Stewart in the Studio, hosted by Marvin Stone, SVP, Strategic Initiatives, is a fast-paced monthly podcast focused on issues vital to the mortgage lending industry. Tune in each month as Marvin and industry thought leaders discuss important trends and timely topics.
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Speakers for this episode include:
Marvin Stone
As Senior Vice President, Director of Strategic Initiatives for Stewart Lender Services, Marvin Stone is working on the digital transformation of the transaction process for Stewart’s full range of services that cover the entire mortgage lifecycle. He also contributes to industry technology by participating in MBA’s MISMO Title and Settlement Community of Practice and being part of Stewart’s generative AI council.
Stone has been with Stewart since 2007 and has managed various technology, process and compliance initiatives for the direct, agency and centralized title divisions. Before joining Stewart, he was CIO for a large title company on the West Coast and held strategic roles with other national underwriters and mortgage lenders.
Stone is a frequent speaker at industry events and is sought out for his commentary on industry trends.
Brian Webster
In his role as President of NotaryCam, Brian is responsible for NotaryCam’s strategic growth and focuses on expanding the company’s remote online notarization (RON) and electronic closing products and services. Before joining NotaryCam, Webster spent two and a half years with the Consumer Financial Protection Bureau (CFPB) where he was the executive sponsor of the eClosing project, an important and ground-breaking new strategy at the time for conducting electronic transaction closings for the mortgage industry that focused on settlement agent partners. He has held numerous executive roles in the financial and mortgage lending sector, most recently as Senior Vice President, Enterprise Solutions for Freedom Mortgage Corporation in Marlton, NJ.
E15: eMortgage Transformation Simplified
Marvin: Hey, Brian, great to have you on the show here. So, NotaryCam’s Done For You eClosing program provides lenders with the fastest path to eClosing with the least amount of effort. Before we talk about your program, what are the benefits lenders enjoy when they move to eClosings? In other words, why, why even bother?
Brian: Yeah, the benefits of electronic closings span across every stakeholder and participant in the transaction. Ten years ago, the CFPB conducted a survey of real estate closings. In order to study the consumer benefits of electronic closings, the results were pretty clear
that consumers who closed electronically felt better overall than those consumers closing by their traditional paper process.
Consumers were more informed, felt more engaged in
the closing process and really appreciated the ability to review documents, ask questions, and correct errors ahead of time, and not waiting until they got to the closing table. In addition to the consumer benefits, the financial benefits of electronic closings and the eNotes have been discussed for the past 20 years.
Lenders know about the faster delivery times, selling
loans more quickly with better management of their cost of funds. What I don’t think gets enough attention are really the operational benefits of increasing efficiencies gained without needing to handle paper files.
Marvin: Okay. So increased efficiency lenders hear this every day, uh, but usually without operational specifics.
So talk about the nuts and bolts. Where are these
efficiencies to be had with the closing? Where’s, where’s the payoff?
Brian: First of all, no more shipping costs, delays or lost files. Keeping all of the documents electronic, it can all but eliminate the introduction of errors from pushing paper. Post closing and secondary teams no longer need to manage physical files, eliminating the many extra touches that occur with those physical loan files.
To put this into perspective, at a large aggregator, we
were able to reduce the amount of time the loan purchasing team spent on file intake by up to eight minutes per file. Another lender reported that one third of her post closing staff handles 70 percent of their loan volume. Those were closed electronically. Whereas two thirds of her staff handles the remaining 30 percent that were closed via paper.
Marvin: So, hold on a moment. The eight minutes per file on file intake is great. That’s a huge savings. No question. But I love this other quote. One third of her post closing staff handles 70 percent of the loan volume, where two thirds of her staff handles the remaining 30 percent that were closed via paper.
And every lender works with multiple title companies. So, does the workload just get shifted to the title company so they have to prep the file for electronic closing and, map the signature blocks and initials and the dates and all of that?
Brian: These benefits do not just apply to the lender, but to
the title company just as much.
You know, anyone that needs to touch a loan file can
benefit from moving to digital. So, to answer your question of why bother, you know, if an organization wants to deliver a better consumer experience, reduce costs by delivering eNotes and gaining operational efficiencies allowing for better staff and resource management, then it’s absolutely worth the bother.
Marvin: Okay, so the benefits are clear, but the typical path to implementation really is not. Can you share some of the hurdles you saw firsthand? I know you held key positions at a major bank and a leading independent mortgage banker. So, just talk about the process and kind of where you had to devote staff and how all that worked.
Brian: There’s very limited information on how to get there
and how to implement it. Many organizations have provided those, you know, how to guides that highlight the, the big ticket items that are needed, such as doc provider partners, eNote, eVault provider, MERS registration, investor agreements, funding, and the challenges.
You know, all of those items are critical steps. But there’s so much more that needs to be done in order to be able to make this switch. You know, having led these efforts at two major lending institutions, you kind of have the bumps and bruises of going through it. You know, while getting legal compliance approval is always a challenge, lenders need to be able to fund and sell eNotes.
You know, those steps are fairly straightforward. The
investor, the warehouse, the secondary markets are already well versed and make the approval process pretty easy. You know, the biggest hurdles that I saw in my experience, were not having a dedicated team or at least an internal champion to drive the changes and the operational kind of twister that lenders put themselves into you know, another hurdle that I had to learn the hard way was what level of eClose should you start with? The prevailing thought, even for me, was starting with a hybrid eClose was the best first step. This is for your non critical documents, you know, the documents that don’t impact funding or recording were signed electronically, usually ahead of time, and then the critical documents are wet ink signed in person with the notary.
While in theory, this sounds like the right approach, but
challenges arose during planning and implementation. You know, I think we spent the most time trying to figure out how to operationalize a hybrid eClose than for any other option we implemented. The easiest way for lenders to be able to implement digital closings is to be able to keep their process as close to the same as it is today.
We want to minimize the impact where implementation
can be much easier, relatively speaking, of course. And that’s where I think our approach can really help putting the power in the hands of the title agent to truly be a partner to really help minimize the changes that lenders have to go through operationally in order to make implementation so much easier.
Marvin: Okay, so we know the benefits and we know the
hurdles. How can a lender listening today start on their path to eClosings using your Done For You process?
Brian: What we’re building here at NotaryCam is based on
my experiences and really trying to design to take as much burden off of the lender as possible.
Where I’ve had the most success from the lender seat,
is being able to find a title and settlement partner that could provide me with eClose solution, and really drive the process. All I wanted to do was to give them my documents, just like I do today, on every single transaction, and then let them do what they do.
Let them close the transaction. While some of the
larger title companies either have their own eClose platform or are licensed from another vendor, not every title company has the resources to be able to do that. Plus, this would require the title company to have the staff, to know how to use the system, and to be able to close the loans electronically and even possibly have their own RON notaries.
This is where we step in with our existing and
prospective title partners. Our ecosystem will put the power in the hands of any title and settlement provider to be able to conduct electronically closed transactions, for any of their lender customers. Lenders can send
their loan documents to the title partner just as they do today.
Again, we’re trying to minimize the intrusion into the
lender’s current process. The title company will submit the request to us. Then we will provide all of the tools the title company will need. We consume the so called “dumb” PDF package. We’re able to ingest it, automatically tag the loan package, but reduces the manual and tedious
task of document tagging.
Within the same process, we’re able to gather the data
and generate the eNote from a GSE approved vendor, and then deposit this into a NotaryCam provided eVault. Then we can either automatically deliver the completed eNote to the lender’s eVault, if they have one, or we can set up and provide the lender with their own eVault if they need one.
By taking away a majority of the operational challenges from the lender, we feel like that this Done For You approach can provide a powerful tool to our title partners in order to deliver an exceptional and game changing advantage. You know, the best next step that any lender can take is to reach out to your title partners and encourage them to contact us in order to get started. We can help you kick off your digital mortgage revolution.
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