Freddie Mac has always been at the forefront of automation and aims to keep its top spot
Today, eMortgages and electronic closing documents are a far cry from what they were when Freddie Mac first started accepting them.
One shouldn’t forget that as recently as five years ago, paper-based verifications, in-person closings and a lack of industry data standards were still widespread in the mortgage industry.
The journey towards greater automation certainly hasn’t been smooth. For example, the Great Recession slowed the pace of technology while the mortgage industry took stock and assessed its broad impact. Conversely, during the COVID Pandemic with lockdowns in effect, electronic closings in the mortgage industry received a vital push forward making eNotes ubiquitous today.
The experience certainly proved transformative for both mortgage professionals and the public at large.
According to a recent survey by fintech Finastra, a whopping 81% of consumers, who represent an increasingly tech-savvy and digitally dependent generation, now expect an option to electronically sign loan documents. It’s no surprise then that eMortgages are increasingly the norm across the US.
Throughout this time, Freddie Mac has been at the forefront in the push for change, having introduced much of the automated technology and innovative solutions to enable remote electronic closings.
Lenders are now able to conduct fully paperless closings in more states than ever before. In fact, more than 180 of them have rolled out eMortgages to date.
It’s an unstoppable trend.
eNotes can be signed in any U.S. state, while eRecordings – the act of registering recordable documents electronically – are accepted in the vast majority of the nation’s counties, with 42 states and Washington, D.C. having already passed laws to allow remote online notarization.
Aside from saving time and money for the consumer and making the homebuying experience seamless and straightforward, mortgage professionals benefit from reduced operational costs and shortened delivery times for both the secondary market and investors. And as data can be extracted directly from loan documents, the potential risk for human error is drastically reduced.
Moreover, contrary to many myths and misconceptions, Freddie Mac accepts a combination of printed and electronic versions of loan documents, so the customer has a choice and is not forced to adopt an ‘all or nothing’ approach.
Freddie Mac has spearheaded the industry’s digital mortgage journey, helping to define standards in the industry, and positioning itself to provide support across the mortgage ecosystem, while improving efficiencies across the board.
It’s an ongoing journey but one that will soon enable a true digital mortgage.