A growing majority of mortgage industry professionals are either in the process of implementing eMortgage strategies or are planning to do so by the year’s end, according to a 2014 industry survey.
Xerox’s 10th annual “Path To Paperless” report, which surveys executive-level mortgage professionals who perform loan origination, underwriting, closing, archiving and servicing functions, is designed to gauge the industry’s transition toward a completely electronic, or eMortgage, loan process.
Full implementation of a completely electronic mortgage origination process would include adoption of electronic notarizations.
“What we’re seeing is continued industry support for paperless processes despite compliance pressures,” said Jamie Williamson, sales vice president of Xerox Mortgage Services. “Companies are evaluating and implementing several paperless methods to extend electronic collaboration to all participants in the loan process.”
The move toward eMortgages
One of this year’s major findings is a significant increase in how industry professionals are embracing the idea of paperless loan processes.
The survey indicates that 84 percent of respondents believe the mortgage industry will be closing over half of all loans as an eMortgage transaction within the next seven years; up from 68 percent holding that belief in 2013. Furthermore, 77 percent of respondents said they considered technology that supports electronic acknowledgments and signatures to be a “very important” attribute.
The beginning of eMortgage solutions
Adoption of fully electronic mortgages may still be a couple of years away, but survey respondents said they are embracing electronic technologies for transactions that occur early within the mortgage process.
Currently, 23 percent of respondents said they have implemented complete eMortgage solutions through all points of the loan process. Another 33 percent said they are currently evaluating complete eMortgage applications or plan to implement them in the near future.
A far larger percentage have adopted eTechnology for various parts of their mortgage processes:
- 70 percent use paperless origination and underwriting
- 63 percent use eDelivery for disclosures and other documents
- 56 percent use eSignatures for disclosures and other documents
Only 17 percent said they use eSignatures at the closing table. However, a fifth of mortgage professionals reported an increase in eClosings in the past year.
Compliance Challenges
Pressure to comply with industry regulations and standards continues to impact implementation of eMortgage and paperless solutions.
An overwhelming majority — 90 percent — of respondents said their eMortgage plans were restricted by compliance pressures, and more than half reported an increase in external audits.
One of the biggest challenges reported by the survey was getting more second party organizations — such as companies in the secondary mortgage market as well as county recorders and other government agencies — to accept eMortgage documents.
But recent federal initiatives, including a pilot eClosing program launched by the Consumer Financial Protection Bureau, are helping to push things along.