Ask the eClosing Team: What are current trends in eClosing adoption?
Welcome to Ask the eClosing Team, an ongoing series where DocMagic’s eClosing pros tackle real questions that we’re hearing from lenders. Today’s responses are drawn from a recent interview with eClosing Team member Leah Sommerville. We’ll be sharing some more exciting insights from Leah in an additional article next month.
Leah Sommerville, DocMagic’s Sr. eServices Account Exec and an expert from our eClosing team, sat down with American Business Media, publishers of National Mortgage Professional, at the 2023 New England Mortgage Expo to talk about the current state of digital lending. Watch the full interview here.
The Journey To Widespread eClosing Adoption
Below are some additional responses Leah provided on the topic:
Are we still seeing eClosing adoption?
The National Association of Realtors confirmed that 97% of buyers shop for their homes online and more than half of buyers ultimately purchase their homes online. Lenders are embracing eClosing to meet borrowers’ expectations of a digital closing experience. They are realizing that it doesn’t make sense to employ a paper process during the last touch point they have with borrowers… the closing table.
What are the specific benefits driving eClosing implementation?
Borrower expectations, eNote acceptance, and the evolution of eNotary legislation have persuaded many lenders to embrace eClosings. Loan originators appreciate eClosing’s opportunity to allow all participants to review the entire closing package (as often and as long as they’d like) in advance of closing day, provide the borrower a 15-minute closing experience, streamline the closing for all stakeholders (including the Settlement Agent’s automated invitation with access to their eClose console, which includes the entire closing package and opportunity to add title docs for eSignature), eliminate shipping/printing costs, and offer immediate access to all documents post-closing to expedite funding.
Are eClosings a fad?
Absolutely not. Is shopping for homes online a fad? Nope again. 87% of lenders agree that eClosing is faster as well as cheaper than traditional closings.
Almost all lenders are offering Hybrid 1 (eSigning, paper note, paper notary) eClosings at a minimum because there is no impediment to adoption. Hybrid 1 eClosings are very similar to eSigning the initial disclosure documents, which most lenders have already implemented. Hybrid 1 eClosing is possible in every state and for every loan type, and is supported by all secondary market participants. We’ve also seen increased volume for eClosings, which include eNotes, as the GSEs, Ginnie Mae, and the Federal Home Loan Banks began funding eNotes in the last several years. Last, but certainly not least, COVID and the constraints on personal interaction affected almost all real estate closings in the past several years—drastically evolving eNotary legislation. In fact, there are now only 2 states that don’t allow for eNotarization.
As long as consumers expect digital experiences and lenders continue to save $444 per loan with RON (Remote Online Notarization) and eNotes, eClosing is here to stay.
As Leah mentioned in the interview, demand has pushed the industry to a place where lenders who want to future-proof their business should provide a digital closing experience. Borrowers accomplish so much online—even borrowers who aren’t traditionally viewed as part of a tech-savvy demographic.
Digital closings are faster, cheaper and more convenient. They are, unequivocally, the future.
To talk to Leah or any of our other experts about eClosing adoption, send them an email at eClosingTeam@docmagic.com.
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