The mortgage industry's fragmented ecosystem is one of the main challenges to industry-wide adoption of digital closings. Learn how Snapdocs solves this in HousingWire's Q&A with founder and CEO at Snapdocs, Aaron King.
HousingWire sat down with Aaron King, founder and CEO at Snapdocs, to discuss the underlying challenges and solutions to adopting digital closings.
Q. There are many stakeholders in a real estate closing (lenders, consumers, title agents, underwriters, county recording offices, aggregators, etc.), and each of them have their own requirements when it comes to what can or can’t be digital. How can the industry work toward all of these stakeholders accepting and adopting digital closings?
A. This industry has been promised a digital closing for 20 years, and the truth is that we’ve had the necessary technology for at least that long. The reason it hasn’t been adopted is because getting to digital closings at scale is no longer a technology challenge. It’s a fragmentation challenge. There’s no single participant in the closing process who can choose or even predict the constellation of companies that will be involved in that closing. For example, a lender may want to adopt digital closings, but in a purchase transaction, they often don’t choose the escrow agent they’ll be working with. Furthermore, they may sell their loans to a dozen different aggregators, but half of them don’t accept eNotes. Then add to that the state laws, county recording office requirements, title insurance underwriter requirements, and consumers with different technical aptitudes. To adopt digital closings at scale, you need a tool that can handle multiple types of closings (paper closings, hybrid, eNotes, etc.) through a single interface. That tool also needs to be able to handle the logic for each of the requirements for these stakeholders, so it can intelligently route each closing to its most digital path.