As the digitization of mortgages continues at its breakneck pace, e-closings remain one of the most effective, innovative, and popular time-savers the industry has come up with in recent memory. E-closings have shaved hours off the notoriously tedious closing process, allowing borrowers to get on with their lives and loan officers to get back to work.
But according to Mike Seminari, director of MortgageSAT at STRATMOR Group, a successful e-closing isn’t one that simply saves time. Consumers may be looking for the kind of wham-bam, let’s-get-this-over-with convenience they get when shopping on Amazon, but Seminari’s research suggests that borrowers respond best to the e-closing process when their LOs are active participants willing to step in at the first sign of trouble.
“An originator’s primary role at the closing is to be a source of grounding for all the live wires at play,” Seminari writes in a recent blog post for STRATMOR. “Whether it’s the borrower’s nerves, a late closing package, unexpected numbers, or inaccuracies on the documents themselves, a loan officer can answer questions and make phone calls to verify and clarify details.”
Seminari says a loan officer’s presence at closings can also prevent the associated lender from being blamed if any issues arise. If the LO is the only party not present at closing, while the seller, borrower, real estate agent and title company are all seated around the table, who, Seminari wonders, might be the convenient person to blame?
One thing a loan officer’s presence can mitigate is the damage done to the borrower-lender relationship by the discovery during closing of unexpected rates or previously undisclosed fees. STRATMOR found that when a borrower is taken by surprise by their fees or rates at closing, the LO’s Net Promoter Score plummets from 80 to 16. Things get even worse for lenders – a drop in NPS of 81 points –when inaccuracies are found on closing documents.
Seminari suggests three strategies loan officers can use to ensure their e-closings are both convenient and satisfying for their clients:
1. Schedule a separate time to review closing documents. Once e-closing docs become available, Seminari says an originator should schedule a time with her borrower to review at least the Settlement Statement and the note.
“If there are going to be any questions or confusion, it will likely involve one of these two documents,” he says.
2. Attend the walk-through. Seminari’s advice is for originators to attend a borrower’s final walk-through once COVID-19 precautions are relaxed enough to allow them to do so. He says face-to-face interaction is “a critical component in garnering referral business, with the borrower and the real estate agent(s) involved.”
3. Attend closings virtually. Seminari says five percent of closings in July and August included an LO attending by some virtual method, such as by phone or FaceTime. He says the NPS on loans with either virtual or physical loan officer attendance was the same in both cases, a shining 91.