A recent report from Fitch Ratings cast doubt on the widespread adoption of eMortgages and eClosings in the short term. But one company is hoping its new product offering can help speed that transition, with a focus on helping settlement agents along the way.
In the report, Fitch said it acknowledged industry enthusiasm for eMortgages, but that widespread adoption “remains several years away,” slowed by several obstacles.
“This process only works within the counties and states that have the laws and infrastructure to support eMortgages (including electronic notarization). Approximately 30 states and 60 percent of counties across the U.S. can currently support eMortgages,” the report stated. “Fitch expects eMortgages to gain traction as the industry becomes comfortable with their enforceability.
“Adoption in the non-agency space is slowed by the limited number of originators and servicers that have the technology to support eMortgages. Fitch has found that a primary deterrent to adopting eMortgages is the cost to develop or acquire the technology required to originate, process and store eMortgages.”
Into this arena, eOriginal recently announced it was launching ClosingCenter, a cloud-based platform created to deliver “a simple and intuitive closing experience for lenders, borrowers and settlement agents.”
Chief Product Officer Simon Moir told The Title Report the platform was created with settlement agents at the center.
“We built ClosingCenter from the ground up for the settlement community to use in the field. We engaged with settlement agents,” Moir said. “First American, Title Resource Group, and others have announced their support because they believe in it, but it’s simple for anyone to use.”
Moir said the goal is to simplify the process, thereby making it more available to all players within the transaction.
“Our focus is around making digital closings more simple,” he said. “There’s a lot of complexity that can be brought into a digital closing process that you doesn’t need to be there. The lender and settlement provider need a simple platform for digital settlement communication to allow a digital closing to occur.”
Among the pain points eOriginal identified was the way in which lenders – particularly on the smaller, community side – used different portals to conduct originations and closings. That left settlement agents having to work not just with multiple lenders, but multiple technology platforms as well.
“We wanted to make it easy to do a digital closing without a full portal, so we limited, on purpose, some of the capabilities to make it accessible to everyone,” Moir explained. “We started just with the note, and then we were able to expand that to the note and other lender documents, being very mindful not to bring the added complexity.
“For settlement agents I think there was a little bit of fear of the unknown – were these technology platforms going to replace me? I think that makes it even more important to spend time committed to doing our homework on how to best help the settlement agents.”
Moir said the initial feedback had been positive, particularly from one of the first lenders to sign onto the program, Fairway Independent Mortgage Corp. But eOriginal also had been mindful that it wanted to keep ClosingCenter as accessible as possible for as many as possible.
“It’s hard for a technology vendor to deliver one perfect solution that works for every customer and their individual needs, so we added additional integrations/extensions on top of the product,” he said. “We understood that RON (remote online notarization) might be an intended use, so we have providers such as Nexsys and Notarize fully integrated into the system. ClosingCenter is also very open from a doc perspective, from an LOS perspective, to make it very easy for the lenders.”
The efficiencies which can be gained through streamlining the process for conducting eMortages and eClosings could be the key to faster adoption, Fitch said in its report.
“While obstacles exist for eMortgages, the technology promises faster closing times, decreased closing costs, instant document delivery and ease of note transfers. Although only a small percentage of GSE production currently uses this technology, the driver for increased operational efficiency is expected to pressure greater acceptance across the industry,” the report stated. “The electronic process implemented by eMortgages could be readily used by banks and other institutions that seek to employ distributed-ledger technology in mortgage origination and securitization.”