CEO notes that all three major stages of the mortgage cycle gain from going digital
“Paperless mortgages are about to reach a tipping point”
October 19, 2015 – Cincinnati, OH – eLynx, the pioneer and leader in on-demand web-based compliance services for secure, data-validated mortgages, has determined that there are substantive benefits across all stages of the mortgage cycle to moving towards digital, data-validated loan files. Origination, secondary marketing and servicing all gain from migrating away from paper-based methodologies that restrict accuracy and transparency, according to eLynx’s CEO and president, Sharon Matthews.
“Paperless mortgages will soon reach a tipping point, though not everyone realizes it,” said Matthews. “The entire industry uses loan systems that create electronic files that allow for the electronic movement of documents and data during the mortgage process. As the industry migrates to MISMO standards and the Uniform Closing Dataset, the benefits for all become clear,” she explained.
“Origination benefits through the electronic delivery of Know Before You Owe (KBYO) disclosures and the better use of mortgage data to enable transparency for borrowers, GSEs and private investors alike. With higher quality data, investors can better evaluate loan portfolios well before commitment and delivery, which will lead to greater private mortgage capital infusions,” she said. “Servicers benefit by leveraging the uniform data when boarding loans, and for ongoing quality control and analytics that protect both lenders and investors, and augment the viability of mortgage investment vehicles,” Matthews continued. “Consumers benefit from lower origination costs using digital processes and delivery, as well as increased online capabilities, which Millennials and other younger borrowers demand today.”
eClosings are the final step and they are coming, said Alec Cheung, eLynx vice president of product management and marketing, who participated closely in the successful CFPB eClosing pilot that concluded this past August. “The pilot made it clear that eClosings can be successfully performed at scale and lead to a positive experience for consumers, as proven by borrower surveys,” said Cheung. “Process, not technology, is the determining factor. Borrowers did embrace electronic closings and technology is not the primary hurdle,” he noted. “Process is where the last roadblocks remain but those are starting to erode. Investors have long hung on to paper documents. Notaries have yet to solve electronic notarization. Closing are used to paper-based processes dictated by lender and investor requirements,” he said. “We’re working within our very large nationwide network of closing agents and notaries to support the paperless migration.”
Any time a technology offers a process that makes loans better, faster and cheaper to create, the industry will eventually get behind it, Matthews believes. “The digital revolution is here and everyone in the mortgage value chain benefits from data-validated mortgages,” she said. “And that includes consumers and real estate agents. The CFPB and the GSEs are solidly behind going digital, and the Uniform Closing Dataset is the next big requirement looming for lenders now that the KBYO deadline has passed,” Matthews noted. “Starting as early as the second quarter of 2017, the GSEs will only purchase loans that conform to the Uniform Closing Dataset,” she said. “When the data is standardized, everyone will be a winner, both inside and outside the industry.”
eLynx, a portfolio company of American Capital, Ltd. (NASDAQ: ACAS), helps customers in the financial services and real estate industries capture and manage documents and associated data electronically throughout the document life cycle, ensuring compliance with industry regulations, reducing costs, improving workflow efficiency, and automating paper-intensive processes. The company’s Expedite® cloud-based platform and network supports a comprehensive suite of on-demand document collaboration, distribution, and connectivity services that can be deployed independently or as a fully integrated end-to-end paperless lending solution. eLynx serves hundreds of financial institutions, including 25 of the top 50 U.S. banks and maintains the largest and most comprehensive database of validated real estate agents in the U.S. The company was founded in 1994 and is headquartered in Cincinnati, Ohio. It has offices and redundant data and print centers in Cincinnati and Beaverton, Oregon. For more information, visit www.elynx.com.