As homebuyers complete more of the origination process digitally, from asset verification to disclosures, they expect a similarly modern closing ceremony. Unfortunately, after completing the pre-approval process and working with an agent, confidence can quickly ebb as borrowers near the closing table. Consumers may find themselves attempting to navigate a cumbersome closing process after enjoying the relative ease of a mobile origination experience, while lenders may feel frustrated after experiencing delays and inefficient workflows.
There are a number of reasons why lenders are shifting to a digital mortgage experience. By implementing a host of initiatives to make the lending process more enjoyable for the consumer and to speed up turn times while decreasing user error, it’s possible to empower all parties during each step of the mortgage process.
1. Delays and Labor Costs
Full and hybrid eClose capabilities can drastically reduce the labor costs and delays lenders encounter with traditional closing scenarios. According to the MBA, the largest single component of cost-to-close is labor, which accounted for 70% of CTC in 2020. In order to decrease CTC, lenders must find ways to increase productivity. Digital closing solutions can provide intuitive methods for encouraging productivity, profitability, and competitive advantage.
One report, which surveyed managers, processors, and closing coordinators, notes that for nearly 60 percent of title and real estate professionals, “unexpected delays” are considered the biggest day-to-day challenge. Errors in the closing documents, including typos and financial disparities, appraisal discrepancies, or title report issues, can derail a closing and force a lending team to dedicate hours to handling corrections.
SimpleNexus’ eClose platform allows for push notifications, mobile eSign capabilities, full LOS integration, single sign-on functionalities, and a single-platform experience, meaning that each individual in the closing process can easily communicate expectations or hurdles, quickly access necessary documents, and review all disclosures in one place.
Leveraging hybrid or full eClose capabilities gives lenders the power to decrease labor costs and minimize delays, all while providing the same streamlined experience that borrowers enjoy at the initial point of sale. Digital closings help ensure that lenders and title partners communicate effectively and proactively to deliver closing packages on time.
2. Shift to a Remote Workforce
The pandemic forced employees across nearly all industries to adjust to work-from-home policies, and although many COVID-19 restrictions have been lifted, remote work is here to stay. Mortgage professionals quickly realized that in order to conduct closings in the midst of lockdown orders, they needed tech solutions to be reliable, simple to navigate, and streamlined. Meeting at the closing table was no longer an option. Now, lenders are using that same technology to facilitate closings that are faster and easier.
Using eClosing solutions allows industry professionals to reduce in-person meetings and share important documents and disclosures electronically. Mortgage professionals can put all parties on the same page by sharing the SimpleNexus app via text message, email, a downloadable QR code, or a simple web link.
Additional features such as remote online notarization (RON) and eVault and eNote capabilities free up time at the closing table and help ensure lenders and title agents can easily review, request, and verify documents away from the office. Hybrid and full eClose allows borrowers to complete disclosures in the comfort and convenience of home, lessening the need for travel and face-to-face meetings with all individuals in the mortgage process. Lending teams scrambled to remain flexible during the early days of the pandemic. Now, loan officers and their teams can coordinate closings seamlessly, even while working remotely.
In a moment where consumers are already accustomed to the convenience of mobile technology and the freedom of remote work, hybrid and full eClosings will continue to reshape the mortgage experience for industry professionals.
3. Retaining Talent
In an ever-fluctuating housing market, attracting, and then retaining, talent can prove difficult for title and settlement firms. Outdated technology, inefficient training, cumbersome methods for addressing delays and errors in the closing process, and lack of time to finish tasks can all contribute to employee frustrations. In fact, according to PropLogix’s 2021 State of The Title Industry report, almost 50% of the owners, CEOs, and other executive staff cited hiring and training new staff as the number one challenge they face in the title industry.
Superior closing technology can be a significant tool for recruiting and then retaining talented employees. Hybrid and full eClose solutions give employees more flexibility in how and when they interact with lenders, borrowers, and real estate professionals, while providing greater visibility into document status, closing costs, tax and insurance escrows, and hold-backs. When employees have access to robust eClose solutions, they can complete their tasks more efficiently, make fewer errors, and collaborate more closely with all parties involved in the homeownership journey. Title and settlement firms that can keep their agents happy and productive with functional tech are less likely to lose employees to competitors.
4. Anticipating the Future
As the mortgage landscape evolves, the need for a seamless, collaborative eClose suite will only become more apparent. Margin compression and rising rates will require lenders to better calibrate their capacity. More mergers and acquisitions are expected in 2022, and some lenders will continue to recruit and grow, while others will shrink or go out of business. With $1 trillion less mortgage volume predicted, lenders will need to work more efficiently with their closing teams.
Mortgage professionals may also change how they process appraisals. The Federal Housing Finance Agency (FHFA) approved desktop appraisals permanently for purchase loans, starting in 2022. This way, appraisers can use public records to complete appraisals remotely. While the FHFA initiated this process to alleviate challenges during the early days of the pandemic, it’s since become clear that desktop appraisals can reduce delays and afford closing parties more convenience. An eClose solution that seamlessly incorporates appraisal documents will be essential to speedy, accurate closings.
Additionally, as remote online notarization (RON) legislation gains traction at state and federal levels, lenders and settlement professionals alike will benefit from a closing portal that seamlessly incorporates RON capabilities. Currently, over 30 states have adopted RON legislation, with New York most recently passing a permanent RON law that will take effect in June 2022. Meanwhile, the SECURE Notarization Act remains under review with Congress. With an eClose suite that ensures a secure RON process, mortgage professionals will reduce administrative delays and improve digital asset management through eNote, eVault, and eRegistry functionalities.
Wrapping Up
A homeownership platform that includes hybrid and digital closings helps improve lender efficiencies, reduce costs, shorten production cycles, promote growth, increase customer satisfaction, and improve pull-through rates.
SimpleNexus’ improved Closing Portal means better overall usability for all parties, and greater ability to view documents within the system. Settlement agents now have the capacity to share loan files with others, ensuring they can efficiently coordinate disclosures with the borrower. Lenders, in turn, have greater opportunities to collaborate with realtors and settlement staff for smoother closings. eClose solutions ensure that each step of the homebuying journey is convenient and efficient – not just the initial inquiry and loan application.
Start closing digitally today with SimpleNexus. SimpleNexus is a certified eClosing solution provider by Fannie Mae and Freddie Mac.
