Overcoming 4 common digital mortgage barriers

Many lenders have already invested in digital tools to automate discrete parts of the mortgage process, such as loan origination systems and document generation systems. The more successful lenders are delivering digital customer experiences with online portals for applications, approvals and status tracking. Still, the majority of lenders have yet to integrate the complete process from pre-approval to post-closing. So what’s holding them back from delivering an end-to-end digital mortgage experience?  Below are the most common digital mortgage barriers and tips to overcome them. 

1. Getting all parties to agree—and to adopt 

The mortgage process requires collaboration among a long list of entities—from borrowers and lenders to mortgage brokers, notaries, title agencies, settlement agents, and local government employees. It’s one thing for lenders to choose digital solutions for their own organizations, but getting all internal and external parties to adopt digital mortgage technology is an entirely different issue. 

When evaluating potential digital mortgage solutions, look for technologies that are user-friendly and intuitive for employees, borrowers, and third-party users involved in a transaction. A smart, clean UI makes onboarding and adoption significantly smoother for internal and external teams. Confirm that the technology partner has a mobile app with the same or similar functionality as the desktop version.

2. Complex regulatory environment

The mortgage industry today is regulated by a complex mix of federal agencies; state commissions; federal, state, and local laws; and different regulations for bank and nonbank lenders. On top of that, states and counties differ in how they regulate title registration, digital document acceptance, and notary services. 

When researching technology partners, look for solutions that make it easier to maintain compliance across changing federal, state, and local regulations—and that are flexible enough to support third parties (e.g., county clerks) that still rely on paper forms and documents. Work with government-sponsored enterprise (GSE) providers, approved by the federal government to process digital mortgages. From a security standpoint, choose a cloud-based platform that allows lenders, borrowers, and other parties to securely transfer information and encrypt sensitive data at every stage of the mortgage process.  

3. Integrating legacy systems with modern tools 

Lenders today often run their operations on legacy software customized to their specific needs, such as loan origination and document generation systems. These systems are embedded in the fabric of their businesses and cannot simply be ripped out and replaced by new technologies. Many mortgage companies are hesitant to swap out these mission-critical systems they’ve relied on for decades. 

You can overcome this challenge by choosing technology partners with open APIs and robust integration options that work with existing back-office systems—and that will support your roadmap towards a digital mortgage process. The right technology platform can run on top of legacy systems, modernizing existing workflows while maintaining the flexibility to stay up to date with the latest market conditions.

4. Inflexible point solutions

Mortgage companies that have previously explored updating their tech stack may have found themselves in an all-or-nothing situation. They, perhaps, were persuaded to buy multiple point solutions to manage specific workflows, but later discovered that the technologies didn’t work together.

Rather than rebuilding mortgage processes around specific tools, define a vision for the experience you want to deliver and develop a digital transformation plan to achieve it. Find a technology partner that will support that journey today and throughout the next two, five, and ten years.

For a truly end-to-end digital mortgage, lenders can use solutions like DocuSign Rooms for Mortgage, which provides a secure digital environment for all parties to process and finalize a mortgage. The solution combines paper documents, digital documents, electronic signatures, wet signatures, and notaries into a secure portal. All participants can prepare documents and jointly manage the workflow to create an integrated, digital experience for the borrower.