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Talking Digital Mortgages

There is renewed interest in the digital mortgage, but most LOS players aren’t ready. “When considered in the light of the pressing demand for digital mortgage capabilities, the areas in which today’s originations systems fall short become even more glaring,” noted STRATMOR Group Senior Partner Garth Graham. “When STRATMOR is consulting with clients – typically within the context of reengineering or establishing new origination platforms – we work toward implementing specific digital mortgage functional capabilities organized primarily around sales and fulfillment processes. Very few can currently be found in a commercial, off-the-shelf LOS.” So, we took Garth at his word and instead turned to an expert document provider to dissect the best way for lenders to embrace the digital mortgage. Here’s what Jonathan Kunkle, General Manager of LenderLive Document Services, told us about this and other hot industry topics:

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Q: Why did you first decide to enter the mortgage space?

JONATHAN KUNKLE: Funny question… I think the mortgage industry chooses us, not the other way around. (Did you not hear the giant sucking sound when it captured you, as well?) I was recruited into the industry from another field by the President of Guardian Mortgage Documents. My first role at Guardian was in sales, and I loved it from day one. At first, I didn’t speak mortgage; in fact, in my first meeting I wrote down three pages of acronyms I didn’t understand.

Q: How has the mortgage industry changed since you first got into the business?

JONATHAN KUNKLE: The Internet was relatively new when I started at Guardian and we’d just deployed one of the industry’s first web-based applications. It was technically sophisticated then, but technology has evolved so quickly that today’s software is light years ahead of where we started. In fact, I remember getting my first Blackberry, moving from analog to digital cellular mobile service, and dual computer monitors (the biggest technological leap in mortgage, according to Garth Graham at STRATMOR Group.) Obviously, technology has had a significant impact on lending and servicing. Today, we’re closer to the reality of digital mortgages and all things ‘e’, aka paperless. What I find most interesting is that the advent of technology has not driven down the costs of originating a mortgage or servicing a loan. Maybe, a better way to look at the lack of cost savings afforded by technology would be to consider that the fully-loaded cost of compliance and regulation is actually an offset to the cost savings that technology actually afforded the industry. Imagine the cost to originate a loan today if we didn’t have the efficiencies these technologies have afforded the industry to date.

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Q: How do you define digital mortgages?

JONATHAN KUNKLE: This is a great question, because in my mind the definition isn’t very clear across the industry. I think of a digital mortgage as one that is data-enabled. Data enablement or enrichment starts at origination, through a digital, borrower online application. This digital application needs to empower the process through digital data gathering (e.g., Yodlee, Plaid, Intuit, etc.), use the data for analysis, and only push exceptions to a human. A digital mortgage should interact with the consumer digitally: eSignature of the intent to proceed, eSignature of the loan estimate disclosures, and scheduling and follow up through the web interface, text, or other means of the consumer-selected communication path. Then the digital mortgage should be seamlessly processed, underwritten, and closed with minimal human interaction because the entire process is data enriched. Moreover, as more and more counties adopt digital notary acknowledgements, a true digital mortgage should be able to be executed as simply as an auto loan is executed today.

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Q: What are the benefits of offering a digital mortgage?

JONATHAN KUNKLE: First and foremost, the consumer demand for the mortgage loan buying experience is shifting to digital (queue the Millennials). Even though it may be the most important financial decision of someone’s life, the advent of technology allows for a personal, guided experience online. The lender should not lose sight of a critical point: when the borrower needs guidance, a human loan officer is a must-have component of that buying experience.

Steep cost reductions are another benefit: producing and manufacturing a digital mortgage should be a fraction of a traditionally originated, processed, underwritten, and closed loan. Why? Because it’s much more data-centric and less human-centric, thanks to automated decision making. Loans of the past required a human to make the cognitive decisions. With a data-enriched process, the human can focus only on exceptions.

And finally, a digitally executed mortgage has considerable benefits to the lender.  For example, a recent MBA study showed lenders save $1000 or more when closing loans digitally.

Q: What key hurdles still need to be cleared before the industry can go fully digital? For instance, Fannie and Freddie issued a survey identifying the lack of readiness from servicers, document providers, custodians and title/settlement agents as a key challenge.

JONATHAN KUNKLE: There are a still quite few hurdles for eMortgages, but I wouldn’t put the vendors in the mix of impediments. For example, our firm is ready for eMortgages today. The challenges are:

>>State and county adoption of digital notary.

>>Permissibility of eSignature on the SSA 89 form.

>>Investor readiness (and willingness) to buy digitally closed loans.

>>Warehouse line readiness to fund digital loans and take interim ownership of an eNote.

>>Adoption industrywide of the readily available eVaults. I know many lenders are anxious to start closing all loans digitally and many servicers are already onboarding loans with eNotes.

>>Title adoption of augmenting the closing package with eSign-enabled title documents.

Q: In building digital mortgages, what other considerations should lenders be thinking about?

JONATHAN KUNKLE: Regarding the digital front end, here are some critical thoughts:

>>Does the application process let the consumer pause and come back at any point in the future (without restarting the entire process)?

>>Are the connections to data sources (asset, income, collateral) capable of collecting data and images and both?

>>When the consumer opts out of data collection protocols, does it support image or document upload of the needed source doc?

>>What are the security features – does it support multiple authentication means and/or two factor?

>>Does it support home equity (HELOCs) through a more limited, TRID-free application process?

>>Can it seamlessly integrate to your product and pricing engine?

Is there a means to accurately estimate closing fees (i.e. accurate LE/CD production)?

>>Does it provide a means to communicate with the consumer in their chosen means?

Is it mobile enabled?

>>Does your consumer prefer an app or a mobile-enabled solution?

>>Does it interact with the AUS or does that remain in the LOS?

>>How does it drive a seamless workflow and can exceptions and escalations be routed back to the consumer?

>>Can it enable a compliant preapproval for purchase transactions?

Will the digital experience interact with your compliance service or does that remain in the LOS or doc service?

>>Does it integrate to your chosen eSignature application so that the borrower experience is the same throughout the entire process, including the loan closing?

>>What is the lender’s strategy to drive traffic, retain the applicant, and close the loan (i.e. Quicken’s Rocket Mortgage advertising)?

Q: What role does technology play in creating a digital mortgage experience?

JONATHAN KUNKLE: It doesn’t. Kidding… The technology will determine if the borrower can stay on the rocket path or exit to the self-propelled scooter circa 1950. Seriously, technology and digitization are totally transforming the mortgage experience.

Q: Where is LenderLive headed in the digital mortgage space?

JONATHAN KUNKLE: As a private label mortgage fulfillment provider, LenderLive needs to interact with multiple digital front ends. Our bank clients each have different strategies on consumer interaction and will choose a front end best suited for their strategy. Their consumer direct digital experience will also be critical to capture market share of the predominately purchase-driven market. As such, LenderLive is building a message layer to interact with the client’s selected front end. Moreover, LenderLive is preparing for the data-enriched process by enabling its back end processing to be free of the bondage tied to the traditional paper-based mortgage process.

Q: How is LenderLive freeing itself of that legacy process?

JONATHAN KUNKLE: We’ve invested heavily in our FACTCheck rules engine, that ingests source-of-truth data and runs complex rules and analysis on it to automate much of the cognitive thought process in the traditional mortgage. The FACTCheck solution in the market today is exclusively an income calculation tool, but we’ve already build asset and collateral valuation as well. The concept of FACTCheck is to take the available data, find normalcy in it, and then route exceptions for processing… but only when needed. We have proven that FACTCheck can eliminate 75% of the human processing needed if the origination channel is data enabled. This automation enablement will finally provide a technological lift in the cost of loan manufacturing.

Industry Predictions

Jonathan Kunkle thinks:

1.) There will be more than 1000 eNotes closed to date.

2.) Close a few dozen complete, end-to-end eMortgages in 2017 (with digitally signed and notarized security instruments)

3.) See multi-vendor-threaded versions of Fannie’s Day 1 Certainty and a Freddie version of the program.

Insider Profile

Jonathan Kunkle is general manager of LenderLive Document Services, one of the business lines of LenderLive Services, LLC. As a trusted premier services provider, LenderLive partners with financial companies to transform their day-to-day operations by delivering services and solutions that improve efficiencies, reduce operational errors, and mitigate compliance risk. In this role, he is responsible for client relations and the overall strategy of the company’s Document Services line of business, as well as their sales and client integrations. Kunkle has more than 25 years of experience in senior management roles, with 14 years in the mortgage industry. He joined LenderLive as vice president of sales in 2008 when the company purchased Guardian Mortgage Documents. There, he was responsible for all of the company’s sales initiatives.

Progress In Lending
The Place For Thought Leaders And Visionaries

Follow The Leader

I have been critical of the industry’s inability to move forward on eMortgages, or what is now called a Digital Mortgage, without other lenders going first. Today there is great buzz around going digital so I’m shifting my earlier concerns. To every lender today I say: Please follow the leader and go digital. My hope is that we have reached a tipping point where not going digital is more of a risk compared to finally making that transition to digital mortgages.

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In order for lenders to make this transition there first has to be clarity around the term Digital Mortgage. “There is still quite a bit of confusion in the marketplace as to what a digital mortgage is actually comprised of,” noted Dominic Iannitti, President and CEO at DocMagic, Inc. “Put simply, a truly comprehensive digital mortgage involves zero paper whatsoever, from start-to-finish. That means from the time the loan is originated at the point-of-sale to when the loan is closed and the eNote is delivered to the investor, nothing is papered-out. This includes fully paperless eClosings for borrowers, which absolutely must contain eNotarizations. Also, another important component of the digital mortgage process is an integrated mobile strategy.”

Recently DocMagic, Inc. completed North Carolina’s first 100 percent paperless eClosing. The DocMagic-driven eClosing was completed on Friday, May 5th at North State Bank and was carried out in the presence of borrowers Jason and Karen Boccardi, the North Carolina Secretary of State, a closing paralegal, an eNotary, and members of the media who documented the historical event.

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Attorneys from the Hunoval Law firm attended via interactive video. The entire eClosing took only about 20 minutes to complete.

“Millennials in particular want the ability to start the origination process on a phone/tablet, check status, eSign documents and complete the closing process,” added Iannitti. “That technology needs to be integrated with the document preparation provider, eClose technology vendor, LOS, as well as other third party vendors.”

DocMagic’s Total eClose, which contains all the components to facilitate a fully compliant, 100 percent paperless digital closing, served as the single platform that enabled the entire transaction in North Carolina. eNotarization was facilitated by long-time DocMagic strategic partner World Wide Notary (WWN).

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In fact, DocMagic facilitated four of the five statewide-first eClosings, as well as the CFPB’s eClosing pilot program. The North Carolina eClosing was part of a state sponsored eClosing Pilot Program that was established in 2016 by North Carolina Secretary of State Elaine F. Marshall to create a best practices guide for mortgage lenders seeking the heightened security, speed and efficiency of eClosings.

“For the record, a comprehensive digital mortgage is really just a new term for an end-to-end eMortgage process,” stated Iannitti. “The reality is that most of the digital mortgage technologies that are currently available for lenders are hybrids, so paper is unfortunately still involved. However, the technology to go fully digital is here today. The biggest hurdle is still educating all the players on the benefits, the technology solution exist today. The CFPB was very helpful in evangelizing for lenders and vendors to embrace eClosings, which is now well on its way.”

Valerie Saunders, Vice President at NAMB – The Association of Mortgage Professionals and President at Title ClearingHouse of Jacksonville, agrees that a digital mortgage is a mortgage that is transacted 100% electronically, including digital signing and electronic notarization, with no semblance of paper, whatsoever. And while there is still jockeying among some over the definition of the term Digital Mortgage, nobody disputes the return on investment associated with adoption.

“Digital mortgages are a lot faster and more efficient than traditional mortgages,” pointed out Saunders. “It’s also a lot easier for lenders and settlement service providers to manage and keep mortgage files secure without all that paper.

“As far as the consumer goes, paperless mortgages allow more time for borrowers to review the documents they’re executing prior to affixing a signature. In a typical transaction, unless the borrower specifically requests it, the first time they’re seeing those documents is when they’re at the closing table. With a digital mortgage, borrowers can take the time to digest the information and ask questions well in advance of closing.”

That doesn’t mean that there are no hurdles to adoption. “I think the major hurdles are cost and necessity,” noted Saunders. “We need to remember the role that states and counties play in electronic mortgages. In order to transact a fully paperless mortgage, states need to allow for both electronic recordings and electronic notarizations, and counties need to be technologically equipped to accept those electronic documents.

“Technology is the foundation of a digital mortgage, so it plays a major role in how that experience is going to play out. That said, lenders and settlement service providers also play a key role in assuring that the digital mortgage experience doesn’t replace a personalized experience.”

Put simply, the digital mortgage is about the customer interaction. “Customers will interact how they want on their timetable,” noted Josh Friend, the founder and CEO of InSellerate, a Costa Mesa, California-based CRM provider that helps companies maximize their sales leads and convert them into closed customers. “The second part of the digital mortgage is the use of big data. Tax returns, pay stubs, w2s, etc. is all in the cloud. You need to leverage platforms so that documentation can be downloaded through the web without the borrower having to provide that. Third, is the technology required to take in and process all the loan data. You want to make the mortgage process easier.”

InSellerate is a specialized customer relationship management system that delivers incremental sales and revenue by optimizing consumer direct lead channels, increasing prospect conversion and maximizing sales opportunities through an automated nurture program. With InSellerate, companies can immediately connect to leads while the prospects are actively in the decision-making process, manage their sales team real-time for maximum efficiency and ROI, and build strong customer relationships through trigger-automated nurture marketing campaigns. InSellerate is SSAE 16 certified and built to satisfy the most closely regulated businesses, including community banks with mortgage subsidiaries.

“The cost to originate has increased,” noted Friend. “Having accurate closing fees upfront will allow us to be more accurate at closing. The digital mortgage will also lower buybacks significantly. From the view of the consumer, if they can go online, see accurate pricing, fill out the documents and submit the trailing documents online, that would be a big benefit.”

So what will it take for digital mortgages to finally go mainstream? “You need to tie the business and technology together,” concluded Dr. Rick Roque, President and Founder of MENLO, a firm that advises mortgage lenders on their M&A strategies. “You have solid technology, but there are failures in how to apply that to the business process. It takes a unique intersection in how the business process can be designed and reimagined with the use of technology.

“Lenders have to look at the net tangible benefit. Lenders may go after the latest technology, but don’t look at how it can be operationalized. A digital mortgage is not a switch that just gets flipped. It’s a progression.”

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

What’s A Digital Mortgage, Really?

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Every mortgage publication these days either has an article about, a quote mentioning, or an advertisement declaiming the virtues of digital mortgage lending. For the moment, abandon all logic and surrender to the hype. This might have you believe offering digital mortgages will make you younger, leaner and more attractive to today’s borrower.

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While some of this coverage is certainly hype, it is a reality that today’s borrowers want the true digital mortgage. This was confirmed in a recent study of actual borrowers commissioned by Mortgage Cadence and conducted by Accenture Research. The study found that the old-fashioned analog mortgage is too inconvenient and too cumbersome for borrowers’ busy lives.

This is especially true if the future homeowner already has a relationship with you. As they see it, you know everything about them already, so why the constant requests for information about this asset or that particular liability? In the borrower’s view, you should know that, or, at the very least, be able to figure it out.

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While some of the coverage is certainly hype, it is a reality that today’s borrowers want the true digital mortgage.

The truth is, borrowers really don’t understand, nor do they want to understand, why getting a mortgage loan is any harder than a $20 withdrawal from their nearest ATM.

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Borrowers live in a digital, connected world. They want their lender to move into their neighborhood, so to speak. While we all know the digital mortgage is important, do we really know what the digital mortgage really is — and should be?

The Digital Mortgage: a Mythical Creature

Choose your favorite mythical creature. The unicorn? That works. Abominable snowman? OK. Loch Ness Monster? Sure, why not. The digital mortgage is almost as elusive precisely because there’s no actual Oxford English Dictionary definition. Sure, there are many concepts and ideas the industry holds, though there’s no authoritative definition.. A first step in dealing with the digital mortgage is to reach agreement on what it really is.

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The true digital mortgage exists nowhere physically. It lives entirely in the ether. A collection of electrons that come together at exactly the right time to form a complete mortgage that, on screen, looks exactly like its paper-file counterpart. The difference between it and a traditional mortgage is that the digital mortgage will never take up actual space, nor will an old-fashioned pen ever be used to sign it. No courier ever move it from one place to another and back again: It is digital from start to finish.

In a true digital mortgage, borrowers begin the process by submitting their application online. Their lender picks up the digital application, ideally after their system has performed tasks appropriate to the borrowers’ situation, quickly taking actions that move the mortgage as close as possible to closing. Closing takes place in a virtual signing room using an eNotary. Delivery of the loan file to investors, or back to the lender, takes place through the wonders of the Internet. Voila! A true digital mortgage is now complete and has moved electronically into its home in the servicing system where it will live out its life, hopefully peacefully.

More like an ATM Transaction, Less Like the DMV

The truth is, borrowers really don’t understand, nor do they want to understand, why getting a mortgage loan is any harder than a $20 withdrawal from their nearest ATM. Their lives are busy, working and getting kids from school to sports, to dinner, to homework, then back again, day in and day out. The mortgage represents a long list of things to do – things that get in the way of the more important things they have to do every day.

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A true digital mortgage is more than an app or applet that collects some (although not enough) borrower information to act upon.

For many borrowers, the traditional mortgage process feels like a trip to the DMV, only longer. But this does not have to be the case.

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To most borrowers, getting through the mortgage process feels a lot like getting a new driver’s license in a new state. Think about the average homeowner aged 18 – 54: he or she has been driving for a number of years and may have a ticket or two, though generally the individual’s record is more than acceptable. This person moves to a new state and needs a new driver’s license, so he or she heads to the department of motor vehicles (DMV). There, the newcomer takes a number — usually 1,291 when the digital ‘now serving’ sign (the only digital device in the place) has been aggravatingly sitting on 47 for about 37.5 minutes. It’s going to be a long day.

This painful analogy is actually quite appropriate to the mortgage experience. Driving records are, or should be, available state-to-state electronically. Why would a state want to torture a new resident with a byzantine process to get a new version of what they already have? This is unnecessary in an increasingly online and on-demand world.

For many borrowers, the traditional mortgage process feels like a trip to the DMV, only longer. But this does not have to be the case. The true digital mortgage, unlike the Abominable Snowman, can be made real and is within our grasp, using technology that exists today. All lenders have to do is make the big commitment: No more paper. No more paper in the mortgage process, anywhere, any time.

The Digital Mortgage Incentive

Keep this in mind: The absence of paper is its own reward.

We have been in the digital mortgage business for more than seventeen years, spanning three decades of mortgage lending. Digital, in fact, is the reason we are in business at all. We could see, in 1999, the challenges both lenders and borrowers faced on a daily basis. We could also see the promise of the Internet, and, through a somewhat cloudy crystal ball, the coming technologies that could and would change this industry for the better.

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In 2008, we closed the first true digital mortgage using those technologies. The process started with a simple yet bold commitment to entirely banishing paper –including physical loan files in all their forms — from the mortgage process once and for all. It was a bold step and more than a little scary for everyone involved. Almost ten years later it turns out that the only thing we had to fear was fear itself.

The absence of paper is indeed its own reward. Think about it: ten years of no physical loan files. For most of us in mortgage production it would be an easy thing to forget about loan files past. Our CFOs don’t forget, however, as storing files is expensive, and the cost mounts with each closed loan and every passing year. Our information security officers think about them, too. Early in the evolution of the digital mortgage everyone worried about borrower information flowing electronically on the internet. Then a funny thing happened as eCommerce took over. Now everyone conducts business online, and, as this was happening, eSecurity became better and better. Now we take it for granted. E-security is a lot of work, but it is more reliable than actual security guards who can’t possibly keep an eye on every loan file in every warehouse. In this case, paper and physical files represent risk and impose a penalty upon those who use them.

The excuse that digital mortgage lending is expensive is just that, an excuse. Traditional, paper mortgage lending is very expensive, and the cost grows year over year, as relying on outmoded processes and human beings to follow increasingly complex lending rules takes more and more time, and more and more people.

If you need proof, simply look at the trend in the costs of mortgage production, published quarterly and annually by the Mortgage Bankers Association. It cost $7,120 to close a loan in the second quarter of 2016, which is significantly up from less than $3,600 when the first digital mortgage closed in 2008. On average, more than 50% of the cost to close is labor. As productivity drops, the cost to close a loan rises. The cost of technology, on the other hand, has held steady between 5% and 10% of the cost to close. The cost of that technology is the same technology that will close a true digital mortgage. Technology is the lender’s great financial ally in this equation. When used as intended, technology increases productivity and drives down the cost to close. It is also the gateway to the mortgage experience that borrowers have told us they want from their lender.

Eliminating paper, investing in technology, and embracing the process revolution is the path to realizing a true digital mortgage in your lending practice. When you get away from paper, your lending solutions can be data-centric, and from there you can support your staff with workflow, validations, logic, and integrations. Your lending practices and portfolios can then be transparent, your compliance streamlined, and your overall cost of doing business reduced. Let the technology do the hard work and empower your people to lend.

You Will Never See a Unicorn

In all likelihood, you will never see a unicorn, or a yeti. But some have seen a true digital mortgage using our technologies, one that begins its life online with a borrower self-originating, gets electronically handed off to the processor, underwriter, closer, funder, investor and servicer, and spends the rest of its life as a collection of electrons in a digital vault with a bunch of other mortgages.

A true digital mortgage is more than an app or applet that collects some (although not enough) borrower information to act upon. Nor is it a hand-off to another system. That is so early 2000s. Today’s true digital mortgage gives borrowers pretty much what they want and need: an ATM transaction-like gateway to their new home, without a lot of their precious time or energy invested in the lender’s processes. These are processes, which we, as an industry, can and should abandon – just like we should abandon paper.

About The Author

Jim Rosen
Jim Rosen is Document Center Product Manager for Mortgage Cadence, an Accenture Company. As the Document Center Product Manager for Mortgage Cadence, Jim Rosen oversees a team of seasoned professionals, offering dynamic document preparation services to lenders on the Mortgage Cadence platforms and independent, directly integrated lenders across the lending spectrum. The Document Center solution supports automated, compliant document preparation for residential mortgage origination customers throughout the mortgage lifecycle. Additionally, the Document Center extends document preparation to include distribution, electronic signature and e-closing integrations that enhance and drive efficient processes for mortgage lenders. Jim holds a bachelor’s degree from the University of Colorado and has served in various capacities in the mortgage services industry for over 17 years with particular depth and experience around residential mortgage document preparation.

Black Knight Adds New Digital Framework

LoanSphere Empower, a loan origination system (LOS) from Black Knight Financial Services, Inc., now features a new, easy-to-use Representational State Transfer Application Program Interface (REST API) framework that enables lenders to provide digital capabilities to consumers and loan officers with the ability to interact with Empower data and other LOS capabilities from internet-enabled devices, such as tablets, smartphones or laptops, without needing to directly access the LOS. This framework enables lenders to perform many functions from their digital devices:

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>> Read, add or update data within the LOS

>> Perform various operations, such as uploading borrower information to the Empower system to create a loan application file

>> Request credit or trigger other third-party services

>> View loan documents

>> Check the loan application’s status and outstanding loan conditions

“Going digital is the future of the mortgage industry,” said Jerry Halbrook, president of Black Knight’s Origination Technologies and Enterprise Business Intelligence divisions. “By seamlessly integrating this innovative interface with our Empower LOS technology, Black Knight is helping lenders transform the consumer experience and facilitating easier access to leading system resources and data.”

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Empower’s LOS data and its various capabilities, such as pricing and document management, are now available to the lender’s digital platforms through the use of APIs that support interoperability between web-based computer systems, and form the backbone of any digital mortgage strategy. These APIs are integrated in Empower, which allows lenders to leverage all the controls they have established in the LOS, rather than setting up and managing controls separately. Clients can choose to access APIs developed by Black Knight or request Black Knight to configure the lenders’ APIs specifically for their unique needs.

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“Incorporating the REST API technology into Empower is the first step in our digital strategy to help our clients deliver a digitized loan origination process,” Halbrook added. “We are leveraging digital technology to benefit both lenders and consumers with a simpler, more transparent loan process that can be completed significantly faster at less cost.”

Empower’s digital interface capability is complemented by other Black Knight value-added offerings included in the LOS. With Empower, lenders can gain access to Black Knight’s Data & Analytics, Data Hub and Motivity Solutions, which provide comprehensive business intelligence and near real-time access to information from multiple data sources to help forecast and monitor performance. Empower also includes e-delivery and e-signing capabilities, as well as integrations to Black Knight’s LoanSphere Exchange, offering access to the largest online network of settlement service providers in the U.S.; Black Knight’s comprehensive public records database; borrower asset and income information; and digital technology, without the need for separate “toolkits.”

Additionally, lenders can take advantage of Empower’s seamless integration with Black Knight’s LoanSphere MSP servicing platform, used to service more than 30 million active loans for many of the nation’s largest financial institutions and is scalable to any size portfolio.

Progress In Lending
The Place For Thought Leaders And Visionaries

Innovative New Player Raises $2.25M In Seed Funding

The Digital Mortgage is all the talk. The definition of Digital Mortgage varies, but what every lender really wants and needs at a minimum is a fully digital point-of-sale. One of the newer players in this space making a lot of waves is MortgageHippo, Inc. And to this end, this vendor has announced today that it has raised approximately $2.25 million in seed capital. The round was led by CMFG Ventures, LLC, the venture capital entity of CUNA Mutual Group.

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“These are very exciting times for technology companies in the mortgage sector, as lenders of all types and sizes fully embrace the digital transformation sweeping through the industry,” said Michael Salichs, co-founder and President of MortgageHippo. “Several market forces over the last couple of years have pushed the mortgage industry towards digital innovation and MortgageHippo is helping lenders with the transition.”

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Among those market forces is the arrival of Millennials into the housing market, support by the GSEs of digital technology in loan underwriting and the launch and heavy marketing of digital mortgage platforms by a handful of prominent lenders.

“The mortgage process can be cumbersome, leading to decreased customer satisfaction, inefficiency and higher origination costs,” said Brian Kaas, President and Managing Director of CMFG Ventures. “Our investment in MortgageHippo will bring new innovation to the digital mortgage experience that can help credit unions deliver a superior online mortgage experience to their members in a way they prefer to engage in the process.”

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Since launching its digital mortgage platform – known as SwiftDLP™ – as a white-label solution, MortgageHippo has signed several top national and regional lenders and brokers who use the platform to deliver a modern borrowing experience to their customers and increase their conversions. “We are very excited about CMFG Ventures’ investment in our company and the strategic value and familiarity with the credit union market they bring to the table,” said Valentin Saportas, co-founder and CEO of MortgageHippo.

The company will use the funds primarily to further expand its software development and sales team. For more information, visit the MortgageHippo or CMFG Ventures website.

MortgageHippo raised an initial seed round of $750,000 in January 2016 led by the venture arm of real estate brokerage, @properties. Today’s announcement marks the official close to their seed round with an additional $1.5 million.

About The Author

Tony Garritano
Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Are LOS Companies Ready For The Digital Mortgage?

As the industry prepares to gather for the upcoming MBA National Technology Conference in Chicago, STRATMOR Senior Partner Garth Graham presents an analysis of two years of Technology Insights Survey results data to assess the readiness of the current loan origination system (LOS) landscape for the coming age of the Digital Mortgage.

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“When looking at STRATMOR Technology Insight Survey results data, we see lackluster satisfaction with LOSs,” said Graham. “That’s not surprising – it’s old news. But when considered in the light of the pressing demand for digital mortgage capabilities, the areas in which today’s originations systems fall short become even more glaring. When STRATMOR is consulting with clients – typically within the context of reengineering or establishing new origination platforms – we work toward implementing specific digital mortgage functional capabilities organized primarily around sales and fulfillment processes.  Very few can currently be found in a commercial, off-the-shelf LOS. Rather, they’re most often specialized applications that need to be hooked up to the system. Where they are currently available, satisfaction levels pale even behind those of LOSs in general.

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“To be fair,” Graham continued, “the effectiveness of any LOS depends on both the system’s functional capabilities and the skill with which the system is deployed. Regardless of where the fault lies, LOS systems are not delivering what they could. This only becomes more pronounced when one considers the functional capabilities necessary for the digital mortgage process. In light of STRATMOR’s Technology Insight Survey data, technology vendors need to carefully consider where they are in the mortgage technology ecosystem, and how they will compete in the future, because the status quo as of today is insufficient. Likewise, lenders need to determine their current state of technology and from there, develop their own individual roadmap to the future.”

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The 2017 STRATMOR Technology Insight Survey launches the last week in March and will include expanded questions on LOS vendor support and lender opinions on cybersecurity. To participate, click here.

This month’s report also looks at MortgageSAT borrower satisfaction data to help quantify the relationship between certain practices related to the mortgage closing and levels of borrower satisfaction. Seemingly minor events – making contact with the borrower prior to closing, or having the closing begin on time as scheduled – can have a significant impact on borrower satisfaction. Among the majority of borrowers who are contacted prior to closing, for example, average satisfaction scores a 93 out of a possible 100. For the roughly eight percent of borrowers who are not contacted, satisfaction plunges to just 61, a 32-point differential. Likewise, for the 93 percent of borrowers whose closing starts on time satisfaction ranks a 92, as compared to a score of 76 for those whose closing started late.

Click here to download the March 2017 edition of STRATMOR Insights, and to sign up to receive the report each month, please click here.

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Progress In Lending
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NotaryCam’s eClose360 Tested And Approved By Fannie Mae

NotaryCam, Inc., a provider of online notary and mortgage eClosing services, is now listed on Fannie Mae’s list of eMortgage technology solution providers. Fannie Mae approved NotaryCam as a provider of both a SMARTDoc and eVault solution. Specifically, NotaryCam’s eClose360 online closing solution is now on the list of software Fannie Mae has certified and approved for use on loans it purchases from mortgage loan originators (Note: certification is for technical compliance with Fannie Mae’s eMortgage platform. Use of remote notarization capability is subject to Fannie Mae guidelines. Lenders should check with their Fannie Mae account team before utilizing remote notarization on Fannie Mae loans).

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“We are very proud to have made this important list of industry solutions for digital mortgage,” said Rick Triola, Founder and CEO of NotaryCam. “We’ve been working with portfolio lenders for some time, but now, any mortgage banker that sells its production to Fannie Mae can feel comfortable employing eClose360 and enjoy the benefits it offers them, their partners and consumers.”

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NotaryCam’s eClose360 is an online notary platform that allows mortgage closings to take place entirely online, removing all associated stress and the friction of having to attend closings physically. The technology won more attendee votes than any other digital mortgage technology in its category after its demonstration at the recent Digital Mortgage Conference in San Francisco. The company was invited to demo it again at the MBA’s Independent Mortgage Bankers conference on January 26, 2017.

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“Our research and experience indicates a growing interest and increasing number of lenders adopting eMortgages,” stated Michael Cafferky, eMortgage Product Manager, Fannie Mae. “Fannie Mae is committed to supporting customers and business partners as we move the market forward. We are very pleased to add NotaryCam to the list of approved solution providers to further expand options available to our customers to originate and deliver eMortgages to Fannie Mae.”

Fannie Mae’s eMortgage Technology Solution Provider List provides the industry with a selection of companies that offer technology solutions that enable the submission of electronic mortgages to Fannie Mae. Fannie Mae’s provisioning of the information does not indicate any endorsement of or affiliation with the listed providers, but rather includes technology providers who have conducted eNote technical compatibility testing with Fannie Mae’s eNote delivery system.

NotaryCam allows businesses and individuals to legally notarize, sign and execute documents and agreements online. The company has legally completed tens of thousands of notarizations in all 50 states and over 65 countries. Parties from anywhere in the world can connect to a live notary public in a secure virtual signing room. Identities and eSignatures are verified in a face-to-face web interaction to eClose real estate and mortgage transactions, notarize deeds, power of attorney, health directives, and more. NotaryCam was developed in lockstep with the changing needs of the GSEs to ensure that eClose360 meets all investor requirements. NotaryCam signing agents are also certified by the National Notary Association.

Progress In Lending
The Place For Thought Leaders And Visionaries