Paperless mortgages may be here sooner than previously anticipated. Traditional mortgage lending is transitioning into a major shift in process as more tech-savvy millennials purchase houses and new regulatory changes such as the TILA-RESPA Integrated Disclosures rule (TRID) are put into effect. As the industry moves toward a more digital approach, eDocument Solutions is here to help.
A 2016 survey from Xerox showed that lenders and potential borrowers are showing signs of moving to a completely digital process, perhaps sooner than the industry may think. The 11th annual Xerox Path to Paperless Survey found that 92 percent of mortgage experts expect to see an increase in electronic methods for loans because of the TRID rule.
The report also showed that 51 percent of mortgage professionals believe that all mortgage loans will be closed electronically in four years or less, up from 33 percent in 2015. Those surveyed also outlined what they believed to be the biggest benefits of going paperless:
- 66% say this would accelerate the closing disclosure process
- 63% say this would accelerate the document delivery process
- 59% say this would decrease processing time and lower the cost per loan
In December 2016, several loans were processed completely digitally in Massachusetts. However, they were not the first successful implementation of a digital system. The growth of electronic mortgages has been slow, partly because there are few warehouse lenders that can handle these transactions. Rarer still are completely paperless loan processes that combine an electronic closing with an electronically signed promissory note and deed of trust.
While the acceptance of this process has been slow, full industry adoption could revolutionize the home buying process. Where a traditional mortgage can take up to 16 days to process, electronic loans can be completed in as little as 3 days, saving valuable time for all parties involved, therefore increasing revenue for the mortgage lender.
Millennial digital purchasing habits are a huge incentive for electronic mortgages to become more mainstream. Millennials currently represent the largest group of buyers in today’s housing market. 51 percent of survey respondents indicated that they have already implemented new technologies to appeal to this generation.
In addition to the implementation of electronic processes, the Xerox survey found that there are other steps mortgage companies can take to attract millennial homebuyers:
- Social media presence
- Consumer portal
- Recruiting programs targeting college students and recent graduates
- Loan programs targeted toward millennials
In anticipation of this change in the mortgage industry, eDocument Solutions developed Guidance™ Mortgage Solutions. With many years of experience in the business process and document management arena, eDocument Solutions saw the requirement for the Mortgage Industry to have a solution that could expedite the loan processing from the front end receipt of documents through the export of documents to investors.
Here are the key features that set Guidance™ apart from other options:
- Automatic indexing of documents into your business’ defined document and category types
- Automatic organization of both your and your investors’ loan stacking order thereby automatically reducing labor handling and expediting both processing, submissions and shipping of documents
- With the Guidance™ Extraction module, you can perform key data extraction and importation into your loan origination system or QC system
To learn more about how eDocument Solutions can assist with taking your mortgage company digital, set up your free analysis today!