Transitioning to the Fully Digital Mortgage Closing: Advice from a Credit Union
For many consumers, buying a home is one of the most exciting transactions of their lives. Closing on a mortgage, however, is not so exciting for those involved in the process. It’s incredibly complex—requiring a lot of documents, a lot of signatures and a lot of touchpoints, including buyers, sellers, closing agents, title company reps, attorneys, notaries and real estate agents. It’s no surprise that closing on a home loan can take as long as 60 days.
The good news: There are tools available to speed up the process while reducing production costs, connecting all of the moving pieces and creating a better experience for everyone. That includes advanced digital technologies for electronic signature, eNotes, remote online notarization and collaboration rooms that bring participants, documents and tasks together. Best of all, they can be adopted in phases, so you can score quick wins while moving toward a fully digital mortgage experience.
At the 2021 Digital Mortgage Conference, Rob Lefkowicz, vice president of mortgage lending at Langley Federal Credit Union, shared some tips on how his team successfully navigated the transition from manual to digital closings using DocuSign Rooms for Mortgage.
1. Begin with the end in mind
When going the digital route, it’s important to really think about your end target—and, ultimately, what parts of the process you want to digitize. In some scenarios, a hybrid closing (in which some documents—such as the promissory note—are printed and signed with ink on paper, while others are signed electronically) may be good enough or even a perfect fit.
“For Langley, the goal is to get to a point where we're doing fully digital closings, so we set our expectations that way,” Rob said. He described the chicken-before-the-egg conversations that need to happen throughout the journey:
“Do you have a platform that enables fully digital closings? Does the partner solution you’re evaluating work with your loan origination system? Do the title insurers approve the remote online notarization solution you want to use? Who are your eNote providers going to be? What requirements will potential investors have? You really need to take your time and understand each piece—and how they work together—so you can move forward without hitting any major roadblocks.”
2. Crawl before you walk
When it came to implementing DocuSign Rooms for Mortgage, one of the keys to Langley’s success was leveraging a crawl/walk/run methodology. Rob described his team’s approach:
“We really defined and narrowed our scope for the initial iterations: when we would introduce the DocuSign Room into the transaction, what types of transactions we would do and what settlement agencies we were going to partner with. We wanted to get those first transactions down before moving into the next phase.”
Langley started with refinance transactions, utilizing its wholly-owned settlement agency. Now, the credit union is bringing purchase transactions and external settlement partners into the digital closing experience. At the same time, the team is doing all of the backend work to support eNotes, eVaults and remote online notarization in anticipation of enabling fully digital transactions by mid 2022.
3. Make the borrower experience the center of your universe
At Langley, improving the borrower experience was the main driver for moving toward a fully digital mortgage process. “DocuSign Rooms for Mortgage makes the closing experience so much easier for our borrowers—and we think this type of solution is going to go from a nice-to-have to a must-have in the future,” said Rob.
That prediction aligns with the survey results we’d seen in research DocuSign conducted in partnership with Qualtrics, where close to 75% of bank and credit union employees shared that they’d actually lost business to another lender who offered more digital capabilities to borrowers.1
But while demand for digital services is on the rise, there’s still a wide range of comfortability—and some borrowers will need to be eased into the digital experience. That’s something Rob and his team addressed head on:
“We put a lot of thought into how we might help those who may be a little digitally hesitant—from providing tablets for our settlement agents so borrowers could sign documents electronically (in person) to incorporating the hows and the whys at the beginning of the sales cycle to make people more comfortable moving forward.”
1 Blind survey conducted by Qualtrics on behalf of DocuSign. Data collected from 11/05/21 – 11/16/21; n=205, US-based individuals who identify as full-time employees of a bank, credit union or non-bank lender based with responsibility for loan processing, operations, officers, closers or mortgage P&L.