Mortgage Settlement Services and E-closing Platforms

Mortgage Settlement Services and E-closing Platforms
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Even when both parties are on the same page, a mortgage settlement services provider has a key role to play in compliance testing and settlement. The role of a title and settlement agent is often overlooked with the adoption of e-closing and e-mortgage. Cost to originate and compressed margins have changed lenders’ approach to digital mortgages. Both lenders and agents have shifted to hybrid e-closings and other digital mortgage strategies. 

Customer Experience 

Mortgage lenders and settlement agents are in quest of digital mortgages not only to increase efficiency and decrease operating costs but also to improve customer satisfaction. There is a perception that the title industry is “outdated” or “old school”. Title and settlement agents can solve many issues by leveraging technology and driving innovation.       

For example, an agent offering mortgage settlement services can safeguard consumer funds by using wire-fraud-prevention technology. A lender gains significant efficiency with an e-closing platform. Borrowers don’t need to find a witness if the lender uses e-sign ancillary closing documents. This allows the completion of the closing ceremony within minutes. The lender can conduct more closing each day. Improved efficiency means more cost savings. This reduces closing costs and/or notary costs. In addition to most of the things being done digitally, shipping expenses are also eliminated. E-recording covers 85% of the American population. This further reduces title and settlement costs for professionals. Missing pages, missing signatures and other errors in the process can add punitive expenses. E-closing also improves customer satisfaction and experience. Consumers conduct financial and other transactions digitally. First-time buyers and/or millennials expect a digital experience. Paper-driven, manual transactions will leave them disappointed. This shows that e-closing is beneficial for everyone involved in the transaction.     

Barriers to Adoption

All parties have a lot to gain when closing becomes digital. However, still some mortgage settlement services providers have not switched to e-closing. There are some challenges in switching to e-closing. Addressing these challenges puts all the parties in a better position. There are many e-closing systems available on the market. This is a hurdle for settlement professionals as lenders choose the system that works best for them. Settlement agents work with multiple lenders using different e-closing systems. So, agents have to learn all the e-closing platforms used by their clients. Moreover, the developers of these platforms don’t give the required attention to mortgage settlement services. These systems are designed to address the needs of lenders. However, settlement agents have to do some tasks manually. They may even have to collect documents from various sources.

Collaborate to Succeed

Lenders can make it easy for settlement agents by providing them with a single entry point that agents can use to access the platform. The collaboration between a lender and a settlement agent is not all about the exchange of fee data. The lender should consider it as a part of the process. This also supports better engagement between the lender and the agent. The lender can also help the agent by eliminating some of the paperwork.

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