Over the past few years, as mortgage technologists worked feverishly to create a path from paper to fully electronic mortgage closing packages, some in the industry have been sitting back and asking why? Consumers don't seem to be in any rush to sign for a home loan the way they buy lumber at Home Depot. No one is suggesting that loans will cost borrowers less if they sign them electronically. The GSEs don't seem willing to pay lenders more for electronic loans. Isn't this just technology for its own sake?
It comes down to money. About $250 per loan, according to the MBA and its MISMO group. That's pretty close to what the guys at the eMortgage Alliance (primarily DocuTech and Encomia) have been saying for over a year, but they also include savings for other players in the business.
The MBA will be hosting its annual Technology in Mortgage Banking conference in Orlando at the end of the month. I'm looking forward to visiting with executives there to find out if this carrot is enough to get more lenders moving in this direction. I anticipate that lenders have always suspected that going electronic would save them money, but were waiting until the technology was proven and affordable and until their investors had all signed off on it.
But technology released over the past couple of weeks may make it easier for lenders to get their feet wet without waiting. Today, DocuTech announced its new DT WebXpress, a service that provides initial disclosure documents via its secure servers. DocuTech can distribute SMART docs, which were designed to accept electronic signatures, but the specifics of the solution were not part of the company's initial release.
A few weeks ago, Carson, Calif.-based Document Systems released its new eDisclosure system, specifically designed to get the 72-hour disclosures signed by borrowers online and within the government-mandated time frame. In the event the docs are not viewed and signed, the system alerts the lender so that the paper disclosures can be sent out before the deadline.
Online lenders have been doing this kind of thing for some time, but for traditional, paper-based lenders, these tools could be a step in the right direction. According to DSI's CEO, Don Iannitti, the savings in time, printing and postage are significant if even a portion of the up front disclosures are signed online.