Could eClosing be Coming Sooner than We Think?

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Know Before You Owe Forum

On Wednesday, August 5, at 1 p.m. EST, the Consumer Financial Protection Bureau (CFPB) will be hosting a forum on the “Know Before You Owe Initiative” on eClosing. The event is open to the public and can be live streamed from the CFPB blog.

As part of both the forum and an industry roundtable, Director Richard Cordray, alongside consumer groups, industry representatives and members of the public will address the eClosing pilot project to improve the real estate mortgage closing process through the use of technology. This forum serves as a continuation to an April 2014 forum, where the CFPB presented its plan to shift the mortgage industry toward an electronic mortgage closing process.

As part of the forum, eOriginal President and CEO Stephen F. Bisbee is included on the industry roundtable discussion from 3 to 4:30 p.m. at the CFPB headquarters, following the public forum portion.

Understanding TRID

The CFPB’s TILA-RESPA Integrated Disclosure (TRID) requirements have been making a sweeping impact on the real estate market. The integration rule requires lenders to provide additional mortgage disclosure forms and develop a more complex compliance workflow structure.

When implemented, the CFPB believes the TRID rule will transform the mortgage process, making buying a house a much more understandable process for the consumer. The newly added Loan Estimate and Closing Disclosure forms provide consumers with more time to review the total costs of their mortgage.

While many businesses have been preparing other the past month, the deadline of October 1, 2015, is still being met with anxiety – and that is even with the proposed amendment to delay the start two months. Not only are the summer months typically the busiest for the real estate market as a whole, but should a lender not make good-faith efforts to comply with the deadline, the lender would not be able to complete any mortgage lending transactions.

At eOriginal, we’ve always worked hard to understand and respond to regulatory pressures facing our clients. It is one of the reasons the SmartSign® solution provides a secure, auditable method to deliver documents to remote participants.

For example, eOriginal recently coordinated with partner FIS on its eAcknowledgement, a module within the FLO application that satisfies the TRID and TILA/RESPA requirements of electronic delivery. By leveraging the functionality to the eOriginal solution, the end user has the ability to provide auditable receipt of disclosure documents and acknowledgement of a customer’s intent to proceed, overall reducing closing times.

The Future of eMortgage

It comes as no surprise that CFPB’s TRID regulations has the consumer’s best interest in mind. But, the protection bureau is very well aware that lenders could be doing more. With the growing global trend of taking all possible processes digital, the future of completing your mortgage digitally seems like a logical next step.

For anyone who has gone through the mortgage process, the thick stack of documents that are presented at closing for signature can send any person, whether or not you are an environmental advocate, into shock.

So, if you are like me, when purchasing your house, you probably immediately thought – why are these documents not presented to me digitally? Not only would it provide for easier signature capture, but the document processing for the lender would be much smoother.

Being a participant of this week’s upcoming CFPB Forum is just one step toward the digital transformation of the mortgage industry. We are excited to be a part of a monumental technological shift.