Why Should Lenders and Title Agents Choose eClosings?

Many lenders are starting to offer online mortgage closings, also known as eClosings.

eClosings provide a host of benefits for lenders and title agents. In fact, our recent study with MarketWise Advisors shows that a full eClosing can provide up to $444 in savings per loan for lenders and about $100 ROI for title agents. Add that up across every closing and the return becomes very compelling.

The ROI benefits come from a few elements:

• Time and labor savings: With fully-digital closings, documents can easily be created, updated and signed without hours spent in front of a copier or fax machine.
• Error reduction: With the ability to review and update documents digitally, closing documents are less prone to errors or missing signatures.
• Faster cycle time: With all elements of a closing online, lenders are able to close and sell mortgages faster.

But there are other improvements that eClosings provide. Homebuyers, lenders, and title agents also benefit from the convenience and flexibility that comes with eClosings. A fully-digital closing allows the transaction to close remotely, meaning someone could close while abroad, at work or on vacation. 

The convenience of eClosings is part of a wave of digital transformation taking over the real estate industry. The majority of consumers bank online, and they are coming to expect that lenders will offer online options as well. Lenders with eClosing options will appeal to a wider customer base and have the opportunity to receive referrals from people who appreciate the online option.

How to get started with eClosings

As with any digital transformation, it takes time to get buy-in, implement new processes and make adjustments. The good news is that lenders and title agents can ease into eClosings and still reap the benefits. For example, a hybrid eClosing allows for documents to be signed online, but still requires an in-person meeting for the remainder of the closing requirements.

The first step towards reaching a fully-digital closing is to move all paperwork online. With digital documents, it’s easier to make edits and correct errors. Online documents also reduce time spent faxing, copying or mailing.

Once documents are digitized, you can take the next steps toward full digitization:

• Enable eSignatures: Once documents are digitized, lenders and title agents can implement eSignatures, which allows their clients to sign documents electronically.
• Choose online notarization: By selecting an online notarization partner like Notarize, you can remove the need for borrowers to appear in person to notarize a document.
• Select an eClosing platform: This allows lenders to share information with title agents, realtors and homebuyers. The software keeps documents and information organized, safe and secure, and enables faster mortgage processing.
• Enable eNote and eVault: Often the last step to a full eClosing, the promissory note needs to be signed and certified according to specific requirements.
• Share wins: Everyone will need to be brought on board for an eClosing to work. This will require successful change management and sharing early wins (time saved, positive customer feedback, error reduction, etc.) to showcase the value of eClosings.

Create long-term success with eClosings

With so many transactions moving online, eClosings are on their way to becoming the norm. Digital documents, online notarizations and eClosing software can provide more efficiency, more flexibility and quicker time-to-close. These benefits, along with improvements to the customer experience, make eClosings an important part of the future of mortgages.

While there may be some bumps along the way as stakeholders get used to new processes and new software is implemented and integrated, the ultimate improvement to ROI and customer satisfaction will make the extra work now well worth it.