Welcome to Ask the eClosing Team, an ongoing series where DocMagic’s eClosing pros tackle real questions that we’re hearing from lenders. Today’s responses are drawn from a recent interview with eClosing Team member Leah Sommerville. We’ll be sharing some more exciting insights from Leah in an additional article next month.

Leah Sommerville, DocMagic’s Sr. eServices Account Exec and an expert from our eClosing team, sat down with American Business Media, publishers of National Mortgage Professional, at the 2023 New England Mortgage Expo to talk about the current state of digital lending. Watch the full interview here.

The Journey To Widespread eClosing Adoption

Below are some additional responses Leah provided on the topic:

Are we still seeing eClosing adoption?

The National Association of Realtors confirmed that 97% of buyers shop for their homes online and more than half of buyers ultimately purchase their homes online. Lenders are embracing eClosing to meet borrowers’ expectations of a digital closing experience. They are realizing that it doesn’t make sense to employ a paper process during the last touch point they have with borrowers… the closing table.

What are the specific benefits driving eClosing implementation?

Borrower expectations, eNote acceptance, and the evolution of eNotary legislation have persuaded many lenders to embrace eClosings. Loan originators appreciate eClosing’s opportunity to allow all participants to review the entire closing package (as often and as long as they’d like) in advance of closing day, provide the borrower a 15-minute closing experience, streamline the closing for all stakeholders (including the Settlement Agent’s automated invitation with access to their eClose console, which includes the entire closing package and opportunity to add title docs for eSignature), eliminate shipping/printing costs, and offer immediate access to all documents post-closing to expedite funding.

Are eClosings a fad?

Absolutely not. Is shopping for homes online a fad? Nope again. 87% of lenders agree that eClosing is faster as well as cheaper than traditional closings.

Almost all lenders are offering Hybrid 1 (eSigning, paper note, paper notary) eClosings at a minimum because there is no impediment to adoption. Hybrid 1 eClosings are very similar to eSigning the initial disclosure documents, which most lenders have already implemented. Hybrid 1 eClosing is possible in every state and for every loan type, and is supported by all secondary market participants. We’ve also seen increased volume for eClosings, which include eNotes, as the GSEs, Ginnie Mae, and the Federal Home Loan Banks began funding eNotes in the last several years. Last, but certainly not least, COVID and the constraints on personal interaction affected almost all real estate closings in the past several years—drastically evolving eNotary legislation. In fact, there are now only 2 states that don’t allow for eNotarization.

As long as consumers expect digital experiences and lenders continue to save $444 per loan with RON (Remote Online Notarization) and eNotes, eClosing is here to stay.

As Leah mentioned in the interview, demand has pushed the industry to a place where lenders who want to future-proof their business should provide a digital closing experience. Borrowers accomplish so much online—even borrowers who aren’t traditionally viewed as part of a tech-savvy demographic.

Digital closings are faster, cheaper and more convenient. They are, unequivocally, the future.

To talk to Leah or any of our other experts about eClosing adoption, send them an email at eClosingTeam@docmagic.com.

Related Content:

• A key to eClosing: the developing case of the SECURE Act (3/23/2023)

• HousingWire recognizes DocMagic with 2023 TECH100 award (3/8/2023)
• House overwhelmingly passes federal RON bill (3/1/2023)
  

Recently, we reported that the House passed the SECURE Notarization Act of 2023, which is a bipartisan bill leading the charge to modernize the notarization process with remote online notarization (RON). The bill has been introduced multiple times in the House of Representatives and finally passed in late February; now, it’s arrived in the Senate and is with the Senate Judiciary Committee after two official readings.

The passage of the bill in the House is a positive development as it recognizes the need for making notarization-dependent processes, like eClosing and other real estate transactions, more accessible and convenient for all.

Clearing The Path To eClosing

One of the key ways the bill can achieve convenience for all is by solidifying the way forward for complete eClosing processes in any state in the U.S., which can significantly reduce the time and costs involved in loan closings.

Since RON allows for remote capture of one of the final legal requirements for a smooth closing—the notarial official’s seal on key documents—a federal law establishing rules around RON could pave the way to a future with fewer state-based obstructions to a digital closing process. And the benefits of a Total eClose are clear: loans close faster with fewer mistakes, and costs go down even as business improves for lenders, loan officers (LOs) and notaries.

However, the fact that the bill has stalled out before, despite its current status as under review by the Senate Judiciary committee, is cause for concern for all proponents of digital adoption. The bill needs to be passed by both the House and the Senate before it can become law, and any obstacle in the process only delays clarification of nationwide rules on RON. The Senate Judiciary committee needs to carefully consider the bill and its implications for the real estate industry—including its implications as a final step in pursuit of complete end-to-end eClosings.

The Steps Before RON: Hybrid eClosings & eNotes

While the bill implicitly clears the way for increased use of eClosings, it also draws attention to the fact that RON and digital notarization are only one aspect of closing digitization (albeit an important aspect). The solution for lenders anxiously awaiting passage of this bill? Hybrid eClosings.

Some parts of the lending industry still require paper—in fact, to complete a closing and sell the note to an investor, some lenders are required to paper out two document classifications: the note and anything requiring recordation and notarization. Aside from these essential documents, though, lenders may move toward a more efficient closing by generating electronic (e-enabled) documents for everything else, from the initial disclosure to the closing package. This can be achieved with the use of a software solution built for document generation of e-enabled, eSign-capable digital documents.

Want to discuss what a hybrid eClosing would look like for your organization? Schedule a demo and get your questions answered.

Once lenders have integrated a hybrid eClosing, they can take advantage of the next step in eClosing: eNotes, which are electronic versions of promissory notes. These eNotes are legally enforceable and can be transferred and sold much more easily than traditional paper-based notes, helping to increase liquidity in the market and provide greater flexibility for lenders.

Digital Adoption And Advancement

The SECURE Act is particularly important for lenders who have been seeking to increase their digital adoption in recent years. By allowing for RON and electronic signatures, the SECURE Act makes it easier for lenders and other entities to conduct business in a digital environment. This can help to increase efficiency and reduce costs, ultimately benefiting consumers as well.

Overall, the SECURE Notarization Act of 2023 represents a significant step forward in the modernization of the notarization process. At DocMagic, we’re watching this bill’s progress with excitement and anticipation, and we’ll report any updates here on our blog. Ultimately, we believe the Senate’s passage of the SECURE Act will benefit both lenders and consumers, making notarization faster, more efficient and more convenient.

Related Content:

• HousingWire recognizes DocMagic with 2023 TECH100 award (3/8/2023)

• House overwhelmingly passes federal RON bill (3/1/2023)
  

• DocMagic provides eClosing and eVault technology for Barr Group Mortgage’s First eNote Transaction through Click n’ Close’s non-delegated correspondent eNote program (2/16/2023)

This week, we’re proud to announce we’ve been designated one of the most innovative mortgage technology firms in the U.S. housing economy for 2023 by HousingWire. DocMagic has earned a spot on the coveted list of technology standouts every year since HousingWire began the award program.

Currently in its 11th year, the Tech100 program provides housing professionals with a comprehensive list of the industry's most innovative and impactful organizations. This list is widely used to identify partners and solutions that effectively address the challenges that mortgage lenders face every day.

“We are thrilled and humbled to receive the 2023 Tech100 award,” said Dominic Iannitti, president and CEO of DocMagic. “This recognition reflects the dedication and hard work of our team in pushing the boundaries of innovation in the mortgage industry. At DocMagic, we are committed to staying at the forefront of technology, and to delivering products and solutions that streamline and simplify the mortgage process for everyone involved. We thank the judges and everyone involved in this award for recognizing our efforts and achievements.”

Since 1987, DocMagic has been on a mission to remove paper from mortgage origination and closing processes to facilitate a better overall lending experience. The company has been successful at digitizing critical areas of loan origination, closings, secondary marketing and servicing transactions. In 2014, DocMagic pioneered the industry’s first single source eClosing solution, containing all of the functionality required to facilitate a completely paperless mortgage closing.

In the last year, DocMagic has enhanced many of its core solutions to better serve its clients. For example, remote online notary (RON) functionality was integrated into DocMagic’s Total eClose™ platform. DocMagic launched eDecision, the company’s eEligibility tool, which helps identify the specific type of eClosing that can be conducted in a given region prior to closing. These advancements reflect the company’s commitment to staying ahead of the curve in technology, and to providing the most advanced and comprehensive solutions possible.

Each year the Tech100 program has continued to expand, as the demand for technology in housing continues to progress. This was the fourth year the Tech100 program was separated into two groups — Tech100 Mortgage and Tech100 Real Estate — to highlight the innovation and achievements of organizations within both sectors.

“We're focused on elevating the innovators that are building paths and solutions that enable the largest and most important sector in the U.S. economy to operate efficiently and profitably — the innovators that make housing more accessible and more desirable for the 130 million households that benefit from the stability and economic advantages of homeownership,” said Clayton Collins, CEO of HW Media. “The Tech100 program is the gold standard for organizations in housing who are at the forefront of the kind of innovation that will change the industry forever.”

HousingWire stated that its Tech100 program grows increasingly more competitive each year, and the applicants improve in caliber as the demand for technology in the industry continues to progress. 

Related Content:

• House overwhelmingly passes federal RON bill (3/1/2023)
  

• DocMagic provides eClosing and eVault technology for Barr Group Mortgage’s First eNote Transaction through Click n’ Close’s non-delegated correspondent eNote program (2/16/2023)

• CUSO leaps over hybrid eClose to offer fully electronic loan closings (2/6/2023)

This week, the House passed the SECURE Notarization Act—a bipartisan bill supporting new federal rules around remote digital notarization. The act aims to increase access to Remote Online Notarization and complement current state laws by creating a set of minimum federal standards while allowing states to add their own regulations and rules surrounding RON.

 H.R. 1059, also known as the SECURE Notarization Act, establishes nationwide minimum standards for electronic and remote notarizations, which align with DocMagic's Remote Online Notarization (RON) platform's features. Its passage could increase adoption of digital mortgage and eClosing solutions by lenders and settlement agents. In turn, this advancement could accelerate the shift toward fast and completely digital loan solutions, benefiting lenders and notaries alike.

The bill also requires that states accept notarizations from notaries in all other states when those notarial acts involve or include interstate commerce, which would effectively establish a basis for digital notarization in all 50 states. MBA, the Mortgage Banker’s Association, supports the bill and previously called on its members to campaign in its favor as well as contact their representatives in support.

Overall, this bill could lead to more widespread adoption of RON by lenders and settlement agents, including the RON tools in DocMagic's Total eClose™ platform, as the bill aims to increase access to RON and provide a secure and efficient way to complete documents remotely. DocMagic also supports the bill's requirement of multifactor authentication for identity proofing, video recording of notarization, and other scam preventatives so the mortgage industry can move toward ever-safer closings. The SECURE Notarization Act could help to further accelerate the shift towards digital mortgage and eClosing solutions, achieving easier interstate closings and more secure transactions for all.

Related Content:

• DocMagic provides eClosing and eVault technology for Barr Group Mortgage’s First eNote Transaction through Click n’ Close’s non-delegated correspondent eNote program (2/16/2023)

• CUSO leaps over hybrid eClose to offer fully electronic loan closings (2/6/2023)

• We’re making eClosing easier! (1/9/2023)

Alabama-based mortgage banker Barr Group Mortgage completed the first eNote transaction through Click n’ Close’s non-delegated correspondent eNote program. Others participating in the transaction included the MERS® eRegistry (the mortgage industry’s approved eNote system of record), Ameris Bank as Barr Group Mortgage’s warehouse lender and DocMagic as the eClosing and eVault tech provider.

“We have been blown away by the non-delegated correspondent eNote process offered by Click n’ Close,” said Elizabeth Moore, Chief Operations Officer at Barr Group Mortgage. “Working with Ameris Bank’s warehouse division SVP Jill Gainer helped ensure the set-up process was straightforward, and our first two loans were purchased the day after closing. Using eNotes has eliminated the need for allonges, overnight shipping costs, note corrections and chasing down lost notes.”

Through the eNote program, non-delegated correspondents can decrease turn times on their warehouse line to 48 hours or less, ultimately saving them money in the form of reduced interest charges and enabling them to turn over their warehouse lines far more frequently. Click n’ Close has established partnerships with multiple warehouse lenders, such as Ameris Bank, to expand warehouse line access to qualified program participants previously financially ineligible for these lines of credit. The approval process for program participants captures most of the relevant financial statements and insurance exhibits requisite to the warehouse approval process, thus materially accelerating the warehouse approval timeline.

“We are thrilled to have our first eNote executed in such efficient timing – less than three weeks from application to closing – and with such renowned partners,” said Click n’ Close Owner and CEO Jeff Bode. “Our non-delegated correspondent eNote program provides emerging mortgage bankers with a tremendous opportunity to incorporate incredible agility and operational efficiencies into their business from the get-go and enables them to differentiate themselves with their customers, as well as their title and real estate partners, through a convenient digital closing experience.”

As Click n’ Close’s primary technology partner, DocMagic played an integral role in the success of this first transaction. Total eClose is DocMagic’s comprehensive eClosing system that provides everything necessary for a paperless eClosing. DocMagic’s powerful end-to-end technology provides an intuitive interface that all participants — lenders, settlement service providers, notaries and borrowers — can use immediately, without a steep learning curve.

“Every lender is on the path to digital with the goal of closing electronically and delivering eNotes into the secondary market, but there are many challenges facing smaller lenders,” said Brian D. Pannell, Chief eServicing Executive at DocMagic. “Click n’ Close, a long-time client, had been seeking a way to support their correspondent lenders who don’t have the resources nor the relationships to support conducting transactions with eNotes. We’re proud to have been part of their solution.”

Related Content:

• CUSO leaps over hybrid eClose to offer fully electronic loan closings (2/6/2023)
• We’re making eClosing easier! (1/9/2023)

• Coastal Credit Union Chooses DocMagic’s Total eClose (12/20/2022)

Superior Financial Solutions, LLC, a CUSO owned by Superior Financial Credit Union, chose DocMagic’s Total eClose solution for completely paperless electronic mortgage loan closings and is now performing eClosing ceremonies using Remote Online Notarization (RON) through its title agency subsidiary.

Kurt Neeper, President of Superior Financial, said the company decided to offer their customers’ members an electronic closing, and so looked at companies with the most experience. After researching the industry, they came to a conclusion; DocMagic has gone further down this road than most, its user interface was one of the best in the industry, and its mobile capabilities are second to none. This is critical because most credit union members will be doing their remote closing on a phone or tablet.

As a result, Superior won an industry award for being the first credit union in Ohio to provide a true, end-to-end eClosing solution to borrowers.

Unlike many lenders who settle for a hybrid eClosing, Superior took a different path. Superior supports many credit unions with mortgage origination and consistently focuses on creating a great member experience. The company knew very early that delivering a fully paperless loan closing on an electronic tablet was their end goal and DocMagic helped them to achieve it.

Mr. Neeper said DocMagic’s remote online notary functionality was key to the decision to partner with us because consumers are drawn to it for the convenience it offers. He also pointed to DocMagic’s experience

actively working with eClosing and RON clients in this area every day, for having an awareness of the issues that can arise.

DocMagic’s experience, integrated solution with Superior, and working relationships with key stakeholders - the GSEs, MERS - made the overall approval process much more seamless.

Related Content:

• We’re making eClosing easier! (1/9/2023)

• Coastal Credit Union Chooses DocMagic’s Total eClose (12/20/2022)

• DocMagic unveils eSign 3.0, with new RON, eClosing capabilities (10/6/2021)

Now borrowers can participate in an eClosing on the same device!

To join a typical eClosing event, each borrower receives a unique email invitation and is required to login and authenticate separately using separate systems.

But what if borrowers don’t have the option to utilize separate computers or what if there is only one computer in the household?

DocMagic's Total eClose solution now makes it possible for more than one borrower to join an eClosing using a single device or computer. This dramatically simplifies authentication and reduces the number of steps for your borrowers.

Now eClose using a tablet or other smart device!

With more borrowers using their mobile devices to participate in the mortgage process, we’re offering a more intuitive tablet-based experience. Now borrowers aren’t limited to eClosing only when they have access to a desktop or laptop computer. By giving borrowers the flexibility to eClose using any device, we've made the eClosing process, including Remote Online Notarization (RON), even simpler.

To learn how Total eClose™ can give your organization an advantage over your competition — and position you to handle revenue compression, just visit docmagic.com/total-eclose.

Related Content:

• Coastal Credit Union Chooses DocMagic’s Total eClose (12/20/2022)

• DocMagic unveils eSign 3.0, with new RON, eClosing capabilities (10/6/2021)

• DocMagic named to 2021 Inc. 5000 list of fastest-growing companies (8/26/2021)