactions, e-notary is live and supported. Technology exists today to support all, but it is not convenient, efficient or friendly.
The pieces are in place for an end to end ‘e’ delivery. New solutions that tightly integrate process provides low hanging fruit for those companies that recognize opportunity. It is not inconceiveable those solutions can be delivered from technologists not in or fringe players in the industry today. These companies are not hampered with, ‘what is, or what was’, engrained process. They look through the glass with the design to introduce a totally new, comfortable, friendly experience. It is easy to imagine and not difficult to implement. Efficient data aggregators, outside of the traditional industry will recognize the opportunity and capitalize on it.
Nontraditional technology vendors have a clean slate on which to start. They are not saddled with legacy baggage. Regardless of the industry they invent, or recreate, they have the culture to obsolete existing ideas quickly. They have shown the willingness to spend big money to enhance earnings and market share. An ‘e’ document and digital signing offering, with high transaction volume and steady reoccurring revenue is attractive to any company that is willing to buy the ticket and take the ride.
The prospect of companies more effiecient in data aggregation, storage and mining, which already have tremendous stores of personal and property information moving into an ‘e’ vertical integrated with a lender shouldn’t be discounted. There isn’t any need to develop an application to manage loan origination. Data feeds throughout the process could interface with many existing origination systems real time. The complexity that state, federal and investor regulations bring as it applies to document availability, validating calculations, notification and presentment, can be solved easily with the acquisition of a document services company.
All of the roadblocks to a succesful ‘e’ process have been removed, with the exception of a well defined end to end solution. The solution needs to be a seamless; not cobbled together with disparate technologies, (loan origination system, document service, notary, title & closing agent system). It needs to be complete, functional, conveinent, user friendly.
Introduction of technology which provides a well choreagraphed, secure, easy to use solution for both the lender and borrower is the last barrier to gaining acceptance, thereby distinquishing lenders above others and establishing that competitive edge. When these standards are met acceptance is broader and confidence in the process is stronger. The question is will the road be paved by the existing mortgage technology providers or will they become speed bumps, as other non traditional providers develop a better solution.
About The Author
Alan Harris is the founder of IRIS Corporation and is a designated Certified Mortgage Banker, (CMB), with 25+ years’ experience in the real estate finance industry. He started in loan origination, servicing operations and system administration. Subsequently moving to Change Management, Process Re-engineering, System Integration and ‘e’ Implementation. Alan has ‘backend’ and/or User Interface ‘hands-on’ experience with the many Loan Origination and leading Servicing systems, managing integration or implementation of those platforms.