As the mortgage industry deals with life after the financial meltdown, we are finding that the industry is going to be more regulated then ever before. How do lenders deal with this new world? According to the executives at Simplife, electronic collaboration is the answer to ensuring success in the emerging mortgage market. How is that possible? Nancy Alley and Paul Clifford explained their industry viewpoint in a conversation with our editor. Here’s what was discussed:
Q: Paul, You have been in the financial services industry for over 16 years. You have really been a pioneer in the e-recording business. How has e-recording evolved over the years?
PAUL CLIFFORD: E-recording has certainly come a long way. E-recording is the process of submitting documents, whether signed in ink or electronically, for recording online and having them reviewed, recorded, and returned back to the submitter electronically. It transforms a process that could take several days or even weeks down to minutes. When you talk about the evolution of e-recording, it started out cutting-edge but has now become a common practice. In fact, close to 70% of all originations occur in a county where the recording can be done electronically.
Why has this happened? Thanks to laws like UETA, ESIGN, and URPERA, a contract cannot be denied validity, legal effect, or enforceability solely because it was formed using an electronic signature or an electronic record. Once the legal construct was in place, we just had to drive adoption. As you can imagine, the usage grew steadily as counties came online.
Over time, there has been much less fear and confusion over what e-recording is, and instead, more and more people embrace and advocate for the tremendous benefits that come with e-recording adoption.
Q: If we stay on that topic, Simplifile has a vast network of over 17,000 closing and settlement companies in addition to over 1,233 counties with nearly 9 million e-recording transactions recorded annually. How has Simplifile been able to gain so much traction?
PAUL CLIFFORD: It has been an ongoing process. Simplifile has diligently worked for the last 15 years educating and promoting e-recording. We have worked on a national basis within all markets across the country having local representation and consistently attending over 220 events annually. This has given Simplifile an intimate knowledge of all of the complexities within each market around the country and how to best portray those nuances in simple ways. In the end, we are committed to the advancement of industry standards and best practices by taking many leadership positions in both PRIA and MISMO. Simplifile is committed to supporting our clients and always doing our very best to make sure our service is making their lives better.
Q: Nancy, for more than 20 years you have dedicated your career to driving innovation and leveraging technology in the mortgage industry. What brought you to Simplifile?
NANCY ALLEY: I have a long history working with Software as a Service models to move the mortgage industry to a totally electronic environment. So, my tenure in electronic mortgage collaboration is perfectly aligned with Simplifile’s value proposition. What I found most interesting is that Simplifile brings the side of the equation that often gets overlooked: the settlement agent. I was intrigued by the tremendous gains we could achieve as an industry if we could connect the settlement agent into the process electronically. Thinking ahead to August 1, I can’t think how organizations could remain compliant without electronic collaboration. Our new services, Collaboration and Post Closing, were designed to deliver on the promise of a world where agents and lenders connect transparently.
Q: You talk about how Simplifile “connects lenders, settlement agents, and counties,” why is that important in today’s market?
NANCY ALLEY: It’s critically important. With the TILA RESPA changes, being able to connect lenders to their settlement agents is more important than ever to get the fee collaboration and transaction details right. The movement of data, documents, and correspondence needs to be controlled, tracked, and audited to ensure a compliant process. In addition, the transaction doesn’t end at the closing table. Trailing documents continue to be an industry pain point. Lenders need to know where the documents are and what has happened to them after closing. If you are going to solve this frustrating problem, you have to embrace an electronic strategy that drives total transparency.
Q: When it comes right down to it, with any technology, adoption is the key to success. Why do you think Simplifile has gotten such great adoption in the past and how can lenders benefit from this?
NANCY ALLEY: I can’t stress enough the importance of meeting users where they already work every day. You have to start with the familiar, which means taking technology that is already in use and expanding the functionality. If you can do that, you can create a great value proposition that makes it easy for the user to take that next step. Our Collaboration and Post Closing services allow lenders and settlement agents to share, receive, and validate documents from time of application through delivery of final documents, and that’s a huge benefit. Delivering this benefit through an existing application that settlement agents, one way or another, are in every day streamlines their adoption; they don’t need new credentials to remember, and they don’t have to add or manage another vendor to start collaborating with their lenders.
The other key to broader industry adoption is offering both partners and customers options to work with you, and you need to appeal to all sizes and types of customers. Some users want a lights-out process, so you have to offer flexible integration options. Others are seeking a ready-to-go user interface while others may prefer a hybrid of both to help them meet the August 1 deadline and plan for the future. You have to work with everybody and make it easy for them to work with you, as well. It has long been the philosophy of Simplifile to work with organizations of all sizes and in the way they desire to interact with the system.
Q: Why does Simplifile think they can help the mortgage industry?
PAUL CLIFFORD: Simplifile has the relationships and adoption already in place. The concept and technology is proven. We also have the integration expertise to make it easy for the industry to realize the value of this process. When you compare Simplifile to others in this space, we have post-closing visibility, which really is a missing piece for other providers. It’s also a big deal that we are independent and have a multi-tenant system with a single login. There are clear advantages to having been a pioneer in this space because now we can offer all of those years of experience to the mortgage industry.
Q: What can we expect from Simplifile in 2015 and beyond?
PAUL CLIFFORD: At Simplifile we have become experts at translating many-to-many relationships with complex data requirements into a simple-to-use platform. We are excited to leverage our pervasive presence in the settlement space, so lenders can collaborate seamlessly through our agnostic platform; thus, creating a comfort that they will be compliant to all of the new regulations.
Going further, Simplifile will also be providing the lenders in the industry with their first real-time view of their trailing documents. That’s very important. We will make it possible for mortgage lenders to automatically have their trailing documents returned after closing through our post-closing offering. Just that piece alone solves a major industry pain point.
Also, Simplifile is working to help all of the counties in the country embrace electronic recording. We currently cover 70% of the population, and 33% of the counties nationwide. We are committed to having every county, no matter how big or small, integrated so that everyone in the industry may benefit from a comprehensive electronic network.
Ultimately, Simplifile will continue to innovate and offer services that make sense for the mortgage industry.
Paul Clifford thinks:
1. New Integrated Disclosures will pave the way for rapid adoption of fully electronic mortgage transactions.
2. Transparent collaboration and post close platforms with auditability will help revive the private mortgage investor market.
3. Smaller settlement companies will leverage technology to navigate the changes ahead.
Paul Clifford is President of Simplifile. As President, Paul manages all aspects of Simplifile’s corporate strategy. Recognized as an e-recording industry founder, Paul frequently presents at state and national industry trade shows and conferences. Prior to founding Simplifile, Paul served as the Director of Corporate and Strategic Planning for iLumin Corp., where he was responsible for researching, modeling, and creating strategic business plans and projects, including an automated mortgage transaction initiative for Freddie Mac and Fannie Mae.
Nancy Alley thinks:
1. There will be more confusion to come before there is any clarity.
2. Data standards are a big part of the solution for our space.
3. Electronic collaboration is required to conduct business.
Nancy Alley is VP, Strategic Planning at Simplifile. She brings more than 24 years of financial services and mortgage industry experience to her role as the Vice President of Strategic Planning at Simplifile. She has dedicated her career to driving innovation and leveraging technology in the mortgage industry. As a Co-Chair of the eMortgage workgroup at the Mortgage Industry Standards Maintenance Organization (MISMO), Nancy is actively involved in driving adoption of industry standards.