eNotes are having a moment. Last month, Ginnie Mae formally kicked off its Digital Collateral Program to begin the process of accepting electronic promissory notes—or eNotes—and other digital loan documents as collateral.

A few weeks before that, on July 1, the Federal Home Loan Bank of Des Moines became the first of the 11-member FHLB system to announce it would accept residential mortgage eNotes as collateral. By mid-July, FHLB Dallas followed suit, while FHLB Chicago just announced two days ago that it was also on board.

On top of that, MERSCORP registered an all-time monthly high of 40,170 eNotes in July, while the number of eNotes registered in the first half of 2020 alone (just under 150,000) already outpaces the total registered in all of last year (127,358). It's clear that eNotes are the wave of the mortgage industry's future.

Compliance Alert: What lenders should know about Ginnie Mae's new program

With this move Ginnie Mae, a federal agency that guarantees bonds issued against pools of FHA and VA mortgages, follows in the footsteps of GSEs Fannie Mae and Freddie Mac, which have been accepting eNotes for a few years now and are to date the largest buyers of eNotes.

eNotes have been on an upward trajectory since early 2018, but this year the pandemic—due to social distancing mandates and a growing preference for closing loans remotely—has accelerated its adoption. Since July, eNote registrations have set a new monthly record in 10 of the last 12 months, MERSCORP has seen a 1,300% increase in companies starting the process to integrate their operations to eNotes, and 18 warehouse lenders are currently funding eNotes—up from one in 2015.

"It’s fair to say that 2020 has been the year of the eNote," said Chris Lewis, DocMagic's Director of Enterprise Solutions. "In my opinion, by the end of the year, any investor that doesn’t accept eNotes will be in the minority and will lose business opportunities as a result."

Related Content:

• Compliance Alert: GNMA Announces Launch of Digital Collateral Program
• MortgageCountry closing loans in 13 days using DocMagic solutions (7/21/2020)
• Improving the Loan Process With eNotes

We’re excited to announce that our state-of-the-art, 25,000-square-foot technology center in Torrance, Calif., is up for Architizer’s A+Popular Choice Awards in the “Architecture +Workspace” category!

Click here to vote for DocMagic.

In 2013, our facility was also recognized by the American Institute of Architects with an AIA Institute Honor Award for Interior Architecture.

The AIA jury praised the buildings’ “beautiful design [that] creates a powerful and fluid space where light dominates” and “the effect of ‘fuzzy space,’ a subtle, experiential, and poetic reference to the digital world.”

Check out these stunning photos of our headquarters:

Related Content:

• MortgageCountry closing loans in 13 days using DocMagic solutions (7/21/2020)
• 3 reasons why DocMagic's document generation solution is so fast (7/15/2020)
• AIA recognizes DocMagic for one of the 2013 Institute Honor Awards for Interior Architecture (1/15/2013)

DocMagic is joining forces with Simplifile, a document collaboration and eRecording provider, to create new process efficiencies that will further digitaize the closing process.

The two companies’ technologies—which include DocMagic’s 100% paperless Total eClose™ platform and Simplifile’s eEligibility data for eNotarization acceptance—are combining to facilitate eClosing usage, instantly qualify eNotarizations by county, and automatically eRecord documents post-closing.

“This integration further streamlines the post-closing process by extending the eClosing process to include county recordings,” said Dominic Iannitti, DocMagic’s president and CEO. “Our partnership with Simplifile provides their vast network of more than 39,000 settlement agents with easy access to DocMagic’s Total eClose™ services.” 

Using Simplifile, settlement agents can seamlessly connect to all of DocMagic’s eClose-enabled lenders in one place to exchange documents, data, and closing logistics.

Additionally, loan closings implemented through Total eClose™ can now be automatically routed to the agent for eClosing coordination, streamlining access to the Total eClose™ room. The digital lift continues beyond the closing table with integrated eRecording in participating counties. Those recorded documents and the title policy are then returned electronically, along with associated recording metadata, to the lender.

“Process consistency is key to driving eClosing adoption with lender closing teams and settlement agents, regardless of what percentage of loans qualify to be closed digitally or where individual loans fall on the digital spectrum,” said Paul Clifford, president of Simplifile. “The combination of DocMagic’s proven eClosing technology and Simplifile’s settlement agent network creates a powerful foundation that enables lenders to scale their digital mortgage efforts as jurisdictional, and investor requirements allow and capture every drop of efficiency and cost-savings possible.”  

Simplifile is a part of ICE Mortgage Services, which applies technology and high-capacity infrastructure to make the mortgage process electronic and more efficient.

Related Content:

• MortgageCountry closing loans in 13 days using DocMagic solutions (7/21/2020)
• 3 reasons why DocMagic's document generation solution is so fast (7/15/2020)
• DocMagic offers free verson of its eSign technology for non-mortgage uses (6/1/2020)

During its first two months of lending, MortgageCountry has been closing loans in an average of 13 calendar days—setting a new standard for speed.

The new mortgage banker accomplished this feat with the help of DocMagic’s 100% digital e-enabled documents and Total eClose™ platform.

How they did it: Download the MortgageCountry case study

“DocMagic completely exceeded our expectations, helping us make our origination and closing process next-level efficient and creating a second-to-none closing experience for our clients,” said Sheila Salvitti, MortgageCountry’s director of communications and social media. “After seeing the level of perfection achieved, we knew we chose the right technology partner to realize our belief that the sky is the limit.”

The feeling was mutual. “It was a pleasure collaborating with the tech-savvy, forward-thinking team at MortgageCountry in a combined effort to master the eClosing process before they ever funded a single loan,” said Dominic Iannitti, DocMagic’s president and CEO. “The unprecedented success we had with the solution configuration, troubleshooting, and implementation of the platform helped set up MortgageCountry to be one of the most efficient independent mortgage bankers in the country."

Working with with DocMagic’s eClosing team, CountryMortgage was able to automate its entire eClose workflow from start to finish in less than 30 days. Salvitti said DocMagic tailored Total eClose™ to CountryMortgage’s business needs, helping them be “flawless from the start.”

Founded in 2019, MortgageCountry entered the industry with a mission to cut the cost of a mortgage by using forward-thinking technology and a re-engineered mortgage process. The company's unique business model includes the fact that it's run virtually via a 100% browser-based technology.

MortgageCountry identified that the primary reason for rising costs is the industry’s reliance on a large outside sales infrastructure, absorption of mortgage brokers, and corporate expenses throughout the banking industry. It aims to reverse this trend by partnering with the best technology partners to provide an intuitive and simple platform that meets clients everywhere and anywhere.

“To be successful in today’s fast-moving, rapidly changing lending landscape, implementing the right technology is business-critical to disrupt an industry plagued with good ideas but poor execution,” Salvitti said. “MortgageCountry has successfully delivered on our promise to make the client experience as simple, quick and easy as possible.”

MortgageCountry reported that its clients valued the fact they were able to receive the complete closing documents well ahead of the closing and could sign on their own time without a rigid schedule. Clients said the process was more comfortable than prior experiences because they were able to review and sign the closing documents without the pressure of someone looking over their shoulder.

To learn more about how MortgageCountry found success amid challenging economic conditions, check out our updated blog post, where you can download the free case study.

Related Content:

• 3 reasons why DocMagic's document generation solution is so fast (7/15/2020)
• DocMagic offers free verson of its eSign technology for non-mortgage uses (6/1/2020)
• New AutoPrep tech accepts docs from ANY provider for paperless eClosings (4/3/2020)

At DocMagic’s May 27 webinar, “Road-Tested eClosing Strategies for Today,” Ben Sherman, president of real estate recording services firm Synrgo, shared some surprising facts and numbers about county recorders and electronic closings.

First, what's eRecording?

eRecording is a method of electronically delivering documents to the county recorder. So instead of mailing or FedEx-ing a document package, you’re scanning it and sending an electronic version to the courthouse via the Internet.

County recorders' ability to eRecord depends on their software systems. eRecording can be completed in minutes or hours, instead of the days or weeks that it takes to manually record a paper document.

What does this have to do with RON?

Any lender that wants to close a loan using remote online notarization (RON) has to find a jurisdiction that allows eRecording (except for specific papering-out exception we'll get to later). “Otherwise, you can’t get that document on record there,” Sherman said.

Now for the numbers…

The U.S. has 3,143 counties, but 3,590 recording jurisdictions.

Why the disparity? Certain states have more jurisdictions than they have counties. Connecticut, for example, only has eight counties but has 169 townships, and each township has its own clerk that handles the land record system.

As of May 31, there are 2,161 jurisdictions that eRecord.

These counties represent about 90% of the U.S. population, according to the Property Records Industry Association, which maintains an exhaustive list of all counties that eRecord.

Out of the jurisdictions that do eRecord, some still don’t accept electronic deeds.

Sherman says about 1,600 to 1,700 jurisdictions don’t accept electronic deeds, and that overlaps with some that do accept eRecordings. He calculates that about 58 million people, or 18% of the U.S. population, reside within these non-electronic deed-accepting jurisdictions.

13 states allow non-eRecording jurisdictions to paper out electronic documents.

As of July 1, there are 11 states that allow recording entities to print out and scan a paper version of an electronic document for recordation — including a RON document. They are: Florida, Idaho, Iowa, Kentucky, Minnesota, Montana, North Dakota, Ohio, Oklahoma, Tennessee, and Texas. By Oct. 1, Maryland and Washington will also allow papering out.

“That’s really important because that pertains to 452 counties in those 13 states,” Sherman said. “That’s a lot of recording jurisdictions that you can actually still do RON transactions.”

There are 3 key reasons why more county recorders aren’t accepting RON documents.

• Money: The software systems needed to manage eRecordings could cost a jurisdiction tens of thousands just to get started. “Believe it or not, in the United States we have counties that still write in a book,” Sherman said.
• Security: People worry that eRecording has more exposure to fraud than manually submitting a document, but Sherman says it's actually safer. Unlike paper, eRecording leaves a traceable audit trail—you can track who submitted the document, when it was submitted, from which organization, etc.
• Inertia: People may find it hard to change the way they've been operating, said Mike Lyon, executive vice president at Nexsys Technologies, at the May 27 webinar. “So, even though it’s super inefficient ... it’s what we’ve been doing forever and therefore we’re going to keep on doing it until somebody tells us to do it different,” he said.

With the onset of the pandemic, though, the landscape has changed dramatically in favor of eClosings and eRecordings. “That inertia is kind of gone now," Lyon said. "The ball is rolling and … it’s rolling at the county recorder’s office as well."

Related Content:

• RON update: Lots of forward momentum—but also a setback (6/26/2020)
• 3 reasons why underwriters haven't jumped on the RON bandwagon (6/24/2020)
• RON vs. RIN: Why you should know the difference (6/10/2020)

As we’re fond of noting, DocMagic can process a compliant closing document package of 100+ pages in under five seconds. But it’s not just a slogan, it’s a fact. Other document preparation companies take as much as ten minutes to do what we do in a fraction of the time.

So how do we manage to beat the industry standard by so much? We've got three key advantages:

We see the document generation process as one step, not several separate steps.

Other document generation providers look at document generation as just that—the process of receiving data and generating documents. They break down the overall process into multiple disparate steps, like an assembly line. Each phase—including data validation, compliance, document selection, and more—is completed independently, disjointed from the document generation process. Not only does each action take minutes rather than seconds, but the handoff and delivery from one siloed step to another adds additional time.

DocMagic has a totally different approach. Our technology integrates every step into a single synchronous transaction, all before generating a compliant loan document package. Additionally, we build, own, and maintain all of the technology included in our solutions, giving us total control over the entire process.

We feel the need … the need for speed.

We've made processing speed a priority from the first line of code. Our vision was to be the fastest, most accurate and  compliant solution in the industry. From the start, we made it a company mandate that no new line of code can be released into the solution if it adds even a millisecond of processing time. Thus, each new release has rigorous load testing and processing time evaluations that must be satisfied before a new development build can be promoted to production. Speed of real-time transactions is one of our top priorities.

We have a library of over 200,000 compliant mortgage documents.

DocMagic has been in business for more than 30 years, and during that time we’ve built up a massive document library of forms that are updated dynamically by our compliance team, giving our clients access to compliant documents in real time. We’d be shocked to see a document generation solution with a larger and more organized archive then we have today. Other companies can try to catch up—but we’ve got a considerable head start.

So that’s how we do it. Within five seconds of receiving loan data, DocMagic’s integrated dynamic document generation engine will analyze the data, preform data validation, preset data audits, conduct real estate lending compliance checks, perform data computation and calculations, and deliver a compliant mortgage document package. Speedy processing and compliance are simply in our DNA.

Related Content:

• DocMagic offers free verson of its eSign technology for non-mortgage uses (6/1/2020)
• New AutoPrep tech accepts docs from ANY provider for paperless eClosings (4/3/2020)
• A Document Library of Over 200,000 Forms and Counting! (1/21/2020)

Twenty years ago today, President Clinton signed into law the Electronic Signatures in Global and National Commerce (ESIGN) Act, which declared that electronic signatures are as legally binding as wet signatures. And ten years ago today, Congress honored that achievement by designating June 30 National ESIGN Day.

eSigning has shot up in popularity since then. According to Statista, between 2012 and 2017 the annual number of eSignature transactions rose from 89 million to 754 million, while DocMagic has processed more than 300 million mortgage-related eSignature transactions.

So on the 20^th anniversary of the day electronic signatures became indisputably legal nationwide, we're sharing five fun eSigning facts you (probably) didn’t know:

1. President Clinton eSigned the ESIGN Act—sort of.

To sign the bill, the president inserted a smart card encrypted with his digital signature through a scanner, typed in his password—“Buddy,” his dog—and a replica of his signature appeared on the screen. But before he did that, he signed the bill the traditional way, with a felt-tip pen. The reason? White House lawyers believed the Constitution requires presidents to actually put pen to paper to approve legislation.

2. eSignatures are tons better for the environment. Literally.

The global production of paper and cardboard is about 400 million tons annually. That translates to over 220 million pounds of toxic pollution released every year, while pulp and paper production is the third largest industrial polluter in the U.S. and Canada. One of the primary reasons we need so much paper: American companies typically print 1.5 trillion pages per year while the average office worker uses 10,000 sheets of paper a year.

We’re not exactly saying that e-signing could save the world, but it sure is a lot better for the environment.

3. You probably eSign something every day.

If you’re online, you’re eSigning. Any kind of consent—from clicking the “Buy Now” button to ticking the Terms & Conditions checkbox to accepting a website’s cookies—is defined as an eSignature. Typing your name in an email also counts.

4. Electronic signatures and digital signatures aren't interchangeable.

They may sound like synonyms, but there are significant differences. An electronic signature is more inclusive, encompassing any electronic consent process (like the checkbox we mentioned) attached to a contract or record. A digital signature is a type of electronic signature that has more security features; it uses algorithms and encryption to prevent tampering, impersonation of a signer, and to verify a document’s authenticity (i.e., confirm that it hasn’t been forged). Both types of signatures are legal.

5. Some transactions still require paper and ink.

Certain transactions still require paper documents and handwritten signatures, such as wills, adoptions, divorces, utility cancellations, insurance cancellations, court orders and official court documents, and, as President Clinton learned, possibly federal bills.

Absent from this list: notarized documents. As much of the mortgage industry knows, you can e-sign notarized documents (in some states, at least).

Now that you know five new facts, celebrate by eSigning something today!

Related Content:

• DocMagic offers free verson of its eSign technology for non-mortgage uses (6/1/2020)
• New AutoPrep tech accepts docs from ANY provider for paperless eClosings (4/3/2020)
• DocMagic Reaches 300 Million Mortgage eSignings as More Borrowers Opt for eSigning and More Lenders Require Proof of TRID Compliance  (1/24/2018)
  

—Update (2/12/2021): RON update: First new remote online notarization law of 2021 passes

The remote online notarization (RON) landscape is still very much in flux. Three states recently passed RON laws and a new survey shows RON usage surged during the pandemic—but a powerful official from one of the country’s biggest states also announced his opposition to any federal law.

In recent weeks Colorado, Louisiana, and Missouri became the latest states to allow RON closings. Louisiana's governor signed his state’s bill on June 11, while Colorado's and Missouri’s bills still await governors’ signatures. But after that happens, 27 states will have permanent RON legislation on the books (as opposed to the spate of temporary orders passed at the start of the pandemic).

The striking thing about all the state action is how fast the momentum is growing; between 2011 and 2017, only four states enacted RON laws. In the 2.5 years since, another 23 states have jumped on board.

On top of that, the pandemic resulted in a 40% increase in title and escrow companies using RON from March to May, according to a Qualia survey.

Yet the same Qualia survey also found that the percentage of title and escrow companies with no plans to use RON rose as well, from 14% to 23%. The survey attributed that to stay-at-home orders ending, states allowing alternatives to RON (such as RIN), and industry stakeholders coming up with socially distanced workarounds such as drive-thru closings.

Lenders should start offering eNotes this year. Learn why.

At the federal level, RON adoption is also uncertain. In March, bipartisan legislation was introduced in the Senate to allow all U.S. notaries to conduct RON. That bill was referred to the Judiciary Committee, which hasn't taken any action on it yet.

On May 19, however, Calif. Attorney General Xavier Becerra (D) sent a letter strongly opposing the bill to the two senators who lead the Judiciary Committee.

“The proposal under consideration appears to be a solution in search of a problem," the letter stated. "The California Legislature has twice considered and twice rejected the implementation of online notarization, instead preserving its long-standing policy to require that notarizations take place in person.”

He concluded, “I urge Congress to abandon any attempts to impose remote online notarization on the states.”

Related Content:

• 3 reasons why underwriters haven't jumped on the RON bandwagon (6/24/2020)
• RON vs. RIN: Why you should know the difference (6/10/2020)
• Amid pandemic, states boost access to remote online notarization (RON) (4/17/2020)