In this three-part blog series, we’ve spotlighted key indicators that the mortgage lending industry is adopting digital mortgage processes at an accelerating pace. The first blog focused on the increasing usage of digital mortgage application platforms. The second post took a closer look at the rapid eNote adoption we’re seeing in the market today.
In this blog we discuss the increasing use of hybrid eClosing technologies as the third indicator of accelerated digital mortgage adoption.
Hybrid eClosing Volume and Costs Savings
Since launching Solex eClosing in late 2017, Docutech has now helped leading lenders to complete over 10,000 hybrid eClosings and the momentum is continuing to build!
Movement Mortgage is one exceptional example of innovation in action with their EasySign offering (powered by Solex eClose). The platform provides borrowers the ability to preview documents from anywhere on any device. Now, consumers can take the time they need to, in the comfort of their home, in order to review and fully understand the documents they need to sign. All documents that can be electronically signed are flagged for the borrower resulting in a streamlined and convenient digital process. On the day of closing, only the documents requiring wet signature remain greatly expediting the process at title and settlement. One loan officer commented that he achieved a nine-minute closing!
While a more digitally focused closing process certainly promotes an improved, more informed and convenient experience for the borrower, the benefits for lenders are significant. A hybrid eClose process helps lenders improve loan quality, data accuracy and compliance while also accelerating the overall loan process. Not only does this promote greater efficiency from an operational standpoint by eliminating reliance on outdated processes, it also provides significant cost savings.
As an example, a lender originating 12,000 mortgages per year with an average loan value of $250,000 can save approximately $155 per loan, which adds up to a whopping $1.8M in savings annually when moving from paper closing processes to hybrid eClosing. Hard cost savings for a full eNote eClosing are even more significant compared to manual paper processes. Curious to know how much you could save? Register to use our ROI calculator.
Hybrid eClose Versus Full eClose
In the spirit of making every loan as “e” as it can be, it’s important to clarify the differences between a full eNote eClosing and a hybrid eClosing. To summarize, a hybrid eClosing simply means that some of the documents in the closing package must still be wet-signed, even though some or most of the package can be eSigned.
Generally, the borrower can eSign several documents in advance of the closing ceremony. Then the actual loan collateral docs are wet-signed and notarized at the closing table with the notary. This serves to expedite the closing process, as many of the ancillary documents have already been signed. In many hybrid eClosings, the note is also signed electronically – this is determined by the end investor and whether they accept eNotes yet.
Even so, most eClose platforms allow the lender to determine when the borrower may sign and when they can preview the documents for eSigning prior to the closing.
Benefits of Hybrid eClose
There are many advantages that borrowers, lenders and investors will gain with eClosing.
- If a lender can deliver a loan to the investor electronically, that loan can be certified and funded within 24 hours of closing. It doesn’t always happen that quickly, but most lenders find a significantly faster process. Most lenders see their loans funded by investors in 3 to 5 days but compare that to the up to 15-day timelines with the traditional process and the benefit is obvious.
- Lenders can realize cost savings by maintaining more liquidity due to reduced cycle times.
- The lender achieves operational benefits, saving time, costs and resources. The increased transparency and intelligent automation provided by modern eClose systems alerts lenders to potential issues and avoids missteps.
- Lenders and investors benefit from additional data provided through digitization. Lenders can more easily provide proof of compliance, and investors can more quickly certify the Notes instead of relying on a custodial review.
Hybrid closing capabilities enable lenders to prepare for the future. Even secondary market investors have embraced this method as an interim step on the path to the digital mortgage. In fact, in its eClosing checklist, Freddie Mac explains how to start with a hybrid approach.
To find out how much you could save by making every loan as “e” as it can be with Solex Closing, request a demo of our eClose ROI calculator for your customized cost savings and ROI request.