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Th e M Rep o RT | 17 Feature M ortgage and real estate professionals work diligently to balance the needs of the business with those of their customers, while also accommodating a variety of regulatory changes. At times, this effort requires professionals to step back, re-evaluate their processes and tools, and search for innovations that will create a more positive consumer experience. Currently, many lenders have efforts underway to implement the Consumer Financial Protection Bureau's (CFPB) closing disclo- sure changes, which go into effect August 1. This "Know Before You Owe" initiative has two major components—combining the Truth in Lending Act and Real Estate Settlement Procedures Act disclo- sures, as well as giving borrowers at least 72 hours to review the closing disclosures. The latter component is requiring many lenders to reassess their workflow process. "Traditionally, the lender would ask the borrower to visit their office, where they would give the borrower a stack of paperwork," said Mike Turner, SVP of Lending at Mountain America Credit Union, which has already transitioned to an eLending platform. "The borrower then would take the documents home, review them, and return everything to the lender's office 72 hours later. It's a time- and paper-in- tensive process that can significantly inconvenience the customer." With new guidelines imminent, some lenders find it is an optimal time to overhaul their processes and embrace eLending. Look Before You Leap: The Pros and Cons of eLending L enders may switch to eLend- ing for a variety of reasons. They may want to reduce paper usage or streamline the work- flow process. "At Mountain America, we are dedicated to making things as easy as possible for members," said the company's President and CEO, Sterling Nielsen. "Since clos- ing a mortgage is one of the most complex financial transactions a consumer will ever perform, it made sense to try to simplify the process." Regardless of the reasoning, it's important to carefully weigh the pros and cons. For the Lender Benefits for Lenders: • It saves paper—going paperless eliminates the need to print 300 sheets or more per loan. • The workflow is streamlined— the stack is digitally consolidat- ed in one convenient location. • Documents can be accessed from any office—loan officers can access the files from any computer that has the appropri- ate software. • Documents are more secure—there is no need to physically transport paperwork, making it more dif- ficult to misplace documents. • E-notes can be sent immediate- ly to the investor—this speeds up the delivery process. • The system is scalable—as your lending program grows, the system can be adjusted to ac- commodate the growth. Possible Setbacks for Lenders: • Employee buy-in is needed— some employees may not be comfortable moving away from a paper-based process. • It may require a workflow adjustment—you will need to train employees on how to manage the electronic work- flow, stacking files digitally rather than physically. • Not all partners are ready for an electronic process—since eLend- ing has not been widely adopted yet, some vendors and partners— including investors—may not be prepared to accept electronic versions, so paper copies may need to be generated. For the Borrower Benefits for Borrowers: • The files are more manage- able—instead of a huge stack of papers, the borrower receives a small flash drive. • They can easily review the paperwork from home—bor- rowers have time to review everything at their own pace, in the comfort of their homes. • Fewer signatures are required— after reviewing the documents, the borrower provides a digital signature that is applied to the mortgage. • Fewer visits to the lender's office are needed—most docu- ments can be uploaded and ac- cessed electronically. This saves trips to the lender's office. Possible Setback for Borrowers: • Some borrowers may be uncomfortable with eLend- ing—customers who are not tech-savvy may require additional support from the lending staff. Testing the Waters W ith only a few months to go before the new "Know Before You Owe" guidelines take effect, many lenders are working to adapt to the new guidelines. The CFPB already initiated a pilot program to explore how the increased use of technology during the mortgage closing process might affect consumers' understanding and engagement in the process and save time and money for consum- ers, lenders, and other market participants. It also addresses several consumer pain points such as 1) too Taking the Leap With new closing disclosure changes imminent, now may be an ideal time for lenders to leap full-force into eLending. By Amy Moser

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