Fulfillment Services Series Part II: Why There is Still Paper in Digital Lending

One of the primary reasons mortgage lenders have been working to take their operations fully electronic is that paper is expensive. Storing it and then finding it later is extremely costly. And borrowers, for the most part, are tired of dealing with printed paper. For many lenders, the digital mortgage promises an end to paper and its expense.

But we’re not quite there yet.

As lenders continue their journey to digital, there are two reasons that paper fulfillment of mortgage loan documents will remain an important part of the origination process for the time being.

Reason 1: Some people want paper.
The first reason that paper fulfillment is still important is that about one in five borrowers who close a loan with Docutech lender clients still want physical mortgage documents. They are just not ready to go fully digital when it comes to the biggest investment they are likely to ever make.

The assumption is that borrowers preferring paper documents are older and distrust digital financial tools. Surprisingly, our research indicates that some younger people also want to execute their mortgage documents on paper forms.

To ensure a great borrower experience for every consumer the lender serves, we must accommodate these borrowers. As creditors move beyond paper disclosures and generate more documents digitally, offering borrowers an opt-out and planning for those that fail to respond electronically will remain vital.

Reason 2: The high risk of non-compliance.
Even creditors dedicated to moving everything to a digital workflow must have a process in place to send, track, and receive physical loan documents for some of their customers. Failure to deliver documents within statutory time frames carries with it a high non-compliance cost, ranging from $5,000 to $1 million per day.

One of the things that sets Docutech apart is that our document generation comes with fully integrated electronic delivery with configurable failover to print and mail. This allows our clients to eliminate the worry of timely delivery. Our service will automatically drop the file to paper if the borrower doesn’t accept the electronic version, enabling us to mail it out on schedule.

Building this redundancy into our system not only ensures full compliance and protection in the case of an audit, but it also ensures a positive experience for the borrower.

Why lenders must digitize their paper fulfillment
It’s very important that lenders recognize the need to digitize paper mail fulfillment. This may sound counterintuitive as many consider paper the opposite of digital, but it takes a digital process to make sure the paper is delivered properly and seamlessly with no further interaction from the lender required -- and the lender gets back the electronic proof that it has occurred.  Critical event data associated with both the electronic and paper delivery status are sent back to the lender’s system of record where they are ingested automatically to drive workflow forward and to optimize the loan life cycle to achieve the earliest loan close date.

Further, because our system generates documents dynamically, we're able to update the document date on the forms to match the day that they were mailed rather than the day that they were generated for electronic delivery.  That’s one of our differentiators, as it ensures that the lender receives accurate data and documents that can be used for investor and regulatory audits.

In addition to our integrated electronic delivery failover to paper, we also have a direct to fulfillment API allows any lender to use our service to use Docutech to print and mail documents of any kind, on demand.  This process takes the work and worry out and gives lenders all of the benefits they enjoy with their fully digital document workflow.

Because we’ve been doing this for decades, paper fulfillment of mortgage documents need not hinder a lender’s efforts to go fully digital. Download our Fulfillment Services solution brief to learn more.

Fulfillment Services Solution Brief