Mortgage closings are undergoing a digital transformation. To make the transition as effective as possible, many lenders are investing in eClosing software. This technology improves the mortgage closing process, enabling fully-digital mortgage closings (also known as eClosings), which are quickly increasing in popularity due to their convenience and efficiency.
In the past few years, the demand for eClosings has increased the demand for the technology to support them. In 2019, only 18% of lenders had eClosing software implemented, which jumped to 42% in 2020, and is continuing to grow. A recent study by NotarizeSM and Marketwise found that eClosings can save lenders $444 per loan. Real estate agents and home buyers also benefit from time savings, error reduction and more flexibility.
The most comprehensive eClosing software platforms provide total end-to-end mortgage preparation, closing and post-closing capabilities. eClosing software can support:
The benefits of eClosings aren’t just for home buyers — lenders, real estate agents and title agents all see improvements in the following ways:
eClosing software provides benefits before, during and after the mortgage closing.
Before the closing takes place, eClosing platforms help lenders, title agents and home buyers manage all documentation in one place. This enables the parties involved to submit all required documents so that everyone can ensure that they are prepared for the closing.
An enClosing platform also helps lenders, real estate agents and title agents to tag electronic documents for all required signatures and initials so that documents are ready for electronic signature.
The actual mortgage closing is a highly-orchestrated event, with a variety of requirements that must be met in order for the deed to change hands and for the loan to be processed.
For hybrid and full eClosings, software can enable all of the following elements:
A common question about eClosings is whether online notarization is legal. Online notarizations are valid and enforceable in every state. As public officials commissioned by their state, notaries must perform notarizations in compliance with the laws of their state. Due to interstate recognition laws, every state recognizes notarial acts that are properly performed by notaries of other states.
The ability to complete online notarizations within an eClosing platform like NotarizeSM allows home buyers to close on a mortgage from anywhere.
A major benefit of eClosing software is the efficiency that lenders gain in the post-closing process. Loans can be electronically delivered to a mortgage servicer and funded much quicker since all of the trailing documents are already digital. This is much more efficient than having to drop off or mail physical documents.
A faster post-closing process improves mortgage brokers’ ability to increase the profitability of each loan, and frees them up to spend time generating new business.
In addition to benefits like time savings and improved efficiency, eClosing software can help deliver a better overall customer experience, which will pay off over time. In many cases, the last interaction agents and lenders have with their client is on closing day. If the closing is efficient and easy, then the final customer experience will be a positive one. This can lead to repeat business and referrals.
With so much of the real estate industry embracing digital transformation, it is no surprise that home buyers are increasingly interested in online mortgage closings. With eClosing software, lenders, title agents and real estate agents have the ability to deliver a seamless online experience for home buyers and generate positive return for themselves: A true win-win.