Can Lenders Implement Digital Closings Without Disruption?
Many lenders are holding off on digital mortgage closings because they believe digital closings are disruptive to their current workflow, difficult to implement, or require a lot of work to adopt. However, this isn’t the case. Digital closings don’t have to involve a lot of training or work, and digital closing technology can seamlessly integrate with your current workflow and tech stack.
Digital closings help lenders close more loans without increasing headcount, while also meeting consumers’ expectations of a digital mortgage. When digital closings offer these benefits and can be implemented quickly and with few resources, there’s no reason for lenders to not adopt digital closings.
Let’s break down just how simple implementation can be.
Digital closings can smoothly fit into your current workflow
When Allied Mortgage Group first tried digital closings in 2017, Todd Burton, Director of Process Development at Allied Mortgage Group, described the implementation as “disruptive and clunky.” This was because there “was a diverted path — one path for wet closings, another for a hybrid, another for a full eClose.” Their closers had multiple workflows for the different closing types, and they had to manage multiple sets of documents.
Implementing digital closings has the potential to disrupt your current workflows by creating more steps, creating new processes, or adding more complexity to your operations. With the right digital closing solution though, you can avoid this. By using an eClosing solution that provides one standardized process for all types of closings and seamlessly connects all parties involved, you can actually streamline your closing process.
Digital closing technology easily integrates with your tech stack
You have established processes, documents, and systems that all work well together. eClosing technology needs to integrate with your tech stack and support your loan documents. Since there are many software providers in the industry and some lenders have custom solutions and documents, integrations aren’t always readily available. Even when there is an integration, it may break often or require a lot of maintenance.
Luckily, there are digital closing solutions that can effortlessly plug into any LOS, POS, and document provider. You don’t need to change your tech stack or documents in order to offer digital closings. “[T]he rollout is not actually that complicated … We’re using Encompass, so it [Snapdocs] integrated very, very nicely there,” said Kevin Strika, VP of Operations at First Option Mortgage.
Digital closing implementation requires only a few resources
When you use a digital closing platform that’s thoughtfully designed and offers automation, you don’t need to spend a lot of resources on heavily training your team or setting up the technology.
Automated sorting and annotating
For hybrid closings, documents need to be sorted into wet-sign and eSign packages. For hybrid and eClosings, the eSign-eligible documents then need to be annotated with fields for eSignatures, eNotarizations, initials, checkboxes, and dates.
Instead of having your team manually do this work, digital closing technology can use artificial intelligence to automate the sorting and annotation. When implemented correctly, this simply requires lenders to provide a few closing packages for the artificial intelligence to “learn.” Your digital closing provider should also QC your documents after they’ve been sorted and annotated. Otherwise, your team will need to manually double check that everything is correct.
Minimal technical resources needed
Implementing digital closing technology doesn’t have to require a lot of technical resources or work. Burton found it was “not a tremendous burden on Allied’s internal resources. You need a project leader and a few people to dedicate maybe five hours a week over a month and a half, including testing and training, but you don’t need a team of 15 engineers, IT, and 20 closers to get through it.”
Strika similarly said, “I was expecting to have to spend a lot of time on it to get IT involved deeply into everything. But, we beat the clock. Most of the Encompass setup, we actually got done in a single day.”
Intensive training isn’t required
Even if the technology is easy to implement, lenders won’t succeed with digital closings when users need a lot of training. When an eClosing platform is modern, intuitive, and easy-to-use for both lenders and settlement agents, you can quickly and easily roll out digital closings across all your branches and settlement partners.
As a test, Allied Mortgage Group passed a hybrid closing to a title company with whom they have a good relationship. Burton explained that without more detailed instruction beyond “we’re using a new system” and “keep an eye out for an email that’s going to look a little bit different,” the title company was able to complete the closing on their own. “They were able to get the closing docs, finish it up, and do everything that they needed to do to get the file back to us and post-closing without any additional interactions from us at all.”
“So that was a fun little experiment, and to me, it was proof that this system and the communication and the design of the portal and ease of use is real. You don’t need to be a techie,” said Burton. He went on to say, “[I]n doing our own webinars and training for our group, we talk a little bit about the borrower account setup. And, I don’t really like admitting this, but it’s actually easier for borrowers to set up an account with Snapdocs than it is for our initial disclosure process.”
Implementing a digital closing platform can actually be easier than implementing other technologies, so there’s no reason for lenders to not get started today. As Burton said, “You’re missing out on a technology that is easy to implement and easy to use. And because of that, you’re probably not delivering the highest level of service to your borrowers that you can. This is going to increase levels of customer satisfaction, and quite frankly, it’s going to be what borrowers start to expect. With the right partner, you’re also going to increase efficiencies on the back end.”
To hear more about First Option Mortgage and Allied Mortgage Group’s experience with implementing digital closings, watch our “It’s Not Rocket Science: Two Lenders Share How Easy Digital Closing Implementation Can Be” webinar. If you’re ready to learn more about what digital closing implementation would look like for your business, feel free to contact us.