February 2017 - Making Millennials Move

TheMReport — News and strategies for the evolving mortgage marketplace.

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TH E M R EP O RT | 31 FEATURE the same day as funding, virtually eliminate the complications that can arise out of tradi- tional overnight delivery channels, as pack- ages are not lost, damaged, or delayed due to inclement weather or other external factors." Digital Deeds: Slow But Sure A third quarter 2016 survey by Fan- nie Mae and Freddie Mac of 130 "key industry stakeholders," including lenders, servicers, warehouse banks, settlement providers, and vendors, found that overall adoption of eMortgages has been slow. The GSE survey asserts that eMortgages continue to gain acceptance among lenders, which are willing to initiate the process while warehouse banks, servicers, and settlement partners, such as title companies, will adopt when requested by lender partners. According to the GSE survey, common concerns across the various mortgage industry segments include: • Acceptance by a limited number of inves- tors • Warehouse line availability • Lack of key stakeholder readiness: servicers, document providers, custodians, title/settle- ment agents, etc. • Implementation complexity • Inadequate return on investment based on industry volumes • Lack of uniform adoption of eNotarization and eRecording • Resource/financial constraints • GSE policy alignment The massive changes in mortgage systems and workflows required to implement the TILA- RESPA integrated disclosures (TRID) perhaps could benefit the industry in the advent of digital mortgages. Or one could argue it cuts the other way with wariness and fatigue holding sway. After all, sweeping industry change with the unavoidable compliance ramifications involves a lot of moving parts and preparations. "[The CFPB] shined a bright light on the 'e' process as the preferred way to meet TRID re- quirements and consumer education and em- powerment," says Dominic Iannitti, president and CEO of DocMagic Inc., a single-solution provider that delivers a fully paperless end-to- end digital mortgage solution. "And Director Richard Cordray says it is the number one thing he wants to see get mainstream adoption before his tenure is up." Cook of LendingQB says: "TRID has come and gone and the industry did not implode. Costs are higher, but that was to be expected given the amount of change that occurred. What TRID accomplished was prove to the mortgage industry that major changes to the way that business is done can be accom- plished… A side effect of TRID was that it forced lenders to re-think their processes and in some cases improve their workflow. This is a bigger deal than many people think because most lenders are stubbornly resistant to change, even if they know it benefits them." So how close is the industry to making end- to-end eMortgages a reality though? As if point - ing to the first concern from the above GSE survey, Iannitti says to follow the money trail. "This will occur when more of the traditional investors begin buying eNotes," affirms the leader of the Carson, Calif.-based provider of mortgage loan documentation software products and services. "We believe a few large players will be stepping up to support the purchase of eNotes in 2017." Bruce Carr, CEO of MiMutual, adds, "The industry needs acceptance by both investors and warehouse banks to have eMortgages at - tain the level in the industry it deserves. The other big hurdle is municipalities: With limited resources at the municipal level greater accep- tance of eMortgages could be very slow." Approximately 1,500 of 3,142 counties in the country, covering about two-thirds of the population, support electronic recording, with new counties adopting the digital method each month, according to Jerome Jelinek, CEO and General Counsel of Corporate Settlement Solutions, a settlement provider based in the Cleveland metro. "Hybrid closings are a necessity when the property subject to the mortgage is located in a county not equipped to receive electronic recordings," Jelinek adds. "The remaining mortgage documentation, however, may be completed electronically, including the eNote. As a result, the digital mortgage process re - mains mostly unchanged, and the benefits are still received by the lender and the consumer." There's no doubt that industry acceptance of digital mortgages will continue to grow, as structural and technological challenges give way to the relentless pursuit of increased efficiency and savings. For Iannitti of DocMagic, the "e" could stand for an enhanced customer service experience for the homeowner and "dramati - cally improved execution" for the lender. Those values are easy to embrace. BRIAN A. LEE is an Atlanta-based freelance writer and former editor of Western Real Estate Business magazine. Although a big fan of mortgage and housing content, the Wake Forest and University of Georgia graduate considers his top moment in journalism a one-on-one interview with baseball legend Hank Aaron in 2009. Anywhere. Anytime. MReport Digital Bringing Today's Lending Headlines into Focus, MReport Digital Puts Mortgage Banking News at Your Fingertips Experts you trust. People you know. News you want. MReport is putting essential mortgage market news at your fingertips with our new digital edition, now available online via your smartphone, tablet, or computer. Enjoy the magazine at your desk, and tap into MReport Digital's easily accessible platform anywhere, anytime. Committed to giving originators, servicers, and all lending professionals access to smarter perspectives, MReport believes it's time to think differently about the mortgage industry. Because the American Dream is evolving . . . are you? Subscribe to MReport and MReport Digital now! Call 800.856.8060 or connect with us online at to take advantage of our special introductory offer!

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