Expanding the digital eClose with EPM

0:03
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.

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Hello and welcome to another episode of the Ice Mortgage Technology Open House Podcast. My name is Veronica Cassetta, Product Marketing Specialist here at Ice Mortgage Technology. Today we're pleased to share a special podcast episode featuring our very own Elizabeth Barnicle, Eastern Regional Manager at Merge Corps Holdings, Inc, along with Stephanie Hodge, Closing Director, and Logan Judah, EVP of Secondary Fulfillment at EPM.

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To talk about how EPM successfully incorporated Enotes into their E close process, tune into this conversation. Now for behind the scenes look at how EPM expanded their E close footprint to include a successful Enotes rollout. Without further ado, let's TuneIn.

1:10
Thanks for joining us today. I'm Liz Barnicle, Eastern Regional Manager for MERS Corp. EPM is currently lending in over 32 States and they are based out of the great state of Georgia. They're no newcomer to the murder system. They've been a MERS system platform member since 2008. Fortunately, I had the chance to work with the amazing EPM team as they recently expanded their membership to include the Mersey Registry. It's my great honor and pleasure to introduce two amazing colleagues, Epm's EVP of Secondary Fulfillment, Logan Judah and Stephanie Hodge.

1:40
Director at EPM. Good afternoon Logan and Stephanie, good afternoon to be here. Stephanie, I'll come to you. First tell me a little bit about your background and your role in this digital expansion at EPM. I am fairly new to the EPM family. I started in March of 2021. Luckily we're already pre signed up with our technical service provider Snap Docs which I had previously worked with at my prior company and they have helped us tremendously trying to get the E Note system set up, I first did.

2:10
My first hybrid digital Closings back in 2019 with my prior company and an original TSD, didn't workout, so we moved to another one. Then that didn't workout. We moved snap docs. As soon as we went to snap docs, I wanted to start talking about enotes. I worked on the project for about six months there and it never really came to fruition. We never actually finished it. We did a lot of the leg work, a lot of the research, but it just never finished. So when I started at EPM in March, we did our first hybrid E closing within the first week I worked here. And then the next step was obviously.

2:40
Set up, you know, which has been a plan of theirs in the past, but there's a little bit that just goes into it. So with my prior knowledge and my prior research, it was a lot easier to get that set up here. I love that you share that with us. I think that there is definitely some room for some research and I'll forecast one of the things we'll talk about, which is your success story and one of the reasons are one of the things that you would share with members is do your research before you get started and having Stephanie Hodge.

3:06
At EPM, Logan, you and I have had a chance to talk about what a resource to be able to answer some of those questions that merge members are asking to access that Enote in their E clothes. Logan, you and I have met before. We got involved with the Demerge E Registry, Enote Initiative. We had a good friend of ours, Ruth Lee, The big bank consulting had introduced us and I think we had some QC things we talked about. But how did your role at EPM get you involved in Enote? Sure, yeah, my role encompasses.

3:34
Quite a few different areas, so working with the technology team, the secondary team utilization. So it was just natural for me to want to get involved and kind of be the at that middle person. And then speaking with Stephanie about what her objectives are and what the company objectives were. He knows for just the next logical step for us and learn to be able to provide that as a as a something that's out in the industry but not really you know exploded and we at EPM want to make sure it's exploding as much as possible. So we wanted to make sure.

4:04
That merge is on the forefront of helping us and and I know there's been some such support from the MERS team to allow us to do that and it's just been able to be a a smooth step by step process and we've really reaped the benefits of that. Certainly have a lot of conversations in the space on trying to guide our members to those next steps to access enotes to.

4:28
Be able to perform those types of Closings. That's why I really wanted to talk to both of you today, because in my eyes and certainly in the team here at MERS, you know EPM absolutely crushed the Enote integration. And you guys have the real world experience that the lenders are asking the same questions that you guys were asking when you were going through this transformation from paper to a digital note. I wanted to share with our listeners.

4:55
The success story, it was so well put together. I thought I'd ask the experts we have here on the phone a little bit more about it. I loved what you guys said here in that first question, what benefits are you gaining as a result of implementing E mortgages? And one of the things that I loved about it was the borrower. Stephanie, tell me a little bit about that As far as what did you see as a result for the borrower implementing Enote, the biggest thing is.

5:19
Less docs to wet sign we right now with hybrid we're doing just the notary docs and the promissory note. We're being wet sign. Just being able to add another one to the E close documents is more convenient for a borrower. Less docs to sign it closing.

5:35
And also, there's never a chance for the signature to be incorrect or missing, so they're not having to be bothered afterwards to resign. Something which I always find to be the most inconvenient thing for a borrower ever to say, hey, your notes missing, you have to get another one or if the title company,

our attorney missed the gate or missed the signatures. So that really just saves a lot more time for the borrower just knowing that his note is secure within a vault and not just piece of paper floating around. That's always confidence builder for a borrower. So basically for the borrower, just less mistakes, more secure and just.

6:05
The ability to wet finalized docks at closing, you know it's not. Yeah and you've mentioned a couple things, the efficiency for the bar, we're being able to sign that in. The security functions around an E clothes, you know that's the efficiency and the accuracy of those digital Closings that lenders can get a hold of when they search.

6:21
Getting closer to a full digital package and here in your second question, what advice do you have for a company starting to implement E mortgages? And I think this kind of plays into our key takeaways for our MERS member. And and Logan you and I had a chance to work on a few of these agenda items and you had an incredibly fast timeline on this, but.

6:42
I love the first part of this is that there's no better time to get started than today. Logan, can you tell us a little bit about how you guys got started to implement your Eno? Yeah, absolutely. So pretty much it was Stephanie had already done a lot of the lake work up, Brian, with our vendor partners.

6:57
She was able to establish relationships and get agreements already in place so that they had the experience of already working with the notes and they were able to assist us along the way. But it really was looking at the information that was already provided or that was already out there on websites on the Mercy Registry as well as finding a trusted partner with our warehouse with our custodian. And we were able to kind of put all that together and then form our own checklist to stay organized. We had a great resource in Cape.

7:27
Yes, she was able to really just guide us through the like the next step. Our meeting with her really clarified a lot of things for us about what was actually still needed.

7:39
Who do we need to reach out to? And once that we had that in place we had a better path to victory and we could see the end insight and it made things much more. We were much more confident in what we were trying to set out to do. And I had to re keep reestablishing a time frame in my head because I thought it would. I would take a more conservative approach to like when we would be able to achieve our goal. But it was actually much closer than what I had anticipated. So I pushed, I thought a month out we would.

8:09
Be done the following week, right. We were done with testing in a week and that, yes, that I wasn't prepared for the speed at which we would complete this once we had that organization. That was a thing that blew my mind and we were incredibly satisfied and happy with with the transitions that took place in our partnership and we felt really empowered throughout the entire process, Stephanie and I.

8:34
Were able to ask a lot of questions because there are so many different new things that you have to factor into your routine to your process that there's new terminology that you have to understand. It's it's slight variations here and there.

8:48
But for your team to understand it, to get trained on it, to start to say the terminology and the process, those things we needed just a little bit of time to get familiar with. And I think that our team did had a tremendous amount of support throughout the entire process. Thanks for sharing that Logan. I would absolutely agree and MERS noticed how organized you guys were as well. Certainly from a success perspective, I wanted such you know I pulled this, you guys signed your Mersey Registry addendum on September 27th.

9:16
Finished your tutorial I think later in that day and you were finished with your Mersey Registry integration on November 19th. If anybody's counting, that's 36 business days, that's 53 calendar days and approximately 7 weeks. So that's about the time it took for us to get everything stood up. I wanted to talk a little bit about the importance of partners and there's been so many different conversations that I've had with the EPM team about the partners.

9:41
And it sort of plays into that Mersey registry integration because one of the first things we talked about in our meeting was, do we have all of your partners ready, Are your warehouse lenders ready? Is your investor ready? Is your servicer ready? Stephanie, you mentioned the Evault and Snap docs and Evolve. Are those guys ready to test with you? And I, I just wanted to see if there were any comments that you wanted to share about the importance of partners.

10:06
The expertise of those partners is you guys stood your, you know, process up for the first time. I can start with the Snap docs, they're ready right away. You pay of course the fee upfront, but it's well worth it because they've done this so many times with all the partners that were already existing for us that once we signed all the amendments to the, you know, agreements with both our warehouse lender with Evolved and then with ***** like the testing literally took a day, the importance of.

10:35
Them having that expertise is what gets you through it because me and Logan would have been locked if we didn't know the stuff about this and all of them had all of their answers. So it worked out fantastically and working with those partners and certainly leveraging the expertise at MERS and the E vault providers, the doc providers, the warehouse lenders and all of those who are in that ecosystem need to be ready with a lender such as EPM to stand up and to give a live with with enotes.

11:05
I wanted to touch just a little bit on the Mersey note integration because we certainly spend time at MERS preparing our members to to access the notes and one of those things certainly was the checklist and we take a look at trading partners, your technology platform and our internal processes.

11:22
And as far as internal processes, the key benefits of registering an ENOTE on the Mersey Registry is about understanding the rights holder position. Mersey Registry is a centralized registry that is used by the mortgage industry to meet legal requirements. Mersey Registry identifies the controller or the location of a registered Enote. And I just wanted to stop there for a moment and talk to Stephanie and Logan about that. That's a lot of new verbage.

11:51
And how did EPM tackle some of those things? Certainly in Mercy registry integration, but just in that same view, you know, there's a lot of new language terminology. And Logan, I'll start with you first. We really had to go just back to the fundamentals, listening and dissecting. Give one terminology at our one, what word is it? Fine. Learning something new. It's like learning, learning basically a new language.

12:15
So just really sit there kind of read what it is that's already out there that's provided. So we went through the the user guide, we allowed each other to ask questions. We had meetings, we heard the same verbiage over and over. If someone wasn't familiar with it, you know raise your hand, ask the question and then also resources go to the MERS website, look it up and we were able to you know find the the questions that we have or we could reach out to a partner and and get the the guidance or the answer right away from working with them and having their.

12:45
Experience and the trusted response that they would provide us. Thanks like and what about you Stephanie, as far as you know control and location, I think those terms are old hat for someone who's a seasoned as you are. Do you see that you know control and location in those terms and how people digest on that Enote process? So were some of the things that were helpful for you as you learned about Enote. Well, one thing I wanted to add a second ago about this and it was kind of like.

13:09
A segue to this question, which is I don't want anybody to think this is like scary when you read it. When Logan and all the large people on our team read it for the first time, it sounds really confusing. So then you have to ask a lot of questions. But in the end, the biggest take away?

13:24
Is that your partners are so involved and trusted that once you're actually doing an E Note, we don't actually transfer control ourselves. These evils are this magic thing that does all the work for you. So no matter how this might sound scary and intimidating when you read it, once you do it, everyone is going to be so excited because you don't actually, you know, transfer all that stuff yourself. All your partners do it within the vault. So it's really fantastic to learn the learning, but then even better to learn that you're not the one doing every single.

13:54
I really appreciate you sharing that. There's been times when I spoke to members where they share, you know, on the other side, it's so much nicer to have the digital process to deliver an Enote and certainly in the times of COVID. As far as making sure that the endorsements were done manually, that's not an issue. Whenever you're delivering an electronic note, it does sound different, but when you get to the side where you're producing them, that process is actually quite nice loan selection.

14:21
And the way in which EPM decided which loan product you guys would look to expand the Enote to, Can you share some thoughts on that, Logan, as far as your approach on which loans in your pipeline would be tested for Enotes?

14:37
Or would first roll out with E notes. Yeah. And I think this was, this goes back to just communication, Stephanie. I wanted to be successful. We wanted to set up EPM for success in doing the first E notes. We followed what was the best approach in order to do that and we wanted to keep it with with partners that we have it have had experience in doing that. So our first election was was going with the Fannie Mae.

15:02
Loan as well as using our origin warehouse line. Both of those partners are you know very knowledgeable, they have experience in doing it when speaking with them. They had the the already the the history of doing it. So we got a lot of support from Cindy Grassit at Origin. She guided us and through several questions a little bit of the process too they were able to set us up and.

15:28
Help us in in certain areas when we had it, but then you know Stephanie, I just continued to monitor it and put ourselves in the best position so we can have that first Eno down. That first one is going to be the most nerve wracking and once we had that completed.

15:41
You know, Stephanie's already looking at ways to increase that. So we're building our confidence and now we're looking to expand to Freddie Mac and several other warehouse lenders. I think I don't want to steal Stephanie Thunder here, but you know that's kind of how we started about what we wanted to do and be precise and select the the.

15:59
Partners that we wanted to go with and for those loans we really wanted to make sure we're doing it absolutely correctly and then allow us time to learn more as we went along. It certainly is something that you want to start with the appropriate controls in place and understanding those rights holder positions and then understanding what that looks like transfers with your with your trading partners. Stephanie, I know that you had some insight too as far as which product you guys wanted to roll out with and where you want to take this heat closing.

16:25
For EPM and what's your thoughts on your loan selection there? Just like he said, we're doing Fannie Mae upfront. We'll be doing 100% Fannie Mae by end of the month and once we get Freddie approval and we're actually going to probably get it by the end of the month. But our goal is to start doing Freddie in February. And basically we have set up controls in our Encompass system that indicates the hybrid with E note, it highlights them or at least that's what we're working on right now. So we don't actually have to open each loan and look at the criteria it'll.

16:55
I like them automatically when they're eligible to be an E note and hopefully by the end of 2022 I we plan on doing 100% conventional by I'm hoping to the end of Q 10 that's really we're actually trying to sign on another warehouse too. So right now we have Origin who's our trusted partner then we have another one already signed up don't know from a gym names but we have one that we can use. We just haven't done it yet because we want to make sure that we have at least 20 under about and have a system set in place with that new warehouse and then we actually have a third warehouse that wants to get approved so.

17:25
That's exciting news too. So now we would have 3 warehouses that we could expand our enotes to. Appreciate you sharing some of the insight you guys were thinking through as far as how you were going to roll this out in that Enote or that loan that would be selected for that. Certainly the trading partners that influenced that. As we think through some of the advantages of having the Enote and what the return on the investment is, we touched on them in a couple of different ways and I'm just going to restate.

17:53
Some of the things that were mentioned in The Murders Wonder success story where the benefits were not just with EPM, but it provided another option for your borrowers.

18:04
And the return on investment for your borrowers, I also, that's certainly been something we've talked about in our previous conversations. Do you see other operational advantages for the E Note once you've had those implemented there? Stephanie, I know you've got a close eye on that as a closing director. Absolutely. For the closing department themselves, the fact that there's no signing errors on a note, I mean you wouldn't believe how many times that anyone listening knows that either a notice signed incorrectly, a note will get lost in the mail. We did take our dates off, so that's fantastic. But back in the day and I'm sure many people still do have dates.

18:34
On their note, you can't have anyone backdate anything. So basically you're looking at such a percentage of improvement on errors on notes because there just aren't any. The closures would register the loan Summers, and we don't do that at all. Evil does everything. So now it takes away another 3 minutes to file out of our time. So that's great news. Post closing, obviously they're not shipping a physical note, so no Bailey letters, no custodians.

18:57
You know where they sometimes use them. And so there's no losing the notes either in the shipping process, which people will realize how much of the benefit that is as soon as they start loans being purchased immediately. Because these things are registered and evolved, it gets transferred immediately and we're getting Pa's within 24 to 48 hours of the signing date.

19:15
So basically there's no post closing servicing transfers, there's no cancellations, there's no spoordinations. Everything has done automatically through the evolve through our partners. So the ROI for our company is a lot of savings of time and I know that companies look for that how to save time for each person so they can work better, not faster or smarter, not faster. I don't really remember what they say, but we definitely have improved that goal 100%. Well, I think they definitely are lucky to have someone as their closing director who has this background and E closing.

19:45
And you know, if you guys look forward to 2022 and how you're going to scale some of that E clothes and that digital adoption, what are some of those things that you guys were looking at? I think you guys had shared some of the percentages that you guys were doing hybrid to memory. You guys are doing quite a large percent. Yeah, we're doing over, it's about 83% hybrid, 18% wet of course. And then when it comes to our loan products, conventional is really picking up. We actually think that we're going to head about over 20% conventional. So once we get to that 100.

20:15
Percent conventional goal, you're looking at 20% of our business being emailed and of course everybody wants to do Jenny, he had talked about it earlier. There were some updates from the Mizmo conference that's occurring January that they did reiterate that there would be some new E collateral guidance from Jenny and that the pilot group would be opening up. So I'm looking forward to having those conversations as we scale up in 2022. Absolutely. Another thing that I want to just mention is.

20:41
During Covet had emergency Ron closing. We only conducted 4 so far in the state of Florida because they allow it. But the more states that come on accepting Ron, the fact that we're already doing, you know, I mean doing the full equals is very exciting and definitely a goal for 2022 because people being overseas or people being sick, it's going to be so convenient for a borrower. I mean what borrower wouldn't want to just sit in front of their computer and do their clothing without driving somewhere to do the signing or getting on their phone and then?

21:11
And which is what a hybrid does might be easier, but a full E closing is what I'm looking forward to in the future. I think you're right and I think the list operationally for the borrower to be in that digital environment to complete that transaction is certainly in way in which not only the mortgage industry is headed, but the digital transformation we see every day. So that borrowers are just getting used to that. So seeing you guys seeing EPM come on board, an organized systematic approach and seeing the turn time in which you guys were able.

21:41
Turn it on with your trusted partners was really just a joy to watch. I think the last thing we wanted to talk through is what are some of the key takeaways for our members. I think we shared quite a few of them today and leading with the success story, I thought it was a great start, is there's no better time to get started than today and that you'll need to engage with several different partners. So being organized will be critical to success. I just wanted to reiterate that shout out from the mountaintop because I think there are portions of that that.

22:09
We help our members move forward into their action plan for accessing E Notes with their trading partners, their internal processes and their technology platforms. Anything that struck you guys that you would want to share outside of that As far as take away from errs members who are looking to follow in the footsteps of EPM and accessing it, yeah, I want to reiterate the don't be scared option because where I thought I came from, you know, I did all the research, but I didn't have the contact, you know, with let's say the partners I did with Snapdracks of course.

22:39
But not, let's say, Freddie or Fannie or even Mertz. MERS helped me a lot. They gave me the agenda. They told me about the tutorial. So I had done that part. But when it came to that checklist, if you think that you don't have contacts, you do. So if you're the one that's leading it for the company, you can reach out to these people yourself. You don't need someone else to do it for you. They would be more than happy at MERS, Fannie, Freddie to talk to people, to try and get them involved. So don't step back because it seems like a lot of work. It it does seem like a lot of work when you read the checklist on the website on Fannie.

23:09
And everything. But once you start just making that commitment and digging in that two months is possible for anybody, don't be worried about what you're reading and how challenging it might be, because once you actually go through with it, it is totally worth it in the end. I can't even really tell you how much you know these benefits are, because until you do it, you won't really understand. So I just encourage everybody not to get worried about what they read upfront.

23:32
And don't get discouraged because it sounds too difficult. It is not difficult. You just got to stick to it. Learn stuff on your own if you have to, but ask questions, you will get the answers. No one is not willing to help you with any of the partners that you might work with. Yeah, we certainly try to position some resources for our members. As you say it is possible. And there is like on the other side of the tunnel. And as our merge members are listening in, remember to go to mersey.org, our public website.

23:58
It has a lot of great resources for ENOTE research to get started with. I've looked at some of the correspondence of we had with EPM as we were standing at the Mercy Registry.

24:09
And you know, production, I really did appreciate the comments that you made as far as the new terms, new procedures and new understandings of how these processes will go. And they do require research and fact finding and MERS is here to support a lot of that and there's some great resources on our mersey.org website to take a look at. So Logan, I'll wrap up with you. Are there any final comments that you would share with our MERS members? I probably just echo, you know what Stephanie has said. It's just that the checklist, they're all going to be slightly different from the agency to the.

24:39
The Warehouse, the MERS checklist, they're all a variation of the same thing. So don't be overwhelmed. Just take it, you know, one item at a time, reach out for support and you'll get there. It's depending on how fast you want to go, how slow you want to go. But just start today and there's no better time. Like we mentioned before, start to understand the process, what you need to do, how to set it up. And then you'll see down down the road that it was all worth it. Thank you, Logan. Thank you, Stephanie, for sharing your expertise.

25:09
You've been very gracious with your time and advocating for that E close that certainly heard that, that last piece that advocating for it and certainly someone who knows as a experienced closing director having efficiency and process certainly helps move those assets faster, which is some, you know the name of the game in the mortgage banking business. So thank you again. We're really excited to see EPM stand up with the E notes in 2022.

25:34
And for those who are listening, if you have any questions or if you would like to follow up with some additional information from MERS for some of the questions you may be asking for enotes, make sure to find us on mersing.org and we can set up a call and start putting together your action plan.