eOriginal was recently joined by mortgage industry veterans Teri Pansing, VP of Corporate Closing at Fairway Independent Mortgage and Dennis Pospisil, SVP Digital Settlement Technology and Escrow Support at Republic Title of Texas for our webinar, “Bridging the Lender and Settlement Divide in a Digital World.”
In preparation for that webinar, we realized the 60 minutes allotted did not provide enough time for Teri and Dennis’s valuable insights and decided to cover a few of the questions we did not have time to address in this blog article.
To view the webinar, please visit the on demand sign-up page here.
eOriginal: What barriers do you see standing in the way of a completely digital real estate experience?
I think engagement and adoption across the industry is crucial, but certain barriers may exist, like having the necessary equipment to support the adoption of digital mortgages. For example, consider escrow agents using a mobile notary. Are they prepared, willing and ready to take digital closings on the road with them? Has everyone (and I do mean everyone) involved in the closing had the required training? Are they setup in the system with logins, etc.?
The other thing that concerns me is the existence of multiple platforms. Is that scalable for settlement companies? Are settlement companies willing to receive transactions across multiple systems?
On a different side of the transaction, are loan officers willing to adopt and change what the closing experience and celebration will look like? Will they partner for the future by thinking about what they want the closing experience to look like in the years to come?
These are a few of the questions I believe the industry should consider as we move into this digital era.
Many people subscribe to the “if it’s not broken, don’t fix it” philosophy, but sometimes it is about making an existing way of doing things better. To continually be relevant in the market, you have to ask, “Can we make it better? If so, how?” I don’t see enough mortgage professionals focusing on those questions.
There are other barriers directly related to finances. For example, some settlement companies are not setup properly for high speed internet nor, in some cases, do they possess technology like tablets, laptops, and/or other items that are necessary to conduct a completely digital closing.
Lastly, there are practical barriers unique to our industry, such as legislation and the county clerks’ offices in the areas we serve. Does your state have legislation in place supporting remote online notarization (RON)? Does your state have legislation in place supporting the papering out of eSigned recordable documents? What about the steps necessary to bridge the traditional method of recording with the non-traditional method of eSigning?
Unique barriers are going to exist outside of these thoughts, so those interested in supporting digital closings must identify and work through them one at time.
eOriginal: What do you think is on the horizon? How about 5 to 10 years from now?
First, I think we’ll see additional RON legislation in various states. We are still at the beginning of this new digital age and several states still don’t have legislation in place to allow remote online notarization. You also have some states with RON legislation in place but with a few key elements still missing or being worked on, like a “papering out” bill. As an example, Texas should expect a “papering out” bill to pass very soon, as early as September 2019.
On the seller side of real estate transactions, I see RON making a shift towards a new and more convenient experience. The borrower side is probably heading in that direction as well, but from a settlement agent’s perspective, we’ll have to see how each of our lending partners adopts the concept of digital settlement, since it isn’t something we can control.
Then we have AI, or artificial intelligence, and machine learning, which are big ticket items beginning to play a role in the life cycle of the real estate transaction. They are still some time away, but it’s fascinating to read about all the work and projects already underway.
To help the readers understand the interplay a bit better, consider AI as the broader concept of machines being able to carry out tasks in a way that we would consider “smart.” Machine learning is a subset or current application of AI based around the idea of providing machines access to data and letting them ‘learn’ for themselves. Within our space, we are already seeing some of the large-scale real estate sites using AI for home or rental recommendations.
I agree with Dennis’s comments. At Fairway, the experience delivered to the consumer is critical, and we see settlement agents as a crucial component to ensuring that experience is positive, both now and into the future.
The mortgage industry is moving quite quickly. On the one hand, you have the proposed Uniform Residential Loan Application (URLA) changes that are happening, and on the other hand we see many different investors, programs, and products available, so it takes a lot of effort just to keep up with our market. Then factor in the Ginnie Mae offerings and the move toward digital transactions, and it’s clear that this is an exciting time to be in mortgage!
eOriginal: Where can others go to learn more about digital mortgages and lender and/or settlement agent best practices?
They’ve already found one resource, this blog article. Others worth visiting include:
- Mortgage Bankers Association (https://www.mba.org/audience/state-legislative-and-regulatory-resource-center/remote-online-notarization)
- MERS (https://www.mersinc.org/products-services/mers-esuite/eregistry/eregistry-participants)
- Fannie Mae (https://www.fanniemae.com/singlefamily/emortgage)
- Freddie Mac (https://sf.freddiemac.com/working-with-us/electronic-loan-documents/emortgages)
Adding to the list that Teri provided I’d say the following are good resources:
- American Land Title Association (https://www.alta.org/advocacy/online-notarization.cfm)
- Texas Land Title Association (https://www.tlta.com/TLTA/TLTA/Resources/digital_closing_resources.aspx)
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