Companies like Amazon and Uber have raised the bar when it comes to digital experiences. Consumers now expect fast-paced, seamless interaction in all transactions, including buying a home. An eClose platform gives lenders the flexibility to provide borrowers with the mortgage experience they want, whether it’s in person, online, or a hybrid of both.
While the transition from traditional closings to a fully digital mortgage transaction may seem complicated, the right solution can help lenders take their first steps toward a more efficient and transparent eClose process.
What’s driving eClose adoption?
According to a survey conducted by the American Land Title Association (ALTA), the number of title and settlement companies offering eClose has increased 228 percent since 2019. ALTA reports that only 14 percent offered digital mortgage closings prior to the COVID-19 pandemic. In 2021, that number jumped to 46 percent. While the pandemic might have fast-tracked the implementation of eClose processes, the mortgage industry has been on the brink of a digital transformation for years.
The mortgage industry’s digital journey can be broken down into two phases. Phase one concentrated primarily on developing front-end applications to improve the borrower experience. Now, the focus has shifted to digital mortgage closings. eClose is a must-have for organizations that need to differentiate in the marketplace by moving faster with greater agility while at the same time reducing costs.
As the demand for digital experiences intensifies, 47 percent of the Wolters Kluwer 2021 Regulatory & Risk Management Indicator survey respondents say they’ve made some progress with digitizing their lending capabilities. In comparison, 22 percent say they have made significant progress and an enviable two percent fully digitized. Accelerating your digital transformation through emerging technologies can be an opportunity to expand your reach and capture new revenue growth – at a lower cost. Looking ahead to the next 12 months, 63 percent anticipate “significant” or “some” acceleration of their organization’s digital lending processes.
Flexible eClose options
Digital mortgage closings, or eClose, encapsulate the actual settlement and closing process and include the documents necessary to execute the mortgage and supporting documentation. However, it doesn’t necessarily mean all documents are signed electronically. In fact, for specific loan programs or geographic locations, a hybrid approach may be the only option currently available.
In a hybrid closing, only a portion of the documents are signed electronically. This approach is often used to achieve scale while still reaping many of the benefits of eClose. The hybrid close can start with an eNote, which can be signed in every state across the country and is accepted for purchase by government-sponsored enterprises (GSEs). Beyond the eNote, lender documents from loan origination and document preparation platforms that don’t require notarization can easily be incorporated.
A superior eClose platform should provide flexibility for all types of mortgage closings, including wet signature, hybrid, and fully remote and contactless.
ClosingCenter integration with Encompass®
A recent integration of the ICE Mortgage Technology Platform and the Mortgage Electronic Registration System (MERS®) eRegistry with Wolters Kluwer’s eOriginal ClosingCenter provides a simple transfer of closing documents. It gives lenders a compliant and flexible eClose workflow, from origination to closing to secondary market delivery.
Here’s how it works. Encompass loan information from the ICE Mortgage Technology platform is captured by the ClosingCenter platform, thereby enabling an eClose experience that can be extended and customized to meet evolving business requirements. Through the ClosingCenter integration, Encompass clients get access to a complete digital close-to-capital-markets solution, including eSignature, eNote generation, and eVaulting. Wolters Kluwer eOriginal eVault is also integrated with the MERS® eRegistry, which is the centralized system of record identifying the controller (holder) and location (custodian) for the authoritative copy of a registered eNote.
The benefit is that the entire eClose process can occur within one platform where lenders, borrowers, and settlement agents can collaborate easily and securely. The frustration and added costs of managing multiple vendors and platforms are eliminated, streamlining the eClose process with just one solution.
This integration also offers turnkey access to the industry’s ecosystem of secondary market partners, enabling the frictionless transfer and sale of digital mortgages in the secondary market. Lenders can quickly realize the full benefits of eClose and help meet the accelerating market demand for fully digital, compliant mortgage transactions.
Next steps
Keep in mind that decisions made today will impact your business for many years to come. With a clear eClose strategy, you’ll have the flexibility to engage consumers how, when, and where they want. Will you be ready?
Speak to a product specialist to learn how Wolters Kluwer’s eOriginal digital solutions can accelerate your digital strategy with an end-to-end eClose solution.
