Automation & Technology
Keep it simple: The one piece of eClosing advice lenders need to know
By: Nancy Alley, VP of Product Strategy, ICE Mortgage Technology
We know that researching, selecting, and implementing a successful eClosing solution is far from simple. And today, the demand for eClosing is higher than ever before, especially as the need for a socially distant closing process continues to grow. But while demand is high, that’s just the tip of the iceberg when it comes to actual industry adoption.
Many organizations are on their way to implementing an eClosing solution and according to a recent study by STRATMOR Group, over 40% of lenders had hybrid eClosing technology in place by the end of 2020, which is a great milestone. However, only 12% of them had achieved over 75% adoption among their users. So, what’s causing the disconnect between having eClose and using it? After drilling down further, user adoption, as well as a lack of IT and implementation resources, were cited as leading causes.1
Along with the need for more available resources, there are other factors that come into play. A big one is that a lot of vendors are unable to deliver an end-to-end eClosing process on their own. Lenders often need to partner or work with multiple vendors to achieve their eClosing vision. Not only does this add complexity, but it also means that lenders must learn one or sometimes multiple new systems, which can cause frustration and resistance. Another crucial piece of the adoption equation is change management. Getting your organization ready and able to shift to a new eClosing process takes a lot of planning and organization because in order for it to be successful, you have to ensure your entire organization is onboard.
Combine all of these factors with the record volume of 2020 still going strong into this year and a major compliance change with URLA this past spring, it’s no wonder teams are finding it difficult to accept change and commit to a new way of working. So, though there is a high demand for eClosing solutions, we do have to recognize that there can be adoption pain or challenges.
In terms of borrower preferences, according to ICE Mortgage Technology’s recent Borrower and Lender Insights Survey, 63% of consumers surveyed in 2020 would prefer an online mortgage process when buying a home or refinancing, compared to a traditional in-person process. On top of that, 58% of consumers surveyed said the availability of digital solutions offered during the loan process would likely impact their lender decision. So, in order to meet the expectations of today’s borrowers, it’s more important than ever to start considering how and when you are going to implement eClosing and make an organized plan for success.
For ICE Mortgage Technology, our vision with Encompass® eClose is to keep it simple and we’re accomplishing this by being our customers’ one partner, one workflow, one source and one network.
One partner: ICE Mortgage Technology has all of the pieces in place to deliver on the promise of a digital mortgage. Getting everything from one provider or one partner creates simplicity for the lender and a consistent borrower experience.
One workflow: The fact that lender users can be adoption blockers is surprising. Our vision is to keep users where they’re comfortable and essentially have one workflow from document draw to investor delivery, all of which can be done in Encompass, a system that many lenders use every day. Being in just one system not only reduces adoption friction, but also keeps the process simple by treating loans alike. Whether a lender is drawing a full eClosing, RON, or ink package, the process will be familiar, with one workflow for all loans. What’s more, settlement agents can pick up all of the lender's loans from ink to full eClose the same way, every time.
One source: By having data from one provider and one system, lenders are better able to trust the data, creating operational efficiencies. By not having to take the time to try to reconcile data between two or more systems, lenders are able to retain a high level of quality control.
One network: ICE Mortgage Technology offers one of the largest ecosystems of lenders, settlement agents, counties, servicers, and investors, all together in one place. This is especially beneficial because with these integrations already established, lenders can quickly find the right partners that are already up-to-speed and implement their technology in order to grow and scale their business.
Whether your business is planning on starting out with a hybrid approach or is ready to go full eClose, it’s important to look at this shift as not another technology project, but a new way of doing business, with a large focus on change management. With ICE Mortgage Technology’s Encompass eClose, lenders can alleviate many adoption challenges by eliminating the need for multiple systems or providers, which can not only lead to a confusing user and borrower experience, but also inefficient processes. Instead, our solution is on one platform, which in turn, creates simplicity and ultimately a faster, easier homebuying experience.
Want even more advice on how to achieve digital closing success? Check out the new checklist for the 5 steps you need to take when implementing an eClosing solution.