Automation & technology

How CrossCountry Mortgage is moving to full eMortgage


Are you working towards a fully digital mortgage experience for your borrowers? This is your chance to see how CrossCountry Mortgage is managing their journey, and how you can take advantage of what they have learned along the way to keep up in this changing market.

In this new podcast episode, Terry Chung, VP of Business Solutions, CrossCountry Mortgage, LLC and Liz Barnicle, Eastern Regional Manager, MERS reveal how eMortgage is changing the face of her organization and delighting borrowers along the way. During the podcast Terry will share valuable insights about challenges, strategies, and results based on first-hand experience.

Welcome to our open house. Instead of examining hardwood floors, closet space, and kitchen layouts, we're taking you on a tour of what's happening across today's mortgage industry. During each episode, we'll hear from industry leaders and subject matter experts to give us an inside look into a hot topic, cutting edge technology, or new trend that can help accelerate your digital journey. Thank you for joining us. Come on in.

Welcome to another episode of Ice Mortgage Technology Open House Podcast. My name is Alyssa Grover and I'm the Senior Director of Product Marketing here at Ice Mortgage Technology. Please join in and listen to this next episode. Well, you'll hear from Terry Chung, Vice President of Business Solutions at Cross Country Mortgage, in an interview by Liz Barnicle, Eastern Regional Manager for MERS.

Terry shares how they're changing the face of E Mortgage in her organization and provides valuable insights about challenges, strategies and results based on firsthand experience. Learn how you can get on the path to success with plans for actions towards a full E Mortgage experience for your organization. Thanks for listening and enjoy.

It is my great pleasure today to introduce Terry Chung with Crosscountry, VP of Business Solutions and to have the opportunity to interview you and to share with our MERS member base the things that we've been talking about for the successes and the hurdles at Cross Country. Terry, one of the things I was so impressed with you is your subject matter expertise. Let me ask you about your background and how that informs Cross Country's E close initiative. I actually am a mortgage banker and my current wall is to really.

Support the strategic initiative with E closing being our top initiative in the organization and very near and dear to our CEO. I am basically supporting all of the stakeholders and the different departments in the loan lifecycle to make this E mortgage digital transformation possible. The grease that keeps that project initiative moving forward is a certainly one way to describe it. Terry, I think your role at cross country has been critical certainly in the times that we saw last year. I want to talk a little bit about who.

Cross Country is as a lender and some of the things that we've talked about, Terry, are the size of your originations and certainly the loan products and the loan programs that you have. Cross Country is a nationwide full service lender. And if you could give us a little bit more color on who Cross Country is as a lender, Terry. So we have many branches and they all have different personalities and different ways that they obtain their business and customers and their needs. We learned pretty quickly that there's different things that are borrowed.

Need and we wanted to be able to provide service to all of the different types of clothing. So we offer hybrid Closings and also full digital Closings in a Ron ceremony. And it was important for us to also serve all borrower types and being able to accommodate every use case. Well you guys have been a long standing MERS partner since 2008 and not only are you a retail originator, you service a large portfolio as well which I think it plays into that E close initiative definitely does. Our relationship with the agencies is vital in the.

Initial phase of transformation to a full digital platform, they've been very supportive of our goals and our initiatives. It's wonderful to have such subject matter expertise on the call with us today and certainly from such an impressive lender like cross country. The agenda we want to share with our MERS members is those members who are looking to expand their E close footprint into the electronic note, the agenda that we'd like to walk through today or what were those primary objectives for cross country, how you overcame those hurdles and how you replicated what went well.

One of my favorite bullet points and certainly key takeaways for our MERS members, the primary objectives for Crosscountry. I'll stop right there, Terry. Tell me a little bit about why you guys look to the E close expansion. Well, initially the directive was to serve the COVID need, the pandemic issues, the lockdown, those were the emergency orders that you know, we had to tend to. But we quickly realized in the process that not all of the requests to close in a full remote online notarization.

Session where everything is electronically signed and digitally notarized. Not everyone was related to a COVID infection or a pandemic related issue. We had some borrowers who were stranded abroad or had to travel for work or had multiple properties and couldn't even get to the closing destination. So just a variety of reasons, but the nearest and dearest would be serving our active military and veterans. Definitely something that couldn't do right away, but.

We strive to continue working on it with Ginnie Mae and trying to make that, you know, a reality for our military. I think that the primary objective and being able to have that superior customer service.

Meeting that borrower need and certainly you know the needs of the multiple branches that cross country serves. I think one of the things we saw in COVID with some of the operational efficiencies with the E Note and I'll ask you as you expanded forward into that E close, what efficiencies did you see right from the beginning? The E Note itself was hands down the most efficient and very instant gratification for us. I'm not having to ship and track a a wet note was a blessing.

Not only was it more secure, it was more expedient and everyone enjoyed the process along the way. I will say that you know, you do need to get a firm understanding of, you know, the E registry, the roles and positions and how to work with each of your trading partners and warehouse lenders to make the process move and be able to track everything. But we benefited instantly from the e-mail process and we wish we could do more and more every day. So the key is to really.

Get a firm grip on your process, but the efficiencies are tremendous. We want to see you do more and more every day too Terry. So I think some of the things that we could share with our group today is not just a magic wand moment when you decide to expand a paper closing into an E closing to meet those two our needs to grab those operational efficiencies, the delivery and the time frame of the transaction changes. You mentioned your warehouse line transactional partners, we're going to talk about those guys. One of the things I really.

Admire about cross country interior initiative peers overcoming the hurdles and it's that subject matter expertise, it's that relationship into the market that really allows you to have the right tool to overcome these hurdles. One of the things we talked about is you know that buy in of the internal and external stakeholders what did cross country experience when it came to the internal buy in. We were very fortunate that it started from the top down. Our CEO, this was his request of us is to make.

This transformation possible and we had the executive support as well. But it's really important to involve everyone that has influence within the organization and really identify early adopters from the branches and the production staff and the sales managers because they're the ones that are going to be your champions and and help overcome the fear factor and be able to see the value of what this brings to the borrower right. This is their benefit.

Being able to close more efficiently and also you know, staying really relevant in the marketplace with this up and coming technology. I know it's been around for a while, but everyone's not really fully embracing it yet because they don't fully understand what is basically the playbook.

We're getting this done and I think that's what we want to bring to the table here is to try and make it more simple. Well, I love the socializing of the of the working idea of the winning idea is really certainly something that mercy through the industry and being able to talk about.

The external piece of it, not just the internal piece for the loan originators which that's not a a single issue for cross country, that's familiar thing that we see and that borrower expectation. But internally if we can talk about some of the things that you saw that one I'd love to talk about the external trading partners that you were working with and where your successes were there because that was a hurdle that you guys needed to overcome absolutely. So in parallel with the internal adoption.

You know, I identified what was the path of success for early adoption externally with our trade partners. I quickly learned that working with Gse's was the the quicker win because we had such great support. There are a lot more quick to make decisions, provide clarity. I had access directly to risk managers, all of the E mortgage digital teams working with the warehouse lenders and their risk managers and being able to talk through either misconceptions or new.

Projects that hadn't been discussed yet. So it was a great opportunity to learn with Fannie, Freddie and our warehouse lenders. An example I have is everyone had a misconception in the industry who has done enotes that if you need to correct that you must paper out. And we worked with Fannie Mae and we were able to do some corrections and didn't paper out any of our enotes. And that is exactly what Fannie Mae wishes for lenders to do is to reach out and work through these things and don't automatically.

Lose that benefit that everyone's worked so hard to gain. Well mercy, we here at MERS will certainly thank you for that insight because certainly from the perspective of compliance operational efficiencies, Thanks very much. Shift when you take that Enote into a paper note, although still possible. Thank you for that example and that's to one of the takeaways we certainly hear.

Our merged members ask us about another one that certainly is a hurdle in the marketplace is to think through that secondary delivery of that E note that E close assets. What was that looking like? You said Fannie Mae, Freddie and Jenny on this call today and certainly those deliveries into that secondary market. How did you guys come about who you would be delivering these E notes to? Although we're focused on agency direct at the moment, it still was important for us to get approvals with the investors.

The aggregators and that was you know to posture for the future. The reason why we're not delivering to them at this moment is the investors that are ready still have some carve outs. They're still trying to figure things out and for us to ensure a smooth execution and and adoption and and just trying to get the wheels greased, well we are getting read and ready. It does require new Tri party agreements with your warehouse lenders.

With these aggregators. So those are things that are additional administrative tasks that are new and it will take more time and more stakeholders. Fortunately, you know I do have a background in secondary, so I worked with our capital markets legal compliance and I worked through some of those things. But I would a tip for you as to make sure you have a subject matter expert who can work with your stakeholders and at least try to monitor and manage these processes because those are all important in obtaining approvals with the individual.

Old investors, I'm going to agree 1000% with you there, Terry. And some of the things that we talked about are those contracts and those process flows with those partners. And really just being able to understand that as the MERS member who you need to look to for delivery of the secondary asset, the funding with the warehouse lender, the sub servicing.

With the servicer are all important critical parts to that manufacturing of that asset and there are some agreements that need to be put in place for those different delivery models. And you would mention the correspondent aggregators, which is one of the exciting things that we see in the marketplace right now is there are some pilot programs as you mentioned that are out there actively seeking E clothes and E notes in those deliveries.

It is exciting. You know what's exciting Terry is well the winds that we saw over at Cross Country and I think that you know certainly as we talk about COVID and the different use cases that you had your branches with locations and being able to meet that bar were made in multiple locations. Tell us a little bit about what went well and we'll start with some of the internal pieces as we did on the on the last slide. What went well at Cross Country internally, I get more excited about this than most people. So pardon me if I got really excited when we ran into hurdles.

And I reached out to Fannie Mae, Freddie Mac, our warehouse lenders and dealing with the top executives just simply asked them questions about how they felt about a proposed process or proposed policy or agreement. It was very pleasantly a surprise to see that they were very receptive, They were willing to learn and work things out with us and that they recognized that this is all very new to everyone and asking questions was not bad and we were able to work through and find.

Solutions and another example with Fannie Mae was I let them know that when you're correcting an ENOTE, there are some constraints with being able to basically reregister the new ENOTE. And they actually, again we're very receptive and said you know what, we need to make an amendment to the seller guide. So I would urge you to be open about the communication with the the stakeholders externally and internally.

And just work through the challenges and I think we all learn from that and benefit are meant together. It's one of the things that very much like working with Crosscountry is again that socialization of the upright idea of what work certainly in tandem was someone as important as Fannie May take out and really informing the market as we all make these transformations into the E close space. One of the admirable one of many I should say, Terry.

Was the commitment to the full E clothes and that really being one of the strategies that Crosscountry adhered to as you guys walked into E clothes in 2020?

I'd like to know a little bit more about how you came to that strategy for that full E close. Certainly as we understand, there are some requirements for the Enote and there are some requirements for the remote online notarized stuff. Yes, I think what I saw right out the gate was lack of clarity. When a loan is eligible to be closed in Iran ceremony, an Eno is not required to be in the Ron ceremony, but if you do have a run ceremony, everything must be electronically fined.

And there must be a digital notarization. So with that being said, there was a lot of uncertainty around which states were eligible and making sure that you were closing correctly so that the loan was available. I know it's it's some states have legislation or Ron and some do not and I think that's where the confusion is. But if you want to just make it simple, you look at what will Fannie and Freddie buy, which is why it's easiest to start with agency direct.

Slowly ease into selling to the aggregators and then you look at the individual states. Some states don't have legislation. It doesn't mean they don't permit it, but you will definitely always need to get approval from the title underwriter that they permit the wrong closing before you close. So that's where things can get a little inefficient or efficient depending on the technology that you have available to you. So we were fortunate that we were able to develop our internal proprietary eligibility and basically it looks at which states are.

Not allowed and it carved those out. Are there any other carve out based on your your, your trade partners and anything else that that you know as a company you don't have the risk tolerance, but once you do that then really you have to pick a webcam partner who can basically record the Ron ceremony and possibly provide you with the Ron notary. So there's a lot of moving parts but you just got to break it down to what's sellable.

And slowly peel back the layers and make sure you involve all your internal stakeholders and external stakeholders and get sign off before you do your first run closing. That coordination for those Closings for all of those pieces of the closing package is critical and I appreciate that call out so much for those Merge members who were looking to continue their E clothes expansion. You know the last thing that we talked about with our merge members quite a bit and Terry is well versed are those rights holder positions on the Mersey registry and socializing those.

Is the rights holder positions for the E note are certainly some of the things that MERS does day in and day out and working with our treating partners and cross country has definitely been one of them on how those processes work. And so I wanted to thank you Terry for all of the insight that you've provided to MERS and also to our MERS members on this particular webinar with just highlighting some of the things that you need to think through and then highlighting some of the successes that are on the other side.

What's one key take away that we could share with our MERS members for them and their equals expansion, you definitely need to choose your E vault provider very wisely because not all evil art work the same way and it's important that the due diligence and also understanding that they're top tier and the integrate well because you're talking to your trade partners and your warehouse lenders when you're transferring the rights holder positions.

And having a great relationship with your E vault provider, as well as everyone involved in the process will make the transition of this adoption smoother. And keeping control and visibility of your enote even after you transfer your right, you need to make sure you still maintain visibility. And you know you know what it means for everyone to be in certain positions, and I think if you start chipping away at that, then it'll help establish that secure E vault.

You know where everything is at all times, but I would say tackle the other pieces of the technology in the process. Similarly is study your subject matter, understand it, get comfortable with it and make sure you communicate with all stakeholders internally and externally. The evolved interface is a great call out. We have some incredible resources on the MERS websites both public and member, where you can get some more information on rights holder positions for the Mersey note.

As well as some resources to the agencies and some other white papers for legal precedents as well, some very great resources to go and see there on the MERS website. Terry, I want to thank you again for your time. This was an excellent conversation with you. I look forward to working with the cross country team into the future where we have just nothing but Enote production. Thanks again. Thanks for having me.


Information contained in this audio was obtained in part from publicly sources and not independently verified. Neither ICE Mortgage Technology nor its affiliates, make any representations or warranties, express or implied as to the accuracy or completeness of the information and do not sponsor, approve or endorse any of the content herein. All of which is presented solely for informational and educational purposes. Nothing herein constitutes an offer to sell, a solicitation of an offer to buy any security or a recommendation of any security or trading practice. Some portions of the preceding conversation may have been edited for the purpose of length or clarity.

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