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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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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.

CoreLogic Looks To Offer A Digital Mortgage Experience

As the mortgage industry slowly marches forward to embrace a more digital mortgage process, CoreLogic has launched the integration of six key mortgage origination product offerings on the Tavant FinConnect Mortgage Data Integration Platform including: credit reports, flood determinations, 4506-T income verification, Automated Valuation Models, LoanSafe Fraud Manager, and LoanSafe Risk Manager.

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“With this launch, mortgage professionals now have a simple way to manage and access key CoreLogic product offerings all from one platform,” said Kevin Mullins, vice president, Business Development for CoreLogic. “This is a big step forward in what we expect to be a great relationship with Tavant.”

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Tavant FinConnect is an integration platform for mortgage-related data and services, providing secure integrations to value-added 3rd party vendors, including Fannie Mae Day 1 Certainty program designated vendors. FinConnect supplies on-demand data directly from the source enabling a simple end-to-end digital mortgage experience for the borrower. FinConnect uses open source components and adheres to MISMO standards across all integration paths in the Mortgage ecosystem.

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“Tavant FinConnect addresses the inefficiencies in the loan application and fulfillment lifecycle and enables lenders, servicers and their business partners to reimagine the home purchase and refinance experience,” said Mohammad Rashid, vice president, Consumer Lending practice for Tavant Technologies. “It provides the lender the most up-to-date data about the borrower directly from the source, resulting in a borrower experience that is seamless, touchless, transparent, and digital. CoreLogic is a premier source of critical borrower, loan and housing data and an essential component in this reimagined digital experience and we are excited to partner with them.”

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.

Integration Tries To Further Digital Mortgage Adoption

LOS PCLender has launched an enhanced integration with POS Blend. As a result of the partnership, lenders who work with PCLender will be able to easily deploy Blend’s platform creating an end-to-end digital mortgage experience that is geared to excite customers and streamline lender workflows while reducing risk and ensuring compliance. Blend’s technology integrates seamlessly with PCLender’s LOS to ensure rapid deployment and quick time to value while reducing the number of systems a lender must work in.

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“We’re dedicated to providing our customers with the industry’s top technology solutions, so teaming up with Blend was a natural next step,” said Lionel Urban, CEO of PCLender. “Blend’s platform is modernizing the mortgage lending experience and through this integration, we’re proud to enable our lenders to offer their customers a more compelling and efficient borrower experience.”

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The integration with Blend continues this legacy, linking PCLender’s total mortgage solution to Blend’s borrower and lender experiences powered by rules, direct-from-source validated data and audit logs. This integration is designed to provide consumers with a more end-to-end digital mortgage experience that is borrower-, lender-, and compliance-friendly.

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“At Blend, we’re building technology that reinvents home lending from the ground up,” said Nima Ghamsari, CEO & co-founder of Blend. “Built on a platform that integrates with existing systems, we’re thrilled to work with pioneering mortgage solutions providers like PCLender to create a digital mortgage ecosystem and enable fast, simple and satisfying lending experiences to millions of lenders and borrowers alike.”

Digital Mortgages Are Happening Today

The talk about digital mortgages is not just talk. It is going on today. For example, DocMagic Inc. has successfully completed the mortgage industrys first comprehensive eClosing in Massachusetts, which included both lender and closing/settlement agent documentation, for radius financial group, inc.

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Unlike other eClosing technologies, DocMagics Total eClose solution is a single-source platform that contains all of the components needed to facilitate a completely paperless digital closing.  Paramount to achieving the end-to-end eClosing was eNotarization services provided by strategic partner World Wide Notary (WWN).  Once the eClosing process begins, documents requiring notary acknowledgment are automatically grouped by the system and electronically executed in the presence of the notary. The entire process takes only minutes and can happen in the comfort of the borrowers home.

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“There are a few mortgage technology vendors that have been working to deliver an eClosing for some time now, but they have all fallen short in various ways,” said Dominic Iannitti, president and CEO of DocMagic. “Most of these solutions are merely hybrids that require certain documents to be executed on paper and often force lenders to maintain numerous complex integrations. With Total eClose, however, you work with a single vendor, on a single platform, and clients need only access DocMagic or the company’s SmartCLOSE system to seamlessly and compliantly fulfill a paperless closing.”

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DocMagic’s solution includes all of the critical components required to execute a fully digital eClosing transaction: its dynamic eDocument library that features eSignature, eNotary, and MERS eRegistration capabilities, and the system automatically stores all data and documents within a secure eVault designed to make investor eDelivery as simple as a few clicks. The single-source platform creates a highly-efficient, transparent and fully compliant eClosing process that guides users through every step, logs all activities and creates an irrefutable audit trail.  

Also key to DocMagic enabling radius’ first eClosing was the participation of Santander Bank, which served as the eWarehouse lender.  “In addition to having integrated eNotary capability, one of the last remaining obstacles to adoption has been the reluctance of warehouse players to fund eNotes,” said Tim Anderson, director of eServices at DocMagic.  “We helped test and implement an eWarehouse process to eDeliver acceptance of the eNote to Santander Bank within seconds after the eClosing was completed.  This is an industry-altering achievement.”

DocMagic maintains detailed evidence of TRID compliance from the original loan application and Loan Estimate (LE) to delivery of the final Closing Disclosure (CD) with data, compliance determinations, calculations and documents all stored within DocMagics eVault for proof of compliance.

Also notable is that in 2014, the Consumer Financial Protection Bureau (CFPB) selected DocMagic as one of only 12 participants in its eClosing pilot project that was created to explore the benefits of digital mortgage technology for consumers.  CFPB Director Richard Cordray determined the pilot to be a success and encouraged lenders to implement an eClosing strategy.  Since that time, DocMagic has worked to perfect its end-to-end eClosing solution.

DocMagic’s integration with World Wide Notary (WWN) is an exclusive partnership for eNotarizations.  Founded in 2003 and based in Vernon, Texas, WWN is the developer of DigaSign, a proven solution that enables efficient, electronic notarizations.

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.

The Dawn Of A New Day

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I like the term ‘digital mortgage’ because it really reflects the concept of data before documents. And I believe the term ‘e-mortgage’ has suffered from many misconceptions and that it is better to start fresh.

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I am one of Garth Graham’s biggest fans. Over the years I have attended many of his presentations and read most, if not all, of his published articles. I, like others, have been fascinated by his ability to portray the issues and solutions facing the industry in terms that we can easily understand. He is always spot on!

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An excerpt from his article, ‘The State of the Digital Mortgage’, in the July 2016 issue of STRATMOR Insights stated the following:

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Roughly 20 years ago today, I was part of a team that started mortgage.com based on a vision that we could build a better process online, a process that would be more transparent to the customer, lower cost and much more scalable and efficient. At the time, our focus was on:

>> Replacing much of the paper and documents demanded of borrowers with electronic capture of such documents from a variety of sources

>> Moving the loan advisory and selection process to a call center where loan officer functions could be delivered in a consistent, controlled fashion supported by online decision tools

And 20 years later, this vision may finally be in sight.

Graham defines digital mortgage as follows: “… the term ‘Digital Mortgage’ has evolved to mean much more than just improving or digitizing point-of-sale and fulfillment functions. This evolution is being fueled by overall technology trends, including the growth of smart phones, high-speed internet and big data, which are creating new ways for borrowers and lenders to interact at virtually all points of the mortgage loan life cycle. This interaction includes functions both upstream of taking an application (lead generation) and downstream of closing (loan servicing and retention).”

Graham believes there are three main features of the Digital Mortgage that lenders need to consider.

1.) Consumer Interaction. The Digital Mortgage must support consumer interaction on a level that was not imagined even ten years ago. This is more than a passing nod to our current technology trends. It is an acknowledgement that on-demand consumer communication, and thus consumer engagement, is now the norm.

2.) Automated data verification. The Digital Mortgage must divorce itself from the concept of documents—dated snapshots of data, varying in format and layout, in favor of the data itself. As Graham points out, the data to process loans “is all we ever wanted in the first place.” Take a moment to consider all the operational processes that have been created to manage the inherent problems of paper documents. They all disappear with the Digital Mortgage.

3.) Predicative lead generation. The Digital Mortgage, by definition, depends on a big data strategy and creates a data pool of millions of U.S. mortgages. Rather than archive and warehouse that data, lenders can use it to develop sales and marketing strategies for specific targets that are best prospects for mortgage products and services.

Graham concludes with the following. “We see, therefore, that the Digital Mortgage is about harnessing data and technology to generate better leads more efficiently, improving the ability of Loan Officers to provide borrowers with sound advice, eliminating the paper-based gathering of processing and underwriting data and replacing it with direct electronic feeds from credible data sources and interacting with both prospective and existing borrowers in virtually any way they want at virtually every point in the mortgage loan life-cycle. Innovation and leadership are not always about doing something totally different. It’s sometimes just enough to recognize the inevitable and get out in front of it. I believe this view totally applies to the Digital Mortgage. Lenders that accept its inevitability and become early-implementers will competitively thrive. Lenders that don’t will lose their competitiveness and decline.”

Night is darkest just before the dawn. Twenty-five years ago the Mortgage Banking Magazine cover story was Technology: More systems, less paper. By the way, that was the year the internet was made available for commercial purposes. Back then the solution for paperless was to create the paper documents but scan the images. Later, we transitioned to the use of PDF files. But they were still static images of documents, or more importantly, the data that we need to do business.

In the early days of MISMO, as we were developing the data dictionary, we all had a future vision of the paperless mortgage and the term e-mortgages became part of our vocabulary. I remember when the GSEs first proposed the SMART eNote where the document and related data were bound together with the ability to link and validate the data. It was a response to the lost note, where the original could not be located. It certainly was a major discussion topic and some of us felt it needed to be more thoroughly vetted. The concept was thoughtful. The major problem was that this format was a one-off from the rest of the loan documents and required this document to be handled differently throughout the process. It still is a problem today. But that’s history. Let’s look forward.

I really like Graham’s comments: “Innovation and leadership are not always about doing something totally different. It’s sometimes just enough to recognize the inevitable and get out in front of it. Lenders that accept its inevitability and become early-implementers will competitively thrive. Lenders that don’t will lose their competitiveness and decline.”

So let’s examine this from the lender’s perspective. The digital mortgage has the potential to really change the loan process by having data be the driver. It may drastically change the way you do business. You need to step back and take a holistic view of your entire operation. Is your current technology solution capable of this endeavor? Whether in-house or provided by an outside vendor, this is not an easy question to answer. Will you be an early implementer?

There is probably no bigger challenge for the lender than the interaction to the consumer. The problem is that it will be different depending on the age of the consumer. The millennials are all mobile while the older generations prefer something they can hold and read. They will need to connect with their consumer in a multitude of ways.

The days of sending Verifications of Deposit and Employment are long gone. That process is automated with data uploads, eliminating the time, expense, and risk associated with re-keying data. Appraisals are also automated. By eliminating paper, we significantly reduce processing errors.

But probably the biggest unknown for the digital mortgage is the potential for data analytics to really change the industry. Imagine what that could entail.

What if you could go back and analyze the loan after foreclosure? What if you could determine if there was something you missed or didn’t evaluate properly? You could correct that and make changes to your current process. Sometime loans fail for unforeseen circumstances, like loss of employment or medical issues, but those are beyond your control. One of the problems some lenders faced during the re-fi boom was the inability of the servicing side to connect to the production side and take advantage of the consumer data. The digital mortgage could make such a bridge possible.

The mortgage industry has always been slow to adapt new technology to its processes and more than that, to evolve its processes to take advantage of technology innovations. There are a number of factors to blame, including costs, real and perceived, and the potential process disruptions, real and perceived. Maybe the highest hurdle to overcome is the perception that while current processes aren’t great, they are good enough for now and will continue to be good enough until painful, wide-scale change is forced on the industry as a whole. Will you be an early implementer?

About The Author

Roger Gudobba

Roger Gudobba is passionate about the importance of quality data and its role in improving the mortgage process. He is an industry thought leader and chief executive officer at PROGRESS in Lending Association. Roger has over 30 years of mortgage experience and an active participant in the Mortgage Industry Standards Maintenance Organization (MISMO) for 17 years. He was a Mortgage Banking Technology All-Star in 2005. He was the recipient of Mortgage Technology Magazine’s Steve Fraser Visionary Award in 2004 and the Lasting Impact Award in 2008. Roger can be reached at rgudobba@compliancesystems.com.

Pixelation Nation

Digital photography was invented 43 years ago. Today, we have grown so accustomed to taking photos with digital cameras – including our cell phones – that we no longer think twice about this technology. Sure, most of us grew up taking rolls of film to the store to be developed, but would you really trade the immediacy we have today for film? For most of us, the answer is “no way.”

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The all-digital mortgage is similar to digital photography. It has gone from being a novel concept – something for lenders to strive for – to being something we hear about all the time. The need for all-digital-everything in mortgages has been driven by a number of considerations, including consumer demand for more timely and efficient interactions, complex compliance requirements, and a need to expedite lending activities. Non-bank lenders add to this mix with non-traditional lending practices and different risk profiles, creating a hyper-competitive lending environment.

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In light of all of these factors, tack-on solutions or limited technology that only supports digital disclosures is just no longer going to cut it. As we adapt to the needs of today’s borrowers, we believe that embracing the all-digital mortgage experience is the best option for lenders to ensure that they have a lending platform that will support their future activities. Just as camera film has become all but obsolete, so too will be paper-based mortgage processes. Here’s how you can ensure you are at the forefront of this part of our digital revolution.

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As mentioned, digital disclosures have long been an accepted first step in the digital revolution. Electronic signatures on early and upfront disclosures carried low risk and were simply implemented, and the options and flavors of eSign are numerous. However, lenders are realizing – and consumers are demanding – that you can’t just offer digital disclosures and then revert to paper for closing to realize the benefits of the digital mortgage.

There are two reasons for this. First, because of increased regulations that require compliance checks and procedural validations, lenders today automatically face higher costs per loan. And while increased costs can be mitigated with procedure redesign and staff training, lenders can only retrain so much without having to rely on technology to go further. Second, many of today’s mortgage borrowers seek automated, efficient financial solutions that they can control at the time and place of their choosing. While digitizing disclosures is a great start, today’s borrowers demand more and will go where they can find that all-digital experience.

That brings us to eClosing. The digital camera revolution took nearly fifteen years after its invention before consumers had a viable product they could buy. Similarly, the industry “standard” over the past decade for eClosing required lenders and platforms to dig deep. Their options included:

>> Investing in product or platform development or in a deep technology integration that had little to no general application to the process

>> Engaging in relationship-building and process validation with MERS and with Fannie Mae

>> Building, buying, or partnering with a solution that generates a complex technical version of the note, and acquiring an electronic vault in which to keep the records.

In the cold calculus of cost/benefit, lenders often could not make the conversion-to-payoff based on the large investment required. Costs to implement and maintain could not justify the potential or perceived benefits in consumer efficiency and/or backend reductions in cost, time, or processes. Faced with these tack-on approaches, many lenders waited for better options to come along.

Fortunately, just as digital cameras now are ubiquitous, all-encompassing digital mortgage solutions have proliferated, as well. Digital experts in the financial services industry have begun banding together to create fully-integrated solutions for lenders of all sizes. Lenders can now adopt the complex underlying technology for eNotes without the heavy investment in research, development, or infrastructure. With the availability of these solutions, consumers will begin demanding all-digital mortgages exclusively. Paper-based mortgage processes, while already on the way out, will hopefully become completely obsolete.

That brings us to the key question for lenders: Where are you on your digital mortgage journey? The movers and shakers in the industry are already providing borrowers with an all-digital mortgage origination experience. Taking the next step today can help meet borrower demand tomorrow.

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.

Lender Launches Doc-Less Mortgage Movement

United Wholesale Mortgage (UWM) is moving forward with its “go doc-less” movement, introducing an automated suite of tools that bypass submitting hard copies of documentation needed for loan approval. Following an automated income verification tool that was released less than one month ago, this latest platform includes automated asset verification and tax returns, further enhancing the doc-less loan experience provided by UWM.

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UWM’s line of doc-less technology is a revolution being put into effect by the nation’s No. 1 wholesale lender, aimed at creating a greener, hassle-free process for brokers to make sure their borrowers no longer need to chase down pay stubs, tax returns, or bank statements. All of that will be done behind the scenes and verified by UWM. It is a system that seamlessly and securely links to existing databases to automatically verify income, assets and tax returns.

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“We’re taking a big step forward by introducing an automated verification technology in order to make the lending process faster and easier for brokers and their borrowers,” said Mat Ishbia, President and CEO of UWM.

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“Borrowers do their banking online, file tax forms online and have direct deposit so the mortgage process should be a doc-less process as well, and UWM is proud to lead the way.”

The doc-less movement pairs with UWM’s already available e-sign technology to eliminate the need for borrowers to wet sign documents. This will significantly change the way that loan officers and processors do business – taking what previously took days will now take minutes.

Today, 11% of UWM’s closed loans are doc-less, and the goal is to have 75% of all UWM loans doc-less by the end of 2017. As part of its commitment to drive green initiatives in the mortgage business, UWM will be planting a tree on behalf of the borrower for each doc-less loan that it closes in 2017.

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.

Seeds Of Digital Change In The Real Estate Market

Remember the days when stacks of paper, numerous phone calls, and “snail mail” made up the heart of the mortgage process? Yes, we are referring to those days in the not-so-distant past before the technology revolution made the all-digital mortgage a possibility. As we’ve seen, this technology revolution took the mortgage industry by storm, drastically improving day-to-day operations and increasing efficiency. A similar technological future awaits the home seeking process. As this future reveals itself, it is in our best interest as lenders to remain up to date with these changes to foster collaboration with real estate agents. Advanced planning and networking now will lead to a natural pipeline of referrals, allowing our future origination business to grow in unprecedented ways.

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The initial stages of searching for a home have become almost exclusively digital, activating yet another technological revolution. Logically, the initial home buying effort begins with a simple online search to gauge market availability and pricing while also honing in on certain types of homes or neighborhoods. According to a recent report, about 90% of prospective home buyers use some type of online search in their home buying process. As millennials continue to make up more and more of the first time home buying population, the use of internet throughout the process will only increase.

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As a result of this increase, home buying technology must continue to improve as well. Outside of current online listings and search functionality, there is limited digital capability to make an offer on – and ultimately purchase – a home online. Fortunately, seeds of change are already being planted through a few digital real estate companies that offer the capability to search, list, sell, and buy properties completely online. Similar to the all-digital mortgage where lenders and borrowers are notified of status updates through loan origination software, so too will home buyers and sellers make and receive offers and updates simultaneously. At first glance, it may seem like these digital changes eliminate the need for real estate agents altogether. Quite the contrary. Traditionally, the agent has handled the networking, contracts, and negotiation that are involved in the home buying process. Although many of these components will likely be handled digitally in the future, it is in the best interest of lenders, and borrowers, to continue partnering with real estate agents for a couple of reasons.

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Networking Requires People. First, very few, if any, prospective home buyers want to buy a house sight unseen, so the agent becomes an important local resource in setting up showings. In addition to traditional showings, agents may also have the networking connections to point interested buyers in the direction of properties that would otherwise not be considered. Next, community appeal is a vital factor. Conversations with real estate agents can shed light on the unique local flair of an area, and help match the desires of the borrower with a fitting community. Realtors® may also use their local connections to recommend good inspectors, contractors, and other key individuals involved in the purchase of a home.

Digital Savviness Isn’t for Everyone. Additionally, depending on how comfortable the buyer/seller are with the online tools, the agent may be called upon to use their knowledge and expertise to perform the online negotiations and contractual components on their client’s behalf. Ultimately, this makes the process easier for both buyers and sellers, as well as ensures compliance from a legal standpoint. Thus, just as the role of the loan officer progressed with the all-digital mortgage, so too will the role of the real estate agent transform according to shifting digital demands. The future belongs to agents who are willing to adapt to these demands and take on more of a specialized, hybrid role within the industry.

What does all of this mean for lenders? Having a strong network of real estate agents will always be a sure way to increase origination business. Despite changes in the home buying process, agents will still spend more time with the home buyer than any other party. If you have the trust of the real estate agent, you’re more likely to win the trust (and business) of the home buyer.

As the real estate market begins to perfect and streamline this new process of buying a home, the logical next step is to integrate the mortgage process with the digital purchase of the home. Think of the visibility and brand awareness that would come along with having your institution’s loan products displayed alongside a listing of the buyers’ dream home. Whether this be in the form of a partnership or direct integration with the real estate websites, there’s no doubt it would be advantageous to all parties involved. No matter what changes are thrown our way within the housing industry, there’s no doubt proper preparation and innovation are key to remaining ahead of the digital curve.

About The Author

Dan Green

As Executive Vice President, Operations for Mortgage Cadence, Dan Green works with the team to create greater efficiencies in all areas and coordinating efforts that enhance service quality and teamwork. Formerly, Green served as Chief Operating Officer/Chief Marketing Officer of Prime Alliance Solutions followed by Marketing Lead for Mortgage Cadence. Prior to that, he had an eight-year career with CUNA Mutual Mortgage where he was responsible for origination, servicing, lending technologies, process reengineering and education. With over 30 years of financial services and mortgage experience, he’s keenly interested in lending performance and performance benchmarking that helps lenders constantly increase efficiencies while enhancing the financing experience for borrowers.