Most mortgage lenders have three main goals: decreasing cost, increasing revenue, and remaining in compliance with regulations. A recent pilot study found that eClosings (digital closings) can be valuable tools for meeting all three goals. By creating a seamless platform for communication, eClosings may also transform the borrowers’ experience and provide a peace of mind that traditional closings have not.
Today, we’ll tell you how digital closings decrease cost, increase revenue, and help you stay compliant in today’s rapidly changing lending marketplace.
How they Decrease Cost
Errors are responsible for a large percentage of lenders’ costs, which is unfortunate because errors can and should be avoided. The majority of errors are caused by a lack of communication between all the parties involved in the transaction—lenders, title agencies, realtors, and consumers. Information communicated over the phone can easily be forgotten or misunderstood, and email threads can quickly become a jumble of information. Digital closings may reduce duplications of effort and eliminate errors by bringing everyone together onto one platform.
How they Increase Revenue
Consumer Financial Protection Bureau (CFPB) reforms are making it more important than ever to develop close working relationships with realtors. With digital closings, lenders can garner more referrals from realtors and better reviews from consumers. Digital closings can be more transparent and more efficient—in many cases a closing can now be completed in less than 15 minutes. This will be a boon to lenders working with Millennials, who are now entering the housing market for the first time. Lenders that utilize digital closings may also increase their chances of garnering repeat business; the less paperwork and hassle a consumer has to deal with, the more likely they are to return for refinancing or for a second mortgage.
How they Increase Compliance
With the creation of the CFPB and the TRID integrated disclosure, lenders are more hard pressed than ever to remain in compliance. Lenders and realtors must work together to stick to tight deadlines, and digital closings will certainly help toward that end. EClosings fulfill TRID’s “Know Before You Owe” initiative by educating consumers and giving them more time to review important documents before the closing.
Improving Service with Vanguard Title
Vanguard Title is a Michigan-based title agency that works with realtors, lenders, and developers across the nation. We provide competitive title insurance and start-to-finish closing support for residential and commercial transactions. If you’re interested in our services, visit our homepage for more information.