When you consider the eMortgage process: taking a paper file filled with mortgage lending documents that was executed according to complex rules and converting that into an electronic computer file that is just as legally binding as the paper, it’s a little easier to understand why it has taken nearly two decades of work to get the industry as close to that idea as we are today.
A long time coming
In part one of this series, we witnessed the very beginning of the eMortgage, back when automation first gave technologists the hope that one day software could help lenders manage the entire process without paper. That was quite a dream because a full eMortgage involves the electronic completion of the entire mortgage documentation and closing process. This also includes document generation, delivery, signatures, notarization, authentication and validation.
We talked about the vitally important rise of MISMO, the industry alliance that made common data standards possible. Without these, there would be many different brands of eMortgage and the effort to go paperless would have collapsed under the weight of so many competing standards.
Then, we touched on the legal basis for electronic transactions that came through ESIGN and UETA. Together, these laws established that anytime a physical document or handwritten signature is required to fulfill the terms of a transaction, electronic documents and eSignatures can legally be substituted.
It took the development of many technologies, standards and laws for eMortgage to evolve to its present state, but there are still obstacles to overcome.
Getting over the hurdles
One of the more significant hurdles the industry must still overcome if we hope to take the eMortgage mainstream is eNotary. As we discussed in part two of this series, there’s no federal regulation in place to ensure the validity of eNotarizations. Currently, only 16 states have implemented a definitive legal structure around electronic notarization.
Fortunately, most states now have some legislation confirming the legality of eNotarization. State lawmakers understand it’s an important element for our digital future, but more consistency between the various states will fall to federal legislation. Many in the industry are working toward that now.
Another hurdle the industry will have to overcome relates to the fear that has risen in the wake of recent cyberattacks. Keeping our networks safe is a full time job, whether we’re using paper documents or not. The problem is that many still believe eMortgages are inherently less secure than paper simply because they reside on the network. This is a misconception.
The electronic documents that make up the eMortgage are created out of the same borrower data that lenders have been keeping secure for decades. The only difference is that paper documents aren’t laying around the office for anyone to steal. In truth, if the lender has done a good job of shielding the loan origination system (LOS) from cyberattacks, eMortgages will be safer than paper.
The path ahead
In the recent past, we might have counted technology among the hurdles the industry must overcome, but those days are behind us. We now have robust document generation and management technology, proven eSign tools and even electronic vaults to store the executed documents.
Anyone who attended the recent Digital Mortgage conference knows that the technology has now caught up to our ambition and is no longer a hurdle, but instead has become a launching pad.
To better enable lenders to provide a true digital mortgage to their borrowers, Docutech formed an agreement with Simplifile to offer a complete and integrated eClosing solution. Docutech’s dynamic document generation engine coupled with eSigning technology has come together with Simplifile’s massive network for connecting lenders, settlement agents and county recording offices to enable lenders to make each transaction as digital as possible, down to the document and jurisdiction level.
By establishing a consistent, more efficient process for agents, lenders will realize an expedited ramp up on their Digital Mortgage initiatives. Agents will have the ability to confidently conduct eClosing ceremonies, eSign, eNotarize and eRecord effortlessly, while lenders will be equipped with a solution that extends beyond the closing table and well into post-closing. It’s never been easier for lenders to reach the eMortgage goal.
Looking forward to future history
They say nothing worth doing will be easy. The journey to fully electronic lending has been anything but easy. We’re quite confident that lenders in the future will look back and wonder how anyone ever did it any other way.