Posts

Integration Furthers eLending

PathSoftware today announced that Path, its configurable, multi-channel, cloud-based mortgage loan origination software (LOS), is now fully integrated with DocMagic, a provider of document production, automated compliance, and eMortgage services.

The new web integration provides a direct, secure connection between users’ loan files and DocMagic’s family of products and services. This enables users to order, generate, manage, receive and deliver TRID-compliant documents, such as loan estimates, closing documents and disclosures, with just a few mouse clicks—virtually eliminating the chance of errors and exposure to security risks, while avoiding the time constraints of manually rekeying information.

This integration also enables users to access DocMagic’s Total eClose platform, a digital mortgage solution that contains all of the components needed to facilitate a completely paperless digital closing. In addition, the integration also accesses DocMagic’s eSign technology so borrowers can electronically sign all documents in a secure, compliant manner.

Path was designed to simplify and streamline mid- to enterprise-level, multi-channel loan origination. All loan data, lock data, products, pricing, automated underwriting system findings, loan estimate and closing disclosure documents emanate and are reconciled within one system. In addition, the LOS’s configurable workflows, with role-based functionality, provide visibility into every loan at every stage—so financial institutions can ensure their business rules are followed.

“Smart companies like PathSoftware know that TRID compliance, risk reduction and cost control are huge concerns for lenders, and they’re building value by offering solutions to those issues through their technology and that of their partners, like DocMagic,” said Dominic Iannitti, president and CEO of DocMagic. “We’ve had an excellent partnership with PathSoftware’s parent company for many years. We’re proud to continue supporting them as they introduce new and better solutions to their customers and the industry.”

“DocMagic has long been a leading provider of fully-compliant loan document preparation solutions, differentiating itself by the way it handles data and runs compliance checks,” said Doug Mitchell, director of sales and support at PathSoftware. “Our integration with DocMagic will not only make ordering compliant documents significantly easier for our joint clients, it will also significantly reduce time and cost, and eliminate the need for data re-entry, which can inadvertently cause errors and lead to compliance issues.”

The PathSoftware LOS integration also gives mutual clients the option to take advantage of DocMagic’s Premium Reps & Warrants Guarantee offering. The guarantee covers high cost points and fees calculations, TRID-related audits, customer modifications of documents, document selection, and the Loan Estimate (LE) and Closing Disclosure (CD) under DocMagic’s SmartCLOSE product.

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.

Featured Sponsors:

 

 
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.

Featured Sponsors:

 
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).

Featured Sponsors:

 
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.

Ensuring Total UCD Compliance

DocMagic, Inc. has announced that its technologies are now capable of supporting both phases of the upcoming UCD (Uniform Closing Dataset) requirement. The company’s technology solutions, which have been certified by Fannie Mae and Freddie Mac for both phases of the UCD file delivery mandate, enable lenders to start immediate testing of full UCD delivery—well in advance of the phase one 2017 deadline and the phase two 2018 deadline—as has been recommended by both GSEs.

Featured Sponsors:

 

 
The Uniform Closing Dataset (UCD) is a common industry dataset that allows information on the Consumer Financial Protection Bureau’s (CFPB’s) Closing Disclosure to be communicated electronically.

On September 25, 2017, the GSEs will require lenders to deliver borrower data and the Closing Disclosure in the UCD file. Later, in 2018, the second phase of the mandate will require seller data to be included as well. However, according to a joint statement issued by the GSEs, both Fannie Mae and Freddie Mac are recommending that lenders start to “submit files with both Borrower and Seller data, if available, in order to test their processes and become familiar with the messaging from each GSE’s collection system.”

Featured Sponsors:

 
DocMagic’s technology solutions allow lenders to fulfill the GSEs’ recommendation by generating and compliantly delivering UCD files that include both borrower and seller data to the GSEs. DocMagic can also accept UCD XML data from third parties and deliver it to the GSEs. In addition, the company offers an API for direct, seamless connection to the GSEs’ technologies.

“At DocMagic we went above and beyond attaining the initial GSE UCD certification because we want our customers to have the option to implement the GSE-recommended testing, which allows them to implement phase two requirements now,”  says Tim Anderson, director of eServices at DocMagic.  “Phase one addresses the XML file for the borrower CD and associated data, but the GSEs have definitively recommended that lenders complete everything before the phase one September 25, 2017 deadline. We find that lenders that are serious about sustained profitability and growth tend to follow GSE recommendations and take action ahead of time. Now with DocMagic, all of our lender clients have that option.”

Featured Sponsors:

 
To assist lender clients in preparing to meet the entire UCD mandate, DocMagic recently launched its ‘UCD Control Center,’ a one-stop, go-to resource for everything lenders need to know about the UCD requirement.  It offers tools, documentation, interactive communication for Q&A, webinars, updates, and most importantly the ability for lenders to test for the entire UCD mandate ahead of the complete 2018 deadline.

The company says its goal is to have the bulk of its clients fully prepared to meet the requirements for both phases this year.

“Our customers and partners rely on us to do everything we can to assure they transact the safest, most compliant loans—and helping them prepare for a major new mandate like the UCD requirement is no different,” said Dominic Iannitti, CEO of DocMagic. “Lenders, settlement providers and other organizations must prepare now or run the precarious risk of being unable to sell their loans.”

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 State Of Innovation

website-pdf-download

Over 100 mortgage executives came together to attend PROGRESS in Lending Association’s Seventh Annual Innovations Awards Event. We named the top innovations of the past twelve months. After that event, we wondered what would happen if we brought together executives from the winning companies to talk about mortgage technology innovation. Where do they see the state of innovation? And what innovation is it going to take to get our industry really going strong? To get these and other questions answered, we got the winning group together. In the end, here’s what they said:

Q: Some say innovation has to be sweeping change. Others say innovation can be incremental change. How would you define innovation?

LEONARD RYAN: I would define innovation as more of a process improvement over current methods. Sometimes major breakthroughs happen after a lot of thought on process improvement. Today when we talk about innovation, it often means computer programs and their contribution to making the mortgage process faster, more secure, less complicated or instant. Thirty years ago an innovation was printing a 1003 on a laser printer. That would hardly qualify today since that is now an everyday process. In terms of your awards, it seems the more significant the process improvements, the more likely to be recognized.

Featured Sponsors:

 

 
REBECCA MAYERSON: No change in mortgage banking can be sweeping due to the layers of regulation and compliance by federal, state, GSE, and big banks. So innovation must be incremental due to the risk/reward.

TIM ANDERSON: Incremental. Because the mortgage business is a highly regulated one consisting of a multitude of participants each adding a step and receiving their cut of revenue to get from point A to Z it is a hard business to affect sweeping change. Still too many players, steps touching too many different disparate systems in the process to affect sweeping change or significant impact by itself.  Because of this I don’t see a company developing something like the iPhone coming into the mortgage space with a whole new app or mobile device that is singularly going to revolutionize this business.

Featured Sponsors:

 
The GSE’s because of their critical role in financing and market share (aggregator) have been the ones to affect real change in this business. If you look at their Uniform Mortgage Data Program, (UMDP) it’s a phased in approach at developing systems to better evaluate critical data elements to reduce risk. They moved the traditional post-closing pre-funding QC process to pre-closing QC and leveraging their new technology and regs like TRID (with three day delivery rule) to support this trend. Also because the mortgage process has very distinct processes with siloed departments dedicated to the mortgage manufacturing process, (POS, origination, processing, underwriting, closing, secondary marketing, servicing) each re-entering the same data that introduces a lot of steps, divisions, (overhead, operational costs and risk) vendor players and participants all have to agree to change their processes and automate to affect real change and ROI in this business.

CURT TEGELER: Innovation can be both sweeping and incremental. Innovation must be persistent and a mindset. It is a necessity to remain relevant in any industry and to enhance the products and services we offer. This involves implementing new strategic ideas, creating dynamic products and improving existing services. In having an innovative approach, you are increasing the probability of success and development in your business.

CRAIG ZIELAZNY: Innovation is creating an impactful solution to a problem. The innovation process can’t be boiled down to just listening to customers, though. Only through continuous and meaningful engagement can you identify real problems and execute effective solutions. It doesn’t become an innovation until the unmet need has been overcome by an appropriate and well-executed solution. Rarely is innovation the product of an individual person experiencing an “aha” moment. Ideas are easy, execution is hard and it is what makes any idea tangible.

Featured Sponsors:

 
RICK TRIOLA: I think we all want sweeping change that solves problems quickly and delivers on the promises technologists have made and that consumers all want, but unfortunately we don’t see that, at least not in our industry. Most innovation fails because it never gets to the end user because the innovation can’t get passed through all the gatekeepers and entrenched stakeholders.

For example, the mortgage industry had the opportunity to adopt eSignatures as soon as the Federal ESign Act was signed into law in June 2000. Instead of leapfrogging over the antiquated paper processes and skipping a generation by heading directly to digital lending, too many players decided to invest instead in scanning and faxing devices and processes. Borrowers, buyers, sellers — everyone — would have loved the opportunity to just eSign instead of papering out and couriering documents all over the place, but instead our industry took more than a decade to move in the right direction.

We wish innovation would sweep down on our industry quickly, but the extensive eco-system here combined with and entrenched and outdated status quo results in new innovators being forced to ‘stand down’ while the industry accepts incremental change.

JOHN VONG: In other industries, change and innovation can happen simultaneously and dramatically. However, because the mortgage origination process is very complex, innovation in our industry tends to be more incremental and less sweeping. Take, for example, e-mortgages. As an industry, we’ve been talking about doing e-mortgages since 2000. It’s seventeen years later and less than one percent of originations are e-mortgages. One of the key reasons for this was that there were differing and competing priorities from parties within the mortgage origination and closing ecosystem including lenders, investors, warehouse banks, county recorders, notaries, and GSEs, among others, and not everyone was on the same page about digitization. Customized closing processes throughout the country is another impediment to innovation. Finally, the average borrower gets a new mortgage or a refinance infrequently compared to other common financial transactions, so they are willing (or at least have been in the past) to put up with inefficiency and inconvenience.

Q: How would you define the state of innovation in the mortgage industry? Is it thriving or in a state of decay?

CURT TEGELER: Innovation in the mortgage industry is stronger than ever. The industry is so far behind in technology innovation that it can only advance from here. There are countless opportunities to embrace innovation and the industry is becoming more and more digital. Every phase of the mortgage process is evolving, from the consumer experience to the lender experience.

CRAIG ZIELAZNY: As is the case in all industries, there are firms which innovate and those that don’t but rather choose to follow. The firms which continually innovate maintain close ties with their clients and the market, always searching for a better way to do something or to solve a seemingly unsolvable problem. The state of a firm’s innovation status is largely a function of the culture and the value placed on listening to clients and doing the math to unearth needs which are not clearly identified by the client.

RICK TRIOLA: Despite the fact that I feel our industry moves too slowly in general, we’re actually at a very exciting place right now. While we had the technology to do end-to-end digital lending a decade ago, lenders weren’t ready and consumers weren’t pushing for it. Today, consumers are ready at the same time investors and regulators are pushing for it. Even loan officers we’re talking to are excited about doing digital.

And they want to share all of the benefits of digital with borrowers, that means closing the loan from anywhere. We know this is possible because we have now completed tens of thousands of online notarizations and cracked the code around the ‘last mile’ friction of having to appear in person.

I believe that over the next few years, we’ll see a great influx of lenders moving into fully digital lending and realizing cost and time savings at the same time they offer better experiences to consumers. In 5 years, no one will deliver a mortgage on paper.

TIM ANDERSON: I think now that we have gotten past TRID this has freed up resources and initiatives to implement some change and innovation. I give Quicken Loans a lot of credit as well because everyone now wants their version of Rocket Mortgage and push to better qualify and verify the loan quicker and faster with initiatives like FannieMae’s Day One Certainty initiative and FreddieMac’ s Loan Quality Advisor tools to streamline the process. We are also seeing a major rise in finally implementing the Digital Mortgage and eClosings to complete the eProcess and deliver not only a better consumer experience but a replicatable, repeatable automated QC process that provides electronic evidence of compliance along the way.

REBECCA MAYERSON: Innovation is at the highest level in over a decade and surging. The need to lower expenses while improving the process for the customer while still protecting risk is driving innovation at a high speed.

LEONARD RYAN: Innovation in the mortgage industry is “making a comeback.” The mortgage crisis and subsequent regulations forced vendors with traditional products to spend resources on implementing those regulations. Only new companies or entrepreneurial minds during those times seemed able to develop substantial changes in process. However, I now see the start of vendors looking to make substantial changes to the process. I believe most of those changes will result in vastly reduced lender costs.

JOHN VONG: From the perspective of a technology provider, it’s thriving. Every loan origination system and service provider is enhancing its technology or developing new solutions.

From the lender perspective, however, cyclicality trumps innovation. When the rates are low and demand is high, lenders are often too busy to focus on technology and innovation. Instead they throw bodies at the problem. When volume declines, there is often a reluctance to invest. Instead, loan production is the top priority. That’s why it takes the mortgage industry a longer time to adopt or upgrade technology than other financial services sectors.

Of course, over the last few years, the risk management and compliance areas are an exception because lenders have more of an incentive to protect their companies from regulatory scrutiny after the meltdown.

Q: Lastly, if there was one innovation that you would say the mortgage industry desperately needs to happen over the next twelve months, what would it be?

REBECCA MAYERSON: Any of the Day One certainty steps that would allow All investors beyond Fannie to accept would be great for our industry.

TIM ANDERSON: A closing collaboration system that exchanges the data between the title system of record and lenders not only for TRID or final CD but the upcoming Uniform Closing Dataset (UCD) requirement coming September 25th. Most lenders look at these as separate compliance initiatives but the proper collaboration should start at time of application with the initial Loan Estimate, automatically check for compliance tolerances anytime the data or disclosures change, conduct a final reconciliation and comparison three days prior to Closing Disclosure and keep tracking 90 days after closing of any changes. This should not only include the CD but all the closing documents and then once approved be able to do a full eClosing to ensure data and document quality, integrity and compliance.

CURT TEGELER: Digital mortgages are significant for the mortgage industry. With millennials becoming a large percentage of homebuyers, being able to complete the mortgage process online is important. Bringing the lifecycle of the process from a lead to a buyer is crucial. Essentially, Realtors should have the ability to advertise and turn leads into homebuyers and borrowers digitally. Even a hybrid approach where the front-end process becomes digitized is a step in the right direction. With procedures and an evolving industry ahead of us, the ability to be move quickly is critical to long-term success, and this is done through being digital.

CRAIG ZIELAZNY: Ball games are rarely won because of home runs… It’s the team that strings together singles and doubles that will win. Our industry is no different. Each innovation will contribute to the overall improvement of the industry and the benefits delivered to the various members. If we listen to our customers and probe for a deeper understanding, we will all become innovators and help move the industry forward.

JOHN VONG: The existing traditional origination process is not geared to cater to Millennials, who have different expectations and are more tech savvy than previous generations. They don’t want to spend ninety days to get a mortgage with a traditional loan officer. Millennials want to go to online, fill out their basic information, and get instant decisioning, as well as shop for competitive rates. Traditional lenders need to significantly rethink the customer experience they offer if they want to be relevant to this growing customer segment. Moreover, both traditional and FinTech lenders are going to have to find ways to qualify non-perfect borrowers and do so in a more digital fashion.

RICK TRIOLA: From the lender’s perspective, we desperately need technologies that will reduce their costs and increase their profits in an environment with tightening margins. At the same time, they need tools that will help them compete more effectively as rates rise, refinances disappear and competition heats up.

There has never been a better time to adopt technology that will answer these needs. In my mind, it’s going to be all about online closings, anytime from anywhere, which exactly what eClose360 offers. In fact, we just ran the numbers for a new client and found that using the eClose360 platform would add $18 million in bottom line profits over the next 12 months. That’s the kind of innovation lenders need now.

Progress In Lending
The Place For Thought Leaders And Visionaries

E-Warehousing Picks Up Momentum

Texas Capital Bank has implemented DocMagic’s Total eClose solution.  This implementation enables the bank to function as an eWarehouse lender. They can now accept and fund eNotes from its lender customers that want to drastically speed up the process of closing and selling loans.

Featured Sponsors:

 

 
Total eClose, DocMagic’s eClosing technology, is a single-source, centralized platform that provides all necessary components to enable a completely paperless digital closing. Texas Capital Bank is a provider of warehouse credit facilities to fund mortgage origination and acquisition.

Featured Sponsors:

 
Texas Capital Bank recently funded its first eNote with a key lender client using DocMagic’s eMortgage technology suite. The eNote was instantly delivered to the bank, registered with MERS, and securely stored in DocMagic’s eVault. They completed the entire transaction electronically and transferred the eNote to Fannie Mae in minutes, rather than days.

Featured Sponsors:

 
“DocMagic’s eClosing and eMortgage solutions have provided Texas Capital Bank with the tools necessary to incorporate the funding of eNotes into our everyday operational procedures,” said Donnie Martin, Executive Vice President at Texas Capital Bank.  “We believe the digital mortgage revolution and acceptance of eNotes will continue to grow.  We are pleased to have partnered with DocMagic to build out the infrastructure needed to support the eNote funding process at the bank, which in turn supports the trend towards digital mortgages.”

“It’s very rewarding to support Texas Capital Bank as they move forward and break ground as an eWarehouse leader,” said Dominic Iannitti, president and CEO of DocMagic.  “In this industry, it’s forward-thinking, tech-savvy organizations like this that thrive, set the pace and reach their goals. They understand the fundamental role that advanced technology plays in their—and the industry’s—progress. We look forward to collaborating further as we help drive true end-to-end eMortgage adoption.”

The Consumer Financial Protection Bureau (CFPB) has repeatedly encouraged lenders to implement eClosing technology and operational processes to make obtaining a home loan as easy as possible for borrowers.

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.

Vendor Attributes Revenue Growth To TRID

DocMagic, Inc. reported a 42 percent increase in revenue for 2016. The company credits its growth to the mortgage industry’s demand for products that enable TRID compliance, eSignatures and eClosings. This is the second consecutive year that DocMagic’s revenue has increased by roughly 40 percent.

Featured Sponsors:

 

 
“Lenders have been looking for ways to assure TRID compliance since 2015,” said Dominic Iannitti, president and CEO of DocMagic. “Our user base has grown quickly. A lot of existing DocMagic clients saw the value of SmartCLOSE immediately. It has also been an entry point for many of our new lender clients.”

Featured Sponsors:

 
SmartCLOSE enables lenders to interface with settlement providers and other relevant parties in a secure portal to share, edit, validate, audit, track and collaborate on documents, data and fees. In the past two years, DocMagic has completed numerous key integrations between lenders using SmartCLOSE, their loan origination systems, and new settlement service provider systems. More integrations are being developed.

Featured Sponsors:

 
“The number of eSignatures completed has increased significantly since launching SmartCLOSE and Total eClose,” said Iannitti, referencing activity for eSignSystems, a division of DocMagic that provides digital transaction management and electronic storage systems. “Lenders appreciate that they can stay compliant while gaining the speed and convenience of a digital process.”

DocMagic anticipates its growth will continue in 2017. In February of this year, the company completed a successful pilot that enabled one of the country’s largest warehouse lenders to accept and fund eNotes, a transition that Iannitti expects to become a major industry trend in the next 12 to 18 months.

DocMagic’s growth plans include ongoing calibration of its infrastructure. To maintain its standard for high quality and service, the company added staff in nearly all functional areas, including senior software developers, project managers, implementation specialists, technical support representatives, integration staff and business development professionals.

Progress In Lending
The Place For Thought Leaders And Visionaries

And The 2017 Winners Are …

website-pdf-download

UPDATED-Innovations-2017-Banner

Prominent mortgage executives gathered to see who the Executive Team of PROGRESS in Lending named the top industry innovations of the past year at the Seventh Annual Innovations Awards Event. This honor is the Good Housekeeping Seal of Approval, the Gold Seal when it comes to recognizing true industry innovation. All applications were scored on a weighted scale. We looked for the innovation’s overall industry significance, the originality of the innovation, the positive change the innovation made possible, the intangible efficiencies gained as a result of the innovation, and the hard cost and time savings that the innovation enables industry participants to achieve. In alphabetical order, the top innovations are:

ComplianceEase

ComplianceEase-2017-WinnerPROGRESS in Lending Association has named ComplianceEase a top innovation. In preparation for the TILA-RESPA Integrated Disclosure (TRID) rule, ComplianceEase spent 18 months enhancing its flagship compliance management platform, ComplianceAnalyzer. The company released the new module, called TRID Monitor, which provides the comprehensive, real-time auditing of disclosure timing, changed circumstances, and fee tolerances across all disclosures. ComplianceAnalyzer with TRID Monitor allows lenders to insert flexible TRID compliance controls into any system and can be used at any point in the lending process and across multiple origination channels. The module can also be used for pre- and post-close quality control and securitization due diligence. Depending on a lender’s workflow needs, lenders can use ComplianceAnalyzer with TRID Monitor to review the latest terms and fees on any single TRID disclosure or to monitor changes in fees and terms throughout the origination and closing processes.

DocMagic

DocMagic-2017-WinnerPROGRESS in Lending Association has named the work done by DocMagic a top innovation. As the mortgage industry slowly embraces the Digital Mortgage, DocMagic launched what was dubbed its “Total eClosing solution,” which enables a comprehensive, true 100% paperless eClosing that automates the entire process — from start to finish. Looking back, DocMagic was brought to the forefront of eClosing technology awareness with its participation in the CFPB’s eClosing pilot in 2014. This vendor was 1 of only 12 firms that was invited by the CFPB to participate. If the industry is going to go digital it will need vendors like DocMagic to lead the way. The Total eClose solution includes the seamless incorporation of its eSignature-enabled SMART Documents, a nationwide eNotary network, MERS eRegistry access, eWarehousing, eNotes, a secure eVault, and secure investor eDelivery — all in a single, comprehensive eClosing platform and completely TRID-compliant. There is absolutely no paper involved at any point, at any time.

Mercury Network

Mercury Network-2017 WinnerPROGRESS in Lending Association has named Mercury Network a top innovation. In March of 2016, Mercury Network launched Fee Analytics, a rich set of current data and analytics for actual appraisal fees in every county in the United States, delivered monthly. Lenders subscribe to Fee Analytics to know the most current appraisal fees paid for collateral valuations, along with details on the transactions. Since more than 800 lenders and appraisal management companies rely on Mercury Network for collateral valuation management, more than 10,000 transactions a day are passing through the system, providing rich trended data with many benefits for the industry. With Mercury Network’s Fee Analytics tool, lenders can determine where appraisal fees are rising and where they are falling, a clear indicator of supply and demand, as well as a valuable clue for hyper-local and regional lending booms that present opportunity for business expansion.

Mortgage Network

Mortgage Network-2017 WinnerPROGRESS in Lending Association has named Mortgage Network a top innovation. Mortgage Network has been creating and using its own technology for several years. But in 2016, it took things to a new level by creating an online borrower portal that allows consumers to initiate and drive the mortgage process with very little assistance from the loan officer. The portal gives borrowers the option to upload their own mortgage documents through a drag-and-drop method, virtually eliminating the need for loan officers to keep coming back to borrowers to request more information. Borrowers can also see their loan choices based on the information they provide, receive disclosures electronically, and receive an underwritten loan commitment in as little as two days. In many ways, the new borrower portal might be compared to TurboTax, the off-the-shelf software that revolutionized how Americans prepare their taxes. This portal will do the same for mortgage lending.

NotaryCam

NotaryCam-2017 WinnerPROGRESS in Lending Association has named NotaryCam’s eClose360 a top innovation. As the industry interest in eClosings has risen, with NotaryCam’s eClose360 you no longer have to force participants into the same room, deploy a laptop and signing pad — which is essentially 12-year old technology — to close a loan when it can be done online anytime from anywhere. 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. Further, Fannie Mae approved NotaryCam’s eClose360 as a provider of both a SMARTDoc and eVault solution. Specifically, this online closing solution is now on the list of software that Fannie Mae has certified and approved for use on loans it purchases from mortgage loan originators. NotaryCam’s eClose360 has legally completed tens of thousands of notarizations in all 50 states and over 65 countries.

QuestSoft

QuestSoft-2017 WinnerPROGRESS in Lending Association has named QuestSoft a top innovation. This industry has been inundated with new rules and regulations for some time now. The key to maintaining compliance is preparation. One of the next big rules for lenders to comply with are the CFPB HMDA changes. Last October, QuestSoft sent specifications to 29 loan origination software companies, and those imports are expected to come online during the first quarter of 2017. Customers can then import live data from those LOS platforms to see gaps, interact with their systems, and internally adjust their procedures. The test version is also being provided well in advance of the CFPB’s schedule. Further, QuestSoft’s Compliance RELIEF application has been designed so that as error codes and other specifications are made available by the CFPB, this company will be able to incorporate them quickly and distribute updates to lenders seamlessly.

WebMax

WebMax-2017 WinnerPROGRESS in Lending Association has named WebMax a top innovation. Last year, 5.8 million homes were purchased compared to 5.6 million in 2015 and 5.3 million in 2014. Further, seventy-seven million millennials make up about one-fourth of the U.S. population. Millennials in the U.S. wield about $1.3 trillion in annual buying power, 85% of them are using smartphones as their daily technology device, and 49% are seeking to buy their first home. Millennials are becoming a significant force in the mortgage industry. To reach these new borrowers WebMax’s MortgageWare application provided an innovative digital solution designed to make Mortgage and Real Estate easy, one that enhanced the online lending experience for both the lender and the borrower. In 2016, the solution assisted with the closing of 123,388 mortgage loans and hosted over 2,990 mortgage websites. WebMax clients are provided with a compliant, ascetically appealing, and user-friendly web solution that include key program integrations.

EVENT SPONSORS:

engage-2015-mercury-network-logo

new-mortgage cadence-logo

NEW-TTP-Logo

Progress In Lending
The Place For Thought Leaders And Visionaries

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.

Featured Sponsors:

 

 

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.

Featured Sponsors:

 

“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.”

Featured Sponsors:

 

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 Unexpected

website-pdf-download

For years the industry has expected electronic closing adoption to be pushed by lenders or investors, but that may not be the case. For example, DocMagic, Inc. just announced that Corporate Settlement Solutions (CSS), a title and settlement services company, has successfully implemented DocMagic’s Total eClose solution. As a result, CSS can offer a completely new customer experience, gain a competitive advantage, and remain 100 percent TRID compliant at all times.

Featured Sponsors:

 

 
“We recognized early on that in order to differentiate ourselves from a crowded marketplace, it was paramount to offer elevated service to our clients,” said Jerome Jelinek, CEO and general counsel at CSS.  “With the addition of DocMagic’s Total eClose, we offer lenders the opportunity to transform their mortgage origination process through the elimination of paper, thereby significantly reducing costs and increasing efficiencies.”

Featured Sponsors:

 
CSS combined DocMagic’s functionality, services and integrations into a single offering to create an easy-to-use, out-of-the-box eClosing solution.  DocMagic’s Total eClose functionality unites eNote, eSignature, eNotary, MERS eRegistration, eDelivery, and eVault services to provide a highly-efficient, paperless end-to-end eClosing.  In addition, documents that need to be notarized can be conveniently eSigned and eNotarized without leaving the comfort of their home.

Featured Sponsors:

 
“We are excited that CSS is successfully leveraging our Total eClose solution to provide a completely electronic closing process for their customers,” said Dominic Iannitti, president and CEO of DocMagic. “As a settlement service provider, it is impressive that CSS has taken a leading role in promoting the benefits of eClosings and as an early adopter, they will enjoy a significant advantage over their competitors.”

After the introduction of TRID and its increased liability for lenders and their assignees, if you originate, sell, buy or service loans, you must be able to demonstrate TRID compliance years after a loan closes. DocMagic’s system provides electronic proof and evidence of compliant transactions for future audits with a date and time stamp audit trail of everyone who has touched the transaction at any level.  From the original loan application and Loan Estimate (LE) to receipt of delivery of the final Closing Disclosure (CD), data, calcs and documents are stored in an eVault to provide the ability to replicate proof of compliance.

With TRID’s increased compliance requirements and soon the implementation of the new Uniform Closing Dataset (UCD) requirement, the future is in fully-electronic transactions that help lenders meet strict timing requirements and provide the ability to fully recreate all compliance checks at every point in the transaction.  The CFPB and industry experts agree that it’s better to adopt and implement the technology and processes to make eClosings a reality now as opposed to later.

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 State Of Innovation

website-pdf-download

Over 100 mortgage executives came together to attend PROGRESS in Lending Association’s Sixth Annual Innovations Awards Event. We named the top innovations of the past twelve months. After that event, we wondered what would happen if we brought together executives from the winning companies to talk about mortgage technology innovation. Where do they see the state of innovation? And what innovation is it going to take to get our industry really going strong? To get these and other questions answered, we got the winning group together. In the end, here’s what they said:

Q: Some say innovation has to be sweeping change. Others say innovation can be incremental change. How would you define innovation?

JEFF BRADFORD: Innovation can be incremental or sweeping. The key is that it is an improvement. It can be a small change to a process that improves efficiency or costs, or it can be disruptive and eliminate an entire category of services or processes.

DOMINIC IANNITTI: In order to gain significant traction and adoption in the mortgage industry, things generally happen in increments, mostly because so many parties have to weigh in and agree on how and when to effectuate change. A good example of that is the slow but sure industry adoption of eSignatures, eNotes and eClosings.

However, universal change and innovation can occur when a major compliance regulation is put into effect. The CFPB’s drive to implement the TRID rule created a fundamental shift of seismic proportions in both business processes as well as relationships. This affected so many entities across the mortgage supply chain. The CFPB essentially became a change agent that facilitated never-before collaboration between lenders and title companies. This not only helped the borrower but it also helped develop far greater transparency, much more efficient workflows, and better communication.

Featured Sponsors:

 

So depending on the impetus, innovation can be swift or incremental. But I really define innovation as a process — the process of arriving at new ideas, concepts and approaches to doing things differently — and then bringing all the necessary parties together to execute on and attain adoption.

PAUL CLIFFORD: I don’t think it is either. Innovation isn’t tossing out the old paradigm completely, nor is it tweaking the old paradigm for incremental change. Innovation is taking what we “know,” our collective industry experience, and solving for old problems in new ways. We can’t forget our history, nor can we simply amend it.

MARC RICCIO: There is no definite explanation on how to create innovation, which is what also makes it so difficult to define. Considering something as being innovative means that it is one of a kind regardless of how it was achieved. What matters most in today’s industry, especially in the software world, is that creating innovation is mandatory in order to stay relevant and competitive. Without the ability to think outside of the box, there is little hope for survival.

BRAD THOMPSON: Innovation must be constant. It’s a given, really, for all technology companies, though especially ours. We’ve built our business around rapidly evolving mortgage platforms to meet the ever-changing needs of lenders and their borrowers. Regulations over the past several years, including TRID, are current examples, though many innovations were less reactionary and more visionary for us, such as the rollout of a true borrower portal in 2001 – it’s the combination of both reactionary and visionary innovations that allows lenders and technology providers to stay ahead of the market.

NICKIE BADALAMENTI-KALAS: Innovation does not have to be mutually exclusive to being either sweeping change or incremental change. It depends on the circumstances and specific market conditions in play. Innovation requires a company’s commitment to delivering dynamic solutions, technology, new processes, that proactively address current and future market conditions in a way that adds value to all interested parties.

SHARON MATTHEWS: Innovation comes in all formats, including small changes and large revolutionary advances. Being innovative simply means doing something differently than what has traditionally been done. It means not accepting the status quo as a given, but rather looking for new ways to do things. For every disruptor like the smartphone, there are many more that have been the result of multiple innovations over time that have improved the state of the art. Mortgage technology is a prime example.

Q: How would you define the state of innovation in the mortgage industry? Is it thriving or in a state of decay?

BRAD THOMPSON: Innovation is thriving in the mortgage industry! Stronger than ever, in fact. Some of it is, of course, reactionary – TRID for example – yet the most interesting are forward-looking – like the work we’re doing around business intelligence and our next-generation borrower portal. Lenders require partners that are innovative, therefore, the best companies will be taking similar steps to stay ahead of industry trends.

MARC RICCIO: If you asked me this question 12 months ago, I would have replied it’s in a state of decay because of TRID. Although still weighing some vendors and lenders down, the worst part is over…and we have some exciting and innovation capabilities being released in the next 6-18 months. That being said, there are many new opportunities to embrace innovation. The Millennial generation will need housing, which will push lenders to embrace “their type of technology,” including tablets and mobile devices. We haven’t even scratched the surface with e-signature and paperless process capabilities. The future is all about speed, efficiency and economies of scale, and it will be driven by providing a seamless and optimizing loan process that provides personal service. The lenders who find a way to achieve this through innovation will be the winners.

DOMINIC IANNITTI: To use a well-known proverb, “Necessity is the mother of invention.” I cannot recall the last time I have seen so much innovation in the mortgage industry. Dodd-Frank imposed unprecedented regulatory oversight, introducing new processes and procedures, workflows, increasing compliance costs, along with greater risk while reducing bottom line profit and thinning margins. In order to survive, lenders must turn to eliminating old paper-based processes and automating more of the compliance verification and document process to ensure proof of compliance to protect themselves against future regulatory audits.

The increasingly regulatory intensive landscape the industry has faced ended up forcing a major business change from producing a paper trail, to document compliance in a loan file, to implementing a continuous automated, electronic data verification and compliance audit process. This resulted in ensuring that both the data and the documents which contain them are as current, complete and compliant as possible. Even Fannie and Freddie have moved from a post-closing review process to new pre-closing verification systems in order to verify data before final documents are drawn.

The short answer is that regulatory mandates to implement new compliance rules resulted in vendors developing better technology solutions to accommodate them. While it has been painstaking, I believe that the mortgage industry is about to turn a critical corner. We’re going to reach new heights of efficiency and the truly paperless eMortgage will gain critical mass sooner rather than later.

JEFF BRADFORD: I think innovation is thriving in the mortgage industry. The amount of venture capital that is pouring into the FinTech sector is huge. There are a lot of ideas being funded. We’ll see some of these turn into new services and products and enter the market in the next few years. Some may even disrupt the mortgage market. It will be interesting to watch.

NICKIE BADALAMENTI-KALAS: Personally, I know at Five Brothers we view the state of innovation as thriving. The influx of new rules and regulations has forced companies to develop innovation to respond to constantly changing market conditions. The key is developing a culture within the organization that is continually looking for ways to do things better, faster, and more cost effectively.

PAUL CLIFFORD: While it is thriving from a “spot solution” standpoint, I do feel we are still too reactive rather than proactive, preventing us from innovating at a broader, industry level.

SHARON MATTHEWS: Innovation in the mortgage industry is thriving without question. Every phase of the mortgage process is evolving, from the user experience at the point-of-sale, to eClosings, to post-close processes. We see better, faster and more cost efficient approaches coming to market in all these areas. Even data standards – not something typically associated with innovation – are helping to make possible the vision of a data-validated mortgage, in which quality and compliance are more easily assured from beginning to end.

Q: Lastly, if there was one innovation that you would say the mortgage industry desperately needs to happen over the next twelve months, what would it be?

SHARON MATTHEWS: It would be what we have termed the “Data-Validated Mortgage,” which refers to a loan whose individual data elements are in an accepted, standardized format and is made available in a way that is useful by stakeholders in every aspect of the business. The ability to assess loan documentation from pre-close to close and then extending through to post-close, especially in relation to TRID disclosures, is a game-changing capability affecting compliance, loan quality and investor salability. Leveraging the work performed by MISMO, eLynx and others, the Data-Validated Mortgage is an innovation whose time has come and is ready for adoption by the industry.

DOMINIC IANNITTI: Director Cordray of the CFPB has gone on record as stating that his number one goal moving forward is to implement a total eClosing and electronic Compliance Management System (CMS) that effectively addresses both compliance and consumer satisfaction. Our participation in the CFPB’s eClosing Pilot provided us with keen insight into helping streamline the overall consumer experience from the initial LE and eDisclosure to delivering the final CD and pre-closing package three days prior to consumption.

In order to ensure a truly consistent and compliant process, however, lenders need to document all consumer interactions. Using paper-based or even imaging-based systems aren’t going to cut it. You must start and end with electronically creating a completely paperless process to document consumer consent and understanding, acknowledgement, intent to proceed, receipt of delivery, etc. throughout the entire mortgage manufacturing process.

In future compliance audits, the CFPB is going to be checking the source and validity of the data so lenders are going to have to keep an electronic audit trail to document that as well. The only way to effectively accomplish that is to implement a true eMortgage process (eSign, eDisclosure, eClosing, eNotary, MERS eRegistry) and retain electronic proof and evidence of compliance (data, documents and electronic audit trail) that resides in an eVault along with reps and warrants to ensure total compliance with regs.

MARC RICCIO: I see the need for providing “picture” documentation that allows a borrower to zoom and click a picture of a borrower document with their cell phone or tablet. They need to be able to securely transmit the document to the lender to automatically be uploaded to the LOS and securely attached to the borrower record. The key is providing a secure delivery that requires no human intervention.

JEFF BRADFORD: Appraisals need to get better. Much better. It’s a big bottleneck for lenders trying to close loans when 50% of the appraisals submitted are returned for corrections. Innovation in the appraisal process, in the analysis and in the reporting are desperately needed. We live in a world, which revolves around technology and appraisers are still filling out forms manually. This has to change.

NICKIE BADALAMENTI-KALAS: With the influx of new rules and regulations, property preservation is not just about securing a lock or boarding up a window; it is about preserving the appearance of neighborhoods and maintaining homes as good as the house next door. The speed and accuracy at which servicers can get information from their property preservation company is a critical factor in making this happen. Mobile technology specifically applied to property preservation significantly speeds up this process while also improving data integrity and therefore will have a major impact on the industry over the next twelve months.

BRAD THOMPSON: The digital mortgage is absolutely crucial. Even a hybrid approach where the front-end process becomes digitized is a step in the right direction. With regulations and an ever-changing industry ahead of us, the ability to be agile is critical to long-term success, and being digital is essential to being agile.

PAUL CLIFFORD: Well, I don’t think it is a secret that we need to drive to data standardization and interoperability. The longer we remain a fragmented industry of stakeholders and systems, the longer our problems persist and multiply.

Progress In Lending
The Place For Thought Leaders And Visionaries