Monday, September 26, 2016

3 Misconceptions about Borrower Collaboration

In recent months, “Borrower Collaboration” has proven to be a hot topic surrounded by much discussion. However, it has been widely misconstrued in how it fits in with the current mortgage procedure. We’d like to clarify what it really means and the effects it has on inclusion in the closing process. Here are 3 Misconceptions of Borrower Collaboration:

Engaging only at the beginning of the loan embraces full Borrower Collaboration.  
So many people believe that Borrower Collaboration is something that can be achieved with only the application or searching for a Loan, and then no other touchpoints throughout the mortgage process. Technically, yes, you “collaborated”, however, true Borrower Collaboration spans beyond an online origination, engaging and collaborating with consumers from the beginning of the transaction through closing, servicing, and eventually the next loan. Borrower Collaboration should be viewed as a situation where once you are connected, you are connected for life, constantly updating and engaging with borrowers.

Collaborate and done; no relationship required.

This industry must escape this all-too-common mindset, and needs to start moving to real relationships with borrowers. In today’s world, the most relevant way to connect with these customers is through business social media techniques to build electronic relationships with borrowers, from the beginning of the transaction throughout the life of the consumer. Once the industry recognizes and begins to apply these concepts, an entirely new business model emerges, which is both cheaper and more repetitive compared to the current “burn-and-churn, one-and-done” approach.

Borrower Collaboration is communication with only the Borrower.

True Borrower Collaboration should go one step further by creating collaboration, not just for the Lender but for Title, Real Estate Agents, and other service providers together. After all, that’s what the transaction is to the borrower. Because each party is involved with the transaction, a unified front of active communication is needed to truly engage the consumer and create the definition of Borrower Collaboration.

The old adage, “it’s much cheaper to keep a customer than get a new one,” now applies more than ever before. Here at Pavaso, we turn a mortgage into a lifetime electronic relationship where customers build loyalty to those who engage with them. As if it could get any better, this connection with Borrowers also reduces expenses, creates new revenue, produces fewer errors, features higher security, and allows for faster closings. 

Monday, September 12, 2016

Integrating eNotarization into Your Digital Strategy

Throughout the industry, eNotarization is one of the more commonly misunderstood aspects of the digital closing process. To integrate this process successfully into an overall digital closing strategy, there are a few key elements that must be in place: 

State Approved eNotary
There are many states that must certify eNotary systems and/or approve individuals to eNotarize documents. Lenders need to review the procedures of their eNotary provider because, although many early systems made some headway, their focus was too wide. Most providers only pursued blanket approval from states for all types of notarizations and did not look at the specific requirements for notarizing mortgage-related documents. Early approvals like these set the standards that may not be not applicable today and, in many cases, are incorrect, creating approval processes that do not meet mortgage industry requirements.

Embedded Notary
As we explained in an earlier post, document notarization, whether executed electronically or on paper, is an integrated component of the entire closing process. Trying to execute this activity as a one-off or separate from closing is wildly inefficient and risky, not to mention the fact that it disregards the CFPB’s directive to improve the closing experience for the borrower. Therefore, lenders should choose a provider that incorporates eNotarization as part of their overall closing platform, so that this functionality works to streamline the closing process rather than to obstruct it.

Understanding what eNotary really means
Contrary to what much of the mortgage industry steadfastly believes, physical presence and proof of identity are required with eNotary. In fact, identification is more accurately and efficiently verified electronically than it can be in the paper world. However, state regulators fear that eNotarization means documents will not be notarized in the presence of the notary, which is simply not true. Audit trails that track eNotarization are highly detailed and always available in Pavaso, which provides an abundance of proof of the details associated with all actions that take place, and not just at the closing, but for the entire process from start to finish.

Would you ever ask a notary for their credentials and proof of their commission being valid when you wet sign documents?  Would you ever check with the government to make sure the information the notary provided was valid and that they are in good standing?  No one has ever done that and would be hard pressed to get their documents signed if they tried to get that information on the spot.  In the digital world, the validation of credentials happens each time to make sure everything is valid and correct.  Secretary of State data bases are cross-referenced with eNotary solutions to be certain that all information is current, allowing only properly registered notaries to perform their duties.

eNotary is a prime example of a technology delivering a standard before businesses have caught up to define what is actually needed. This can easily be changed, but states need to consider business process benefits and the needs of the industry, just as much as the technology that is used to execute the process. In the near future, we expect to solve this issue by constructing a process where states approve closing platforms specifically for mortgages and other types of loans.  This will eliminate the concerns and unnecessary complexity of covering all the scenarios for any notarization, and will instead focus on the more streamlined mortgage process.

eNotarization involves much more complete verification and assurance that a notary has done their job correctly, and should be included as a part of any company’s digital strategy.

Monday, September 5, 2016

The Issues With Your Doc Prep Provider

Just as gasoline doesn’t work well in diesel engines, not all technology works well with your business.  The old version of technology, that has lived in the industry for the past 20 years, cannot thrive in today’s digital world. It’s time for a change. The two areas that should be of concern to Lenders are LOS Systems and Document Preparation technologies. It’s likely that the use of LOS’ will survive a bit longer, however, Document Prep companies are having serious issues with the ever-changing need for data in this fast-paced world.

Looking back, you can understand that what was once innovative 25 years ago, was only innovative compared to the other technology of the time. The problem is that many of these same companies are now twisting and manipulating the unchanged technology in an attempt to fit the new needs of the industry, leading to trouble providing good service and quick turnarounds. The risk associated with document preparation technology outweighs any other, simply because it’s no longer just about documents!

Every company says, “Trust us, we’ll have what you need,” and to some extent, they might. However, as we dive further into this new digital world, these companies will always be one step behind innovating leaders, keeping you waiting for them to catch up. You need a provider who has the technology you need, when you need it, and even before you know you need it. As you start to realize the limits of your current capabilities, we recommend you look to the future for your technology needs. Some providers, like SigniaDocs, were specifically built on new approaches, different ideas, and the discoverable weaknesses of other document preparation companies.

Now that you realize that your current technology won’t make the cut, when selecting an advanced provider, we urge you to make a decision based on data. Find a company that manages data with the ability to produce any media, whether it be MISMO 3.3, 2.4, 10.10, custom data files, Smartdocs, BlockChain, eNote, or paper. This gives you the flexibility to utilize the newest technologies that will work ideally in a digital mortgage world.

After all, history has shown that those who don’t change, don’t survive. Don’t get yourself caught up in antiquated technology that was built for the mortgage industry 25 years ago; choose a company built for today and the future.