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)

We’re happy to announce that Coastal Credit Union has chosen DocMagic’s Total eClose solution for completely paperless electronic mortgage loan closings and completed their first eClosing ceremony using Remote Online Notarization (RON) in North Carolina. What’s more, we were able to implement fully digital eClosing with RON in only two weeks! 

“Every lender is progressing toward their own vision of digital mortgage lending, but few are bypassing the hybrid eClose and going directly to the completely electronic ceremony,” said Dominic Iannitti, president and CEO of DocMagic. “Not only did Coastal Credit Union go from traditional closings directly to fully electronic loan closings with Total eClose, but they completed that journey in a very short period of time.”

Many lenders are still operating under the mistaken assumption that the work involved in going fully electronic -- investor relations, servicer coordination, MERS connections, etc. -- will take many months to complete. As a result, many opt to enjoy the benefits of a hybrid eClosing process as an intermediary step in their transformation to fully digital lending.

Coastal did not want its members to wait for the benefits eClosing offers and chose a different path. The credit union’s management took advantage of the industry downturn to focus their attention on future-proofing their organization by implementing Total eClose. Management was committed to the process, but no one guessed they would be ready to eClose so quickly.

Within just a few weeks of the management team’s decision to go with DocMagic’s Total eClose solution, the credit union closed a mortgage loan for a member who was purchasing a home in North Carolina but was unable to leave Colorado to attend a traditional closing. The solution operated flawlessly, and its built-in RON capabilities made it possible for the member to close at their convenience.

Coastal was under an emergency order during COVID that allowed the use of RON. Afterward, as the state of North Carolina completed its RON Authorization legislation, the company reverted to IPEN (in-person electronic notarization) using an eNotary agent. Coastal can now close electronically in either manner.

“For us, it’s all about the member experience,” said Wendy Dawson, Vice President of Mortgage Lending at Coastal Credit Union. “We’re always looking for better ways to provide our members with a service that is convenient and accessible, wherever they find themselves. Total eClose provides a transparent and streamlined process through which our members' questions are answered before the closing so they can focus on more important issues -- like how to get the keys to their new homes.”

Coastal Credit Union is a not-for-profit, member-owned, financial cooperative, offering a full range of financial products and services.

Related Content:

• 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)
• 38 states allow remote notarization as RON, RIN and IPEN gain momentum (7/28/2021)

More lenders are moving beyond hybrid eClosings to a fully digital eNote closing process. As of April 6th, the MERS® eRegistry reported over 1.6M unique registered eNotes. The list of organizations that can originate, fund, and purchase eNotes continues to grow and now includes 23 investors.

Recently, DocMagic invited Jeff Bode, President and owner of Mid America Mortgage to discuss his organization’s experience with eNotes on a recent eClosing webinar.

More choices than ever

“When we first started, nobody accepted an eNote, except Fannie Mae and Freddie Mac,” Bode recalled. But as time progressed, Bode said his company had more options, so much so that the real trick was determining who was going to get the note to deliver best execution.

“We had to know, what's going to be our best execution to deliver that loan? Is it an aggregator who is going to pay more or is the value of the servicing we can retain higher if we sell it to the GSEs,” he said.

Today, Mid America sells eNotes to about seven different investors, including Wells Fargo, Chase, Mr. Cooper, PennyMac, Freddie Mac, and Fannie Mae. This increased adoption of eNotes by the industry is exactly what Fannie Mae said was happening in its 2021 White Paper “Unlocking the power of eNotes.”

“eMortgage adoption was increasing before the pandemic. And then — nearly 20 years after Fannie Mae purchased our first eMortgage — the past two years introduced the unprecedented adoption of industry participants who now support and accept electronic promissory notes (eNotes). Now, private investors, funding providers, servicers, and technology service providers are starting to increase their focus on eNotes, too, clearing the path for widespread adoption.”

Watch the webinar: True Stories: Hybrid, eNote and RON implementation

Warehouse lenders come to the table

When Mid America first started originating eNotes, finding a warehouse lender who understood the value of the product was not easy, according to Bode.

“We had been working with a warehouse lender for about five years and told them that we were considering eNotes,” Bode said. “They told us they would never fund those products. As it turned out, that was the company that funded our first eNote because they didn't wanna miss out on the business.”

Today, Bode and his team work with four warehouse banks and won’t consider working with a warehouse lender who doesn’t understand the product.

The MERS® eRegistry now includes 30 warehouse lenders funding eNotes. As lenders continue their unique processes of digital transformation, investor support for eNotes can no longer be considered an impediment to their forward progress.

DocMagic’s Total eClose™ solution facilitates eNotes, hybrids, and full eClosings. To get started with eNotes, request a demo with our eClosing Team!

Related Content:

• SimpleNexus enables fully digital loan closings with DocMagic’s eVault, eNote tech (9/29/2021)

• Ask the eClosing Team: Why are eNotes better than paper notes? (and other burning questions) (8/18/2021)
• 3 reasons why your post-closing department loves eClosings and eNotes (6/24/2021)

DocMagic announced the rollout of eDecision™, a solution that significantly expands the level of analysis applied to e-eligibility determination for eClosings. The result is a clear-cut, highly accurate decision that tells users exactly how far they can take a digital closing based on the unique attributes of the loan transaction—all the way down to county-level eRecording acceptance.

eDecision is powered by DocMagic’s sophisticated audit engine, which begins the decisioning process as soon as the first set of disclosures are generated and continuing with e-eligibility checks throughout the entire loan process. The solution accesses and compiles first-party data, leveraging an immense amount of information to improve the digital closing process.

“Our goal in developing eDecision was straightforward: to help clients execute flawless eClosings and bring a new level of automation to the overall process by providing lenders with an immediate determination of how “e” they can be,” stated Dominic Iannitti, president and CEO of DocMagic. “Simply put, eDecision equates to eSuccess for all parties involved in the closing process.” 

The eDecision solution does not force users to leave DocMagic’s platform and visit another website, use a third-party application, or access an ancillary database. Everything eDecision offers is available within DocMagic’s core process and is provided as an integral component of the eClosing workflow, ensuring a seamless and efficient eClosing process each and every time.

eDecision’s core capabilities:

• eClosing selection – eDecision automatically determines how “e” lenders can be with DocMagic’s Total eClose solution, which offers four distinct types of compliant eClosings. From the moment the first document package is generated, the highest level of hybrid available or a fully-paperless eClosing is instantly identified. 
• eNote certification – eDecision automatically confirms whether a lender is certified to originate eNotes, is registered with MERS, and has completed their MERS end-to-end testing.
• eRecording readiness – eDecision automatically validates whether the local recording jurisdiction is able to accept an electronically executed security instrument.
• Knowledge-based authentication (KBA) – eDecision automatically confirms whether KBA is required in the closing state where it occurs.
• eNotary acceptance – eDecision automatically identifies which type of notarization is accepted within the jurisdiction: remote online notarization (RON), in-person electronic notarization (IPEN), or traditional in-person notarization.
• Investor acceptance – eDecision will also soon provide a determination whether an investor will purchase an electronically closed loan, saving time for secondary marketing departments.

All analysis and results from eDecision are incorporated into DocMagic’s Loan Detail Report (LDR), which is automatically included with all document requests and is accepted by most investors as proof of regulatory compliance.

Iannitti concluded: "We strive to eliminate manual processes and improve the overall user experience. We don’t want our clients having to go elsewhere to research or rely on disparate third-party systems for what we believe should be fully-integrated analysis. eDecision gives lenders, settlement providers and notaries a completely integrated digital closing determination process — and the confidence they need to offer eClosings on a widespread scale.

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 response is supplied by eClosing Team member Leah Sommerville.

What components do you need to produce a full eClosing, including an eNote?

More and more lenders are interested in offering eNotes, which are skyrocketing in popularity due to their many benefits — especially post-closing, when it comes to selling the note instantaneously.

"The process for paper notes includes many manual steps that add time, enhance risk, and add additional shipping costs,” Sommerville said. “eNotes, by comparison, can be delivered instantly to the secondary market, reducing time to funding and including full audit capabilities.”

Ask the eClosing Team: Why are eNotes better than paper? (and other burning questions)

Many lenders, however, still want clarity about what’s needed to deliver a full eClosing process. Sommerville boils it down to four necessary components:

1. e-Enabled Docs

To reach the finish line and provide completely electronic eClosings (the nirvana of every stakeholder’s experience), lenders must first be able to provide e-enabled documents for eClosing processes such as eSignature, eNotarization, eNote generation and eDelivery. Every eClosing process requires e-enabled documents. Fortunately, all of the documents in DocMagic’s eDocument library, which has more than 300,000 documents, are available in an e-enabled format.

The eNote specifically requires the SMART Doc file format determined by MISMO, the mortgage industry’s voluntary standards setting body. (Although SMART Docs have been around for about 20 years, the 1.02 SMART Doc version is the current requirement for eNotes, even as the industry also works towards a 3.0 verifiable version.) A SMART Doc locks together its data and visual presentation in a way that can guarantee the document’s integrity. It also includes a Tamper-Evident seal that is applied to the document to maintain its integrity as copies of the eNote are transferred from one MERS Member to another.

DocMagic’s Document Generation solution has the advantage of being able to produce e-enabled documents as well as generate a SMART Doc eNote.

For lenders currently unable to generate e-enabled documents, DocMagic’s proprietary AutoPrep Solution can instantly e-enable any document package for eClosing. In those cases, DocMagic’s robust digital lending platform can also generate the Category 1.02 SMARTDoc eNote to include in the AutoPrep eClose transaction.

2. eNotary technology

More lenders are using eNotary technology, and remote online notarization (RON) in particular, to conduct eClosings. A RON platform should have some specific elements, including:

• Ability to store the RON Notary’s digital notary seal. “You want your document signature platform to have the capability to track the time and date stamp with the user’s IP address as each electronic signature is applied, but also to digitally apply a notary stamp/seal to electronically notarized documents,” Sommerville said.
• The ability to maintain video recordings for a specific period of time, based on the various states’ laws as they pertain to document retention, along with the capability to produce a full audit trail.
• Identity validation tools such as credential analysis and knowledge-based authentication (KBA).
  
  

3. eVault technology

Once the eNote has been generated, lenders need an eVault in which to store it. DocMagic’s eVault — which was built using proprietary technology that allows our eVault to seamlessly connect to our full suite of solutions — can store not just electronic documents, but also audio files of RON recordings.

Additionally, all of the lender’s partners need their own eVault if they’re going to purchase, service or maintain the eNote. The eNote’s authoritative copy (the eNote equivalent of the original paper note) can be instantly transferred from one stakeholder to the next, as well as having a copy eDelivered along the mortgage chain to the next stakeholder’s eVault.

Sommerville noted that many prominent mortgage institutions and investors already use DocMagic’s eVault, with many more slated to be in production soon.

4. MERS eRegistry connectivity

Every eNote has to be registered with the MERS eRegistry utilizing a unique Mortgage Identification Number (MIN) from MERS. The MERS eRegistry was set up to track which digital copy of the eNote is the authoritative copy and who has permissions to conduct life-of-loan edits to the eNote’s status. Although the MERS eRegistry is the system of record for eNotes, MERS does not actually store eNotes, which is why a dependable eVault is vital to any completely electronic eClosing process.

DocMagic’s close working relationship with MERS is crucial here. Lenders can sometimes find the setup process overwhelming and may lose momentum for their eNote efforts if any roadblocks pop up.

"DocMagic's eClose Team works closely with lenders to guide them not only through the necessary technology adoption, but also through MERS eRegistry setup (as required for eNotes),” she said. “We also work through successful adoption for the lender's business partners to ensure the best experience possible for all stakeholders."

A single-source solution

DocMagic’s Total eClose solution — which facilitates both hybrid closings and full eClosings — is one of the few eClosing platforms that can provide all four of these components. Most tech vendors in the mortgage space only provide one of two of these components, forcing a lender to contract with multiple lenders to produce an eNote.

The eClosing Team can be reached at eClosingTeam@docmagic.com.

Related Content:

• Did You Know: A basic eSign hybrid is easier than you think? (9/15/2021)
• Did You Know: You can get all your eClosing needs met by one vendor? (6/16/2021)
• Ask the eClosing Team: What steps should lenders take to get set up for eClosing? (6/2/2021)

Before the pandemic, one of the major roadblocks to implementing eClosings was a lack of serious commitment. Companies talked the talk when it came to eMortgages, but in many instances the commitment was surface level at best. That all changed after COVID-19.

In 2020, with much of the country on lockdown or under stay-at-home orders — and with business threatening to grind to a halt — many mortgage companies finally decided it was time to seriously consider eClosings.

However, this decision to offer eClosings collides with the challenges of implementing them. The pandemic may have spurred lenders to consider eClosings, but many are unprepared for the reality of the road ahead of them. To get past this hurdle, lenders need to adopt the mindset that they will pursue electronic closings — whatever it takes.

Did You Know: A basic hybrid eClosing is easier than you think?

“No one can sit in a boardroom now and say they won’t do eClosings. They’d get fired,” said Brian D. Pannell, DocMagic's Chief eServices Executive. But much more common are the lenders who are enthusiastic when they start the process and then balk when they encounter difficulties. “There are people who come to the table and say, ‘I'm ready to do this,’ and then two weeks later say, ‘I didn't realize I had to do this much. I'm not ready to do this now.’”

Here’s a sampling of the obstacles that may sidetrack lenders who’ve made the decision to go “e”: They have to invest, sometimes heavily, in new systems; there is confusion over states’ varied eNotarization laws, including the temporary emergency orders; they may encounter resistance from secondary partners and investors; they want to offer eNotes but are confused about how to become a MERS eRegistry member, etc.

“When we talk to someone in the very beginning, we have to get them oriented toward the thought process that this has to be a commitment,” said Daniel McGrew, president and CEO of Elite Digital Advisors and the leader of DocMagic's eClosing team. He added that when he holds a best practices call with lenders who’ve decided to move forward, he informs them, “If your attitude today is, ‘we'll dip our toe in the water’ or ‘we'll just give this a try,’ you're setting yourself up for serious trouble. If the commitment's not there, this thing is going to fail.”

Additionally, this committed mindset needs to come from the top. “Regardless of who initiated the change, at the end of the day you must have executive sponsorship,” Pannell said. “Otherwise, organizations may reach the end of the implementation process only to find that even the pandemic couldn’t accelerate adoption and their company is only eClosing one or two loans a month. Then the executives will ask, ‘Why did we do this?’ Companies need a sustained strategy.”

The commitment needs to be there especially if the initial eClosings don’t go well. McGrew recalls one credit union that began implementing eClosings in 2020. Their very first eClosing, undertaken to great fanfare with high-level executives participating, ended up lasting almost two hours because the notary was completely new to the process.

That could have been a “one-and-done” situation, McGrew noted. However, the credit union was undeterred, learned some lessons from the mishap, and pressed on with electronic closes. By the end of 2020, the lender ended up closing almost 90 eNotes — with a lot more planned for 2021.

Pannell worked with a Midwestern bank that took an aggressive approach, insisting forcefully that all their stakeholders and partners get on board. “It was an uncomfortable change for a lot of people, but the bank made them do it,” Pannell said. The result? “They’re killing it right now.”

Another key reason why lenders must be prepared to push past any obstacles: Borrowers today are demanding some form of eClosing. In the past, they were content to follow the lender’s lead when it came to closings. However, amid the pandemic, borrowers have a new risk tolerance — and in many cases, that tolerance doesn’t allow for a traditional closing that involves a large stack of papers and a drawn-out, in-person signing. They want the safety of a quick or remote closing.

Additionally, borrowers have gotten used to the convenience of an Amazon-type experience, where they order something and it arrives almost immediately.

As a result, lenders need to have more flexibility when it comes to borrowers who want an eClosing on their terms. Since the pandemic, Pannell has gotten calls from lenders requesting help in the evenings, sometimes as late at 10 p.m. — while they were in the middle of conducting a RON closing. When asked why the ceremony was happening so late, lenders would answer, “This is the window the borrowers have.”

“So now lenders have to make themselves and their support staff more available. It’s no longer a world of 8 a.m. to 6 p.m. office hours,” Pannell said. “Lenders are at the beck and call of the borrower now. You’re going to work some unique scenarios, and you have to be committed to that. You have to know that this is the new norm.”

To learn about four other key hurdles to eClosing implementation — and how to overcome them — download the full white paper here.

Related Content:

• Ask the eClosing Team: Why are eNotes better than paper? (and other burning questions) (8/18/2021)
• Did You Know: You can get all your eClosing needs met by one vendor? (6/16/2021)
• Ask the eClosing Team: What steps should lenders take to get set up for eClosing? (6/2/2021)

For many lenders used to a paper-based mortgage process, an electronic closing may feel out of reach. Why? “The county recorder won’t accept it.” “My investors won’t purchase it.” “I can’t change my processes.”

And of course, “It’s too difficult to implement.”

Except it isn’t.

While eNotes and eNotarization do require more time and effort, a basic eSign hybrid — in which borrowers can electronically sign all of the closing documents, with the exception of the note and recordable documents — is very simple to set up. Lenders who are already using DocMagic’s doc gen solution, in fact, can be enabled for eSign hybrids (also known as Hybrid #1) in as little as 24 hours. 

“As soon as you say ‘eClose,’ a lot of clients say, ‘We can't do that. We can't do an eNote. We can't do eNotary,’” said Aimee Eyre, a sales executive at DocMagic. “But eSign hybrids don’t require a big implementation.”

This type of hybrid closing allows borrowers to preview all of their documents ahead of the closing; switches the majority of documents from paper to digital; and reduces a prolonged, drawn-out ceremony to a matter of minutes. Crucially, it’s also accepted by every investor and county recorder in the country. The more complicated pieces of the closing, the note and deed, are still wet-ink signed and can undergo traditional in-person notarization.

During the pandemic, eSign hybrids shot up in popularity as many lenders set up a drive-thru closing system to allow for shorter and mostly socially distanced closings from the safety of a car.

For DocMagic’s doc gen customers, adding on eSign hybrid capability is easy; it can be set up within 24 hours and clients can begin testing it out with their teams and settlement agents. “It’s just a matter of a couple of clicks,” said Darlyn Buthsombat, a DocMagic account executive. “We’ve already done the work on the backend; we already know which forms are e-enabled and what type of eClosing it is.”

Additionally, lenders have plenty of flexibility with such hybrids, which can be implemented for specific investors, states or loan programs.

For a new customer, the onboarding time frame is closer to 30 to 90 days, depending on the size of the company and if they have special requests, as new lenders first need to be set up for processing documents.

For most lenders, there’s one main roadblock to implementing an eSign hybrid: “It’s an operational change. When I speak with a customer, that's their only resistance — it's just a big change to how they do things,” Buthsombat said.

“But there shouldn't be anything that's stopping lenders from doing this type of hybrid because it's really easy,” she continued. “It's a win-win situation for all parties: the lender, the selling agent and the borrower.”

DocMagic’s Sales Team can be reached at sales@docmagic.com.

Related Content:

• Did You Know: You can cut out the middleman and draw your own docs? (6/30/2021)
• Did You Know: You can get all your eClosing needs met by one vendor? (6/16/2021)
• Ask the eClosing Team: What steps should lenders take to get set up for eClosing? (6/2/2021)

The number of title and settlement companies that offer eClosings increased 228% in 2020, according to ALTA’s 2021 Digital Closing Survey of 300 title professionals.

The 2019 version of the survey showed that before the pandemic only 14% of companies offered digital closings. In 2020, amid the COVID-19 crisis and a raft of stay-at-home orders, that figure shot up to 46%.

“Since the onset of the pandemic, title and settlement professionals rapidly adapted their processes to meet the needs of their customers and to continue facilitating safe and secure closings,” said Diane Tomb, ALTA’s chief executive officer.

She added that one of the title industry’s most important tools has been remote online notarization (RON), adoption of which rose 547% in 2020, according to an earlier ALTA survey of vendors.

The 2021 Digital Closing Survey found that 35% of title and settlement companies offer RON technology, while more than 5% of transactions were closed using some version of RON.

“RON is a convenient alternative to traditional in-person notarization for all consumers, but it is especially beneficial to consumers who are unable to easily travel to access notarial services, serve in the military overseas or have time constraints,” Tomb said.

Additionally, 64% of survey respondents expect RON closings to increase in 2021. The factors most likely to affect a company’s timeline to implement RON technology are lender and consumer requests, access to RON providers, and changes to state laws.

At least 36 states have permanent laws on the books to allow some form of remote notarization, and 34 of those states permit RON (the other two states, Alabama and South Dakota, only allow remote ink-signed notarization, RIN, a lower-tech form of virtual notarization that doesn’t use electronic signatures).

Additionally, the federal Securing and Enabling Commerce Using Remote and Electronic (SECURE) Notarization Act has been introduced in both the U.S. Senate and House. It would allow “immediate nationwide use” of RON nationwide.

While RON adoption has increased significantly, paper still comprises the bulk of the mortgage business. Only about 5% of ALTA survey respondents reported that their closings were fully digital, while 85% said all their closings were paper-based.

Additionally, getting set up for RON can be expensive. The average cost of implementing RON, including software, equipment and training, was almost $30,000 per office, according to the survey.

Those who implemented RON, however, reaped some key benefits: 52% of respondents said closing times were lower due to the number of documents that could be signed ahead of time, and 43% reported cost savings.

RON was used most often in transactions involving sellers only (40%), followed by cash deals (23%), refinances (17%) and purchases (14%).

Related Content:

• Senators reintroduce bill to allow remote online notarizations nationwide (5/18/21)
• Should longtime RON-holdout California allow it? Secretary of State considers it (5/6/21)
• RON update: First new remote online notarization law of 2021 passes (2/12/2021)

Lenders are finding there are a host of upsides to eClosings — and their post-closing departments are reaping some of the main benefits.  

In a series of recent webinars, DocMagic clients reveal three key reasons that their post-closing departments prefer digital closings, and especially eNotes (electronic promissory notes):

1. No more time wasted hunting down missing signatures or initials.

This is actually a benefit with any eClosing, including basic eSign Hybrids that produce paper promissory notes.

“The post-closing department, previous to eClosings, had to scrub every document for accurate signatures. For some reason, borrowers just simply could not find the exact same name on every document,” said Chrissy Brown, COO at Atlantic Bay Mortgage Group, which has branches in nine states. “Did they miss a date? Do we have to go back and get something re-dated? Anytime you replace that human element with an electronic or technological advancement, you definitely increase your accuracy.”

Watch the webinar: True Stories: Hybrid, eNote and RON implementation

Beth Eller, the vice president of mortgage services at North Carolina-based Truliant Federal Credit Union, agrees. “The efficacy of it from an operational standpoint is tremendous. There is no missed signature. There is no missed initial. You can't move forward in an electronic closing without hitting every single one,” she said. “So that post-closing follow-up becomes really a non-event as far as the closing package itself goes.”

2. Speed and simplicity: It’s faster and easier to deliver eNotes where they need to go.

A common refrain among the clients was how quick and simple it is after the closing to transfer the eNote. With the click of a few buttons, the eNote is immediately registered with the MERS eRegistry and then sent via instantaneous eDelivery to the eVaults of various participants (whether the lender’s own or downstream to investors and servicers).

Once the eNote is signed, said Stephanie Zinsmeister, senior vice president of operations at AnnieMac Home Mortgage, “Boom, it's in MERS and it's ready to be sold instantaneously without having to transfer it [among] five or six different hands and risk losing that note.”

Jeff Reeves, co-founder and CTO of Canopy Mortgage, which operates in more than half the states, agrees: “It’s this simple: literally when that package is signed and you have an eNote, I go to DocMagic’s console, I hit the button to transfer Control and Location to the warehouse bank, and then they go into their system and they hit the button to send it to Fannie or to PennyMac or to whoever’s going to buy that loan from us.”

Watch the webinar: Managing a successful eClosing initiative

Truliant’s Eller noted that the immediate delivery of the eNote easily shaves six to eight days off the servicing and backend process. Loans can be sold immediately. “It is a better delivery method than paper, any way you cut it,” she said.

Additionally, there’s less of the traditional back-and-forth that happens with a paper note.

“You have one place that you go to grab that package,” Zinsmeister said. “You don't have to wait for paper to come in. You don't have to wait for a title company to email it to you. Post-close, I can just go in there and grab that closed loan package.”

This speed and ease of delivery is why Atlantic Bay’s Brown wasn’t too concerned when in August 2020, Fannie Mae and Freddie Mac suddenly instituted a new Adverse Market Refinance Fee that added 50 basis points to most mortgage refinances.

“Luckily, that [fee] got extended, but in that moment, it was amazing to have that eNote capability … we were able to deliver a lot longer into the process than some of our competitors that didn’t have that [eNote] process, because we’re able to sell instantaneously,” she said.

3. Paper notes can be lost, while eNotes are impossible to lose or destroy.

Let’s be honest: Sometimes FedEx or UPS mess up.

As the lenders noted, with just a few clicks, eNotes are instantly sent where they need to go. With paper notes, however, lenders have to rely on a shipping company such as FedEx or UPS to deliver the note to the correct custodian. But this leaves room for human error, and many, many lenders know what it’s like to have the delivery service lose a note.

In April, UPS lost one of Canopy Mortgage’s paper notes. Usually in such a scenario, the borrower is willing to re-sign the note. Not in this case.

“This person was a real estate attorney and made a huge stink about the fact that he didn’t want to sign another note because it’d be a duplicate, and somehow, we were going to shaft him because we have two notes. ‘What if we found the other one?’ and on and on,” Reeves said. The borrower forced Canopy to draw up an indemnity document with their attorneys.

Despite that, the borrower still refused to re-sign the note. “So here I have this $400,000 note that, really, I can’t do anything with, because UPS lost it,” Reeves said. “If that shouldn’t scare you into wanting to do eNotes, then I don’t know what will.”

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