Automation & Technology
The rise of eClose in a rapidly changing world
By: Rebecca Frisbie, Senior Product Manager at ICE Mortgage Technology
eClose has been on the mortgage industry’s radar for years, but until recently, for most it wasn’t a top priority. So, what’s changed? Well, hello 2020! When the coronavirus pandemic hit, interest rates plummeted, and the mortgage industry exploded with new business. As a result, lenders scrambled to close loans in the midst of sweeping stay-at-home orders. As eClose gained the spotlight, lenders began to explore digital closing options. However, with so many moving parts and considerations, few lenders knew where to begin.
Over the next few blog posts, we will be sharing insights from a new eBook, The Modern Lender’s Guide to eClose, brought to you by the experts at Falcon Capital Advisors and ICE Mortgage Technology. In this post, we’ll touch on some common misperceptions related to the eClose landscape.
eClose Facts vs. Fiction
Although Fannie Mae, Freddie Mac, and MISMO have championed the adoption of eClose for years, confusion still exists around what eClose really is. So, let’s fact check some of the most common misconceptions:
“eClose is an all or nothing proposition”
In reality, eClose comes in a number of forms, depending on which areas the lender serves, local regulations, and levels of risk tolerance. According to Fannie Mae: “An eClose is the act of closing a mortgage loan electronically. This occurs through a secure digital environment where some or all of the closing documents are executed and accessed electronically.” In short, how eClose is implemented is up to the mortgage lender, who has the power to determine how ‘e’ they want to go, based on their market and unique needs.
“eClose is a technology play”
While technology certainly plays a role here, digital mortgage closings are really about process engineering. The move to eClose impacts a number of different internal departments, vendors and trading partners. So, while technology certainly supports eClose, it is important to consider the operational process changes that will be necessary to achieve a successful eClose implementation.
“eClose is so simple, we can go all in right away”
Some lenders decide to aggressively move forward with eClose , without taking the time to review all of the related details at the local level, or even on an individual business level. Thus, it is important to assess and manage the overall impact of digital closing before diving in.
“eClose is too difficult to ever work”
Where some lenders may think eClose is easy, others see it as a massive challenge. eClose does involve the close coordination of a variety of organizations that will perform different parts of the transaction at different times. However, with a well-planned, well-researched strategy, lenders can capitalize on the opportunity and offer their borrowers a better experience.
There’s much more to learn, so download the full eBook now, to gain insights on how to plan and implement the best eClose strategy. The eBook also includes a handy checklist to help you get started.
Also, remember to register for Experience 2021 to access exclusive content, participate in live Q&A sessions, and connect with peers along their eClose journey.