Here are seven steps for scaling eClosings, according to mortgage industry experts.
The pandemic caused many mortgage lenders to shift from traditional closing procedures to completely virtual eClosings. Now that many offices have reopened, both lenders and buyers know it’s possible for a closing to take less time and that they can be done from anywhere.
During the recent webinar, “Crack the Code to Scaling eClose” with Terri Davis, GM of real estate at Notarize, Angie Colon, director, engineering at Rocket Mortgage and Whitney Vogt, director strategic initiatives at Guaranteed Rate, they shared their tips for scaling eClosings.
Rocket Mortgage has completed more than 1.3 million eClosings and now digitizes at least some portion of more than half of their closings. Guaranteed Rate has used remote online notarization (RON) closings for at least 40% of all refinances and has closed RON refinances in 38 states.
How to scale eClosings
Here is a checklist for successfully scaling eClosings:
- Start with a fresh mindset. Colon said that many people believe making the change to eClosings is about digitizing the existing closing process. However, that's the wrong way to approach the change. Rocket Mortgage isn’t digitalizing their normal closing processes — they instead change the way they do closings so they can use technology in the most efficient way.
- Set clear objectives and identify all stakeholders. Rocket Mortgage set specific goals to accomplish in regards to eClosings and continually checked their progress to make sure they were headed in the right direction. By bringing everyone in the organization into setting the goal, they were able to get buy-in from the top down for the best ideas for automating and digitizing. Colon recommends starting with small goals and building with scaling in mind.
- Communicate proactively with all stakeholders. People are often uncomfortable with change when they don’t know what to expect. By providing detailed communication about who is responsible for which parts of the process, everyone involved feels more comfortable. Colon said that in the beginning, clients didn’t fully understand the RON process and were often surprised when a notary showed up to sign documents in a hybrid eClosing.
- Invest in knowledge and training for key employees. Organizations should designate a person or small team to be responsible for redesigning and implementing the eClosing process. Vogt said that because so many people are involved in a closing — loan officers, attorneys, title agents, client signers — it’s critical to have someone to answer questions and troubleshoot issues. The organization should provide both the eClosing software and training for employees so they can effectively track operations and truly understand the process.
- Move out of pilot mode quickly. Many lenders begin eClosing with a small pilot program but stay in that limited mode too long instead of trusting what they have tested. When employees only do something occasionally, they don’t build the muscle memory needed to overcome the nerves. Vogt cautioned that by staying in pilot mode, lenders hurt their change management process.
- Allow customers to opt out instead of requiring an opt in. By defaulting to eClosing and allowing customers to opt out, those who are truly uncomfortable can use the traditional, in-person method. But those who are just uncertain may be more likely to stay with the proposed process instead of making the decision to opt out.
- Consider offering a sign-ahead experience. Many lenders that use a hybrid eSign process provide the documents ahead of time, which can help eliminate people signing the wrong documents or missing signatures. With this process, all parties have the information ahead of time and while the rest of the closing is in-person, it should significantly reduce the time it takes to complete the closing.
The mortgage industry is at a crossroads: Lenders can either capitalize on eClosing and a digital-first approach or stay stuck in the clunky, manual process of in-person closings. By starting to design an eClosing process that is easily scalable for large volumes of closings, your organization can lead the industry instead of lagging behind.