Since the emergence of COVID-19, mortgage lenders have arguably never confronted more rapid and fundamental change. Almost overnight, the COVID-19 pandemic and the need for social distancing has turned mortgage closing on its head. Suddenly a highly paper intensive, face-to-face process needs to be digitally enabled.
For many lenders, remote online notarization (RON) appeared to offer a turnkey panacea. However, RON is only part of an end-to-end digitized mortgage process. While COVID-19 represents a tipping point in digital adoption, outside of temporary executive orders, RON deployment is limited by law to roughly one-half of state jurisdictions. In addition, the settlement community’s state of readiness to support RON through disconnected technologies has limited large-scale adoption to date. For most lenders, RON adoption will more likely be an ongoing journey than a single leap.
These realities have heavily influenced eOriginal’s approach to RON. Rather than forcing lenders into a single RON solution, we recognize the best approach is to maximize optionality; offer access to multiple RON solutions and allow lenders and their settlement partners to select the best-fit solution for every mortgage transaction.
Why? Because at this stage, lenders can’t afford to be locked in to a single RON platform if they want to achieve scale. An open, integrated approach allows lenders to take advantage of best-in-class capabilities while centralizing lender closing operations in a platform that supports every closing scenario.
The Dash to Digitized Mortgage Lending
RON leverages digital technology to complete the notarial process when parties can’t be in the same physical location as the notary. With RON, the notary participates through live videoconferencing with the borrower and notarizes the documents virtually. This approach satisfies the regulatory compliance associated with documents such as the deed of trust that must be recorded.
Lenders have been moving toward RON at a gradual pace as more than 20 states have enacted legislation enabling remote notarization. Still, in 2019 more than 99% of U.S. residential mortgage closes were completed in person using in-person notarization of paper documents.
COVID-19 has fast-tracked RON adoption. Mortgage lenders know they need to adopt RON if they want to enable truly contactless end-to-end mortgage closings. Lenders also envision fully digitized business processes where automation enables them to meet and exceed customer expectations and gain competitive advantage.
Mortgage lenders with ‘RON-first’ digital adoption strategies may not realize the benefits of digital that can occur outside of RON. Stand-alone RON solution platforms may preclude hybrid closing scenarios and require more complex integration with both upstream and downstream partners including loan origination, document preparation, and eVault solutions.
The RON You Need Now
There is a better way, a thoughtful, systems-wide approach to digital mortgage technology adoption. Lenders require a robust platform that supports digitization of mortgage lending from application through approval to closing. And to be effective, that platform should offer best-in-class RON capabilities.
A digital closing platform with multiple integrated RON providers enables lenders to select the RON solution transaction-level characteristics. That way, lenders can support every closing, from full paper to hybrid to full digital.
ClosingCenter provides a simple, complete and efficient closing experience for lenders, borrowers and settlement agents. ClosingCenter is built on an open foundation enabling integration with multiple doc –prep providers, RON providers and other solution extensions.
The pandemic narrative is still unfolding, and its impact on mortgage lending will continue to evolve. But there’s no question mortgage lenders are accelerating their digital transformation. The most successful organizations will integrate RON in a way that meets their needs today – and enables their digital evolution in the future.
Want to learn more? Explore our valuable content and insights on RON, ClosingCenter, and other aspects of digitized mortgage processes.