TheMReport

28 | TH E M R EP O RT FEATURE the transaction. Many lenders are now offering borrowers the option to e-sign ancillary closing documents that do not require a witness. This dramatically decreases the length of the closing ceremony to minutes, rather than an hour or more, allowing title and settlement agents to increase the number of closings they are able to conduct each day. These efficiency gains also translate into significant cost savings for both lenders and title/ settlement. Slim closings can mean lower notary costs and/ or closing costs, and because e-closings result in a largely electronic closing package, there is usually a corresponding decrease in shipping expenses. As an added bonus, nearly 85% of the U.S. population is covered by e-recording, which further reduces expenses for title and settlement professionals and streamlines the return of the recorded security instrument and the final title policy and fees back to the lender. Along with these immediate cost savings, e-closings also protect lenders and settlement agents from incurring more puni - tive expenses that can result from errors in the closing process, such as missing signatures or pages. E-closings dramatically im- prove the customer experience, which provides a significant benefit to everyone involved in the transaction. Consumers are accustomed to conducting transac- tions digitally, including financial ones. As such, many homebuy- ers, especially millennials and/ or first-time buyers, are going to enter into the mortgage process expecting a digital experience and may be disappointed if presented with a more manual, paper-driven transaction. Furthermore, e-closings are generally much faster than their paper-based counterparts, which delights both first-time homebuy - ers and old hands equally, and using an e-closing process also provides continuity in execu- tion, as almost all consumers will complete the mortgage application digitally and e-sign their initial disclosures. Providing the same experience from beginning to end helps drive consumer comfort, which can translate into repeat and/or referral business for every- one involved. Barriers to Adoption G iven that both parties have equally as much to gain by going digital, it can be hard for lenders to fathom why more title and settlement agencies haven't jumped on the e-closing band - wagon. However, title/settlement faces some unique challenges in adopting e-closings, and by gaining a better understanding of those barriers, lenders can put themselves in a better position to help address the issues and drive adoption. One of the biggest e-closing hurdles that title and settlement professionals have to overcome is the technology being used to facilitate them. With multiple e-closing systems on the market today, lenders have their pick of which platform they would like to use. However, settlement pro - fessionals often work with a wide network of lenders, and in some cases, they may only facilitate one or two transactions with a particular lender. This makes the burden of learning each and every e-closing platform on the market seem incredibly unreasonable and creates a major deterrent to e-closing adoption from the settle - ment perspective. What's more, there has been a general lack of focus on settle- ment in the development of these systems. Almost all the e-closing platforms in the market today utilize some form of e-signature technology, but this feature only comprises a small fraction of total system functionality. In fact, almost all e-closing functionality has been designed primarily with the lender's needs in mind. For example, many e-closing systems have been born out of document preparation companies, which makes sense. While lenders are able to electronically draw documents through these plat - forms with ease, settlement agents are often forced to manually tag the title documents because these documents come from various sources. Accessing the e-closing platform can also be a challenge for settlement agents, and if the professional tasked with carrying out the closing ceremony cannot access the technology quickly and easily, then the simple fact is that the technology is not going to be used. Additionally, many e-closing platforms charge settlement agents to use the system, creating ad- ditional resistance to usage. By not taking the title/settle- ment's role in the closing process into account, many e-closing ven- dors have inadvertently created a major barrier to adoption. Lack of adoption ultimately leads to a lack of significant volume, which creates a kind of self-fulfilling problem. If title and settlement professionals are only being asked to conduct e-closing on a tiny portion of their overall business, it may simply not be feasible from a financial or operational standpoint for them to do so. Collaborating for Success L uckily, there are ways that lenders can address these challenges to bring title and settle- ment professionals on board with e-closings. First and foremost, lenders need to help address the technology issue. Working with settlement agents to create a single entry point that allows them to easily access the e-closing platform while still operating in their familiar, day-to-day environment eliminates a huge barrier to entry and can help drive momentum for adoption. In addition, lenders need to work on improving collaboration throughout the loan process, not just at closing. When the topic of lender-settlement collaboration is brought up, the discussion often centers around the exchange of fee data, but there's more to col - laboration than that. Something as simple as delivering every loan package—even the paper-based ones—through the agent's e-closing access point creates a connec- tion point that makes settlement feel part of the process rather than one outside it. As an added bonus, this helps create familiar- ity with the system because the agents are engaging with it each time they pick up the closing package through the access point. Lenders can also help their Regardless of the e-notary status of a county, it is entirely possible to execute the vast majority of the closing package electronically, and doing so goes a long way towards generating enough volume to create muscle memory with title partners to make e-closings the rule and not the exception.

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