eLynx, a software provider for the secure exchange of mortgage documents and data, has determined that there are significant benefits for all of the major stages of the mortgage cycle to make the shift to digital, data-validated loan files.
According to eLynx's CEO and president, Sharon Matthews, the processes of origination, secondary marketing and servicing would benefit from migrating away from paper-based methodologies, which restrict accuracy and transparency.
‘Paperless mortgages will soon reach a tipping point, though not everyone realizes it,’ says 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 adds.
Matthews explains that origination would benefit ‘through the electronic delivery of Know Before You Owe (KBYO) disclosures and the better use of mortgage data to enable transparency for borrowers, [government-sponsored enterprises (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 says that servicers would 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.’
Further, Matthews says that consumers would benefit from the lower origination costs and increased online capabilities.
Alex Cheung, vice president of product management and marketing, says that e-closings are the final, and imminent, step in this shift. ‘The pilot made it clear that e-closings can be successfully performed at scale and lead to a positive experience for consumers, as proven by borrower surveys. Process, not technology, is the determining factor. Borrowers did embrace electronic closings, and technology is not the primary hurdle,’ he notes.
‘The [Consumer Financial Protection Bureau] 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 notes. ‘Starting as early as the second quarter of 2017, the GSEs will only purchase loans that conform to the Uniform Closing Dataset. When the data is standardized, everyone will be a winner – both inside and outside the industry.’