MReport March 2017

TheMReport — News and strategies for the evolving mortgage marketplace.

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18 | TH E M R EP O RT FEATURE I f we learned anything at December's Digital Mort- gage Conference in San Francisco, it was that the industry is ready for the electronic mortgage. That should come as no surprise to anyone who has been in the industry for very long. A mortgage originated, sold into the secondary market, and then serviced in a completely electronic fashion, has been the dream of many mortgage industry tech - nologists for almost two decades. That's how long ago the federal government passed the Electronic Signatures in Global and National Commerce Law, also known as the E-Sign Act. It All Started with E-Sign W hen E-Sign was signed into law, a few forward- thinking mortgage profession- als got a glimpse of our future. They saw a world in which our painful paper-based processes were abandoned in favor of all- electronic mortgage loan origina - tion. It has remained a dream for most industry participants for the last 17 years. E-Sign was passed on June 30, 2000, by the U.S. Congress to facilitate the use of electronic records and electronic signa - tures in interstate and foreign commerce. It created a national framework for conducting busi- ness electronically and formal- ized the acceptance of electronic signatures. Of course, we live in a country where a great many powers are reserved for the state. Ultimately, it's state law that has determined when and how quickly the industry has been able to move toward the eMortgage. Because our government lead- ers knew the federal government was not intended to direct the states but that, without consensus among these various governments, many problems—including a negative impact on interstate com- merce—would result, the National Conference of Commissioners on Uniform State Laws (NCCUSL) has been working for the unifor- mity of state laws since 1892. In the wake of E-Sign, this group created the Uniform Electronic Transactions Act, also known as UETA, to provide model legislation the various states could use to create state laws that would allow them to act in concert regarding the retention of paper records and the validity of electronic signatures. To date, 47 of the 50 U.S. states have adopted UETA. The District of Columbia, Puerto Rico, and the U.S. Virgin Islands also use the legislation. The other three states wrote their own electronic commerce laws but still accept electronic signatures. So, problem solved, right? Well, not exactly. There are still some problems that hold financial services companies back from conducting all business electronically. These hurdles are not legal, nor do they have to do with technology. The challenges lenders face today is letting go of older, outdated technology. Until they do, they will be unable to fully grasp the next phase in our industry's evolution. The Power of the eMortgage M ortgage industry veterans have heard about the ben- efits of the eMortgage so many times they have become part of industry lore. No one who is serious about improving their mortgage business can ignore the call of the digital mortgage. It will save them time. Paper takes a lot of time, whether you're buying it, stuffing it into printers, collating it into files, making cor - rections on the documents, stor- ing them, or trying to find them once you do. Paper is incredibly expensive, which is why so many companies went paperless—at great expense—by installing scanners and double monitors throughout their enterprises. It will save them money—hun- dreds of dollars per loan. All of the costly functions listed above have to be done by someone. When electronic files zip back and forth, technology handles all of that. While there are tick charges associated with some functions, the cost-savings enjoyed by lenders that go electronic are huge. It will make compliance with new industry regulations easier. The CFPB's TRID rule was the first really good example of how tech- nology would become an essential element for regulatory compliance. Many experts have made it clear that without the right technology, demonstrating to the CFPB that the lender is employing a TRID- compliant document solution will not be possible. Therefore, the more electronic our operations become, the easier it will be to demonstrate compliance. It provides a much, much better consumer experience. Instead of having to make an appointment to appear in someone's office to wet-sign a stack of mortgage documents in front of a notary and then wait around for the key documents to be couriered down to the Courthouse and entered Endorsing the eMortgage Many lenders have gone the "paperless" route, but is that really the same as a true eMortgage? By Rick Triola

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