The answer may lie in a hybrid model
When the pandemic struck, many mortgage lenders across the country began a process that’s been talked about for years: the adoption of eClosings. Talked about so long as a ‘nice to have’, the ROI calculation for many lenders wasn’t there over the past decade. They could do business on paper, as they always had done, and there wasn’t a driving need to realign their processes, even if some of the biggest lenders were getting on board.
The pandemic upended that and now eClosings are a ‘must-have’ for any lender. If the ROI calculation has swung during the pandemic towards eClosings, though, a new question arises: will eClosings be worthwhile in a post-pandemic world?
To find out, MPA spoke with Michael Chaney (pictured), national sales manager at DocMagic. He explained that eClosings will likely remain an essential part of any mortgage lender’s operations for years to come. The functionality they offer in terms of customer experience and scalability into markets where a lender might not have a physical presence, along with the contingency they represent in the face of another significant interruption, has already proven its value. Even for those lenders looking to return to a more in-person process, he explained that a hybrid eClosings model could prove to be the ideal solution.
Adopting eClosings takes an investment of time and effort, however, Chaney believes that the technology has become absolutely essential. The ROI calculation, in his view, is pretty simple.
“Nobody knows what the future is going to hold,” Chaney said. “DocMagic has become so much more valuable to a lender now because another pandemic could happen at any point. We’re already hearing about strains of the virus that could prolong the pandemic. Everybody is focused on having this workflow at least configured and ready to go because they cannot have a stoppage of business ever again. It can’t happen.”
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While big banks aren’t necessarily buying e-notes yet, Chaney explained that self-servicing lenders working with Fannie and Freddie should be ready to move on e-notes now. Moreover, he explained upfront that eClosings doesn’t automatically mean e-notes. Digitizing other core elements of the process can help mortgage lenders move faster on individual loans and scale more widely geographically. That’s where the hybrid model comes in.
It essentially digitizes the less important aspects of the closing process while leaving only the most essential documents to wet signatures. That model, Chaney explained, takes less time to train on and less overhaul of existing processes on the part of lenders. It also adds the feeling of security to a lender and borrower through tactile trust in a paper process.
The hybrid model too, will allow a far better customer experience, giving them the ability to review every document and ask questions up to the minute. That, in turn, will generate better referrals around how easy the lender was to work with. The digitized process, too, makes for a far cleaner closing meaning everyone’s happier at the closing table. Customers and mortgage professionals have shifted their expectations around digital service throughout the pandemic. The closings process is not exempt from that shift.
Switching to eClosings sounds like a daunting undertaking for many lenders. Chaney doesn’t mince words about that. He explained that overhauling so many lending processes to accommodate an eClosings platform like DocMagic can sometimes feel onerous for a lender. Yet by taking a more graduated approach through the hybrid model, some of those pain points can be minimized while the initial benefits are being felt.
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In the short term, Chaney explained, these tools are becoming essential to ensure that neither this pandemic, nor a new unforeseen catastrophe, forces another interruption in business. In the long term, eClosings will offer scalability and levels of client service that are very likely to be the norm in the mortgage industry. He explained that any lender looking to get ahead of the industry needs to look closely at how a hybrid eClosings model can serve them in future.
“DocMagic’s got the enterprise platform that has everything that you need for a fully electronic process, but it’s also scalable from a hybrid level,” Chaney said. “It gives lenders that comfort factor of approaching the process on their own timeline. You won’t get this from another vendor, either. So many platform providers are just covering one part of the process but DocMagic owns it from cradle to grave. That’s so important to have as you look to take the next step in your business and ensure you don’t lose time ever again. Having a vendor that can provide this service from the start and can scale along your timeline is essential in today’s market.”