E-Loans Improve Post-Close Data
Joining the ranks of Navy Federal Credit Union, AmTrust Bank, 1st Advantage, First Houston Mortgage and few other leading-edge lenders, Flagstar Bank has gone live with e-mortgages. Separating them from the others, Flagstar will actually use the e-mortgage process to automate the better portion of post-closing by controlling the data to mitigate buybacks and ensure a clean mortgage each and every time.
"Our goal was to change the process as little as possible," said Brian Boike, first vice president and process improvement manager at Flagstar. "We'll start small to get some initial benefits and move out from there."
Mr. Boike estimated that 120 loans a month are eligible for e-closing. However, he believes that number will substantially increase as the industry moves back to conventional loan products. Flagstar defines an eligible e-mortgage as one that is sellable on the secondary market.
To assist Flagstar in this effort they deployed the Fiserv eLending platform, which closely collaborated with the other parties to put together a successful e-mortgage chain. "A lot of shops are looking at how they can do e-closings now," said Kim Weaver, vice president, product management, e-lending services at Fiserv. "Lenders are no longer just looking at this to launch a pilot and do one or two e-mortgages, they're looking at this as a fundamental business process change.
"Everyone agrees that this is inevitable and a competitive differentiator. Those that are making their plans now will be very happy with their results. What separates Flagstar is what they did in post closing. They really wanted to take ownership of the data to ensure a good-quality loan."
At Flagstar, their post-closers are very familiar with working off of images, but the e-closing process now allows them to work off of actual data from the note itself. Flagstar extracts the data from the note to answer all its post-closing questions. From there the post-closer sees the usual list of questions to check on every loan, the only difference is that most are already marked "cleared" without the post-closer having to do anything at all because the data are automatically checked.
This is crucial given that investors are checking and double-checking everything. "This completes the process for us," said Mr. Boike. "We don't deal in paper. Usually our correspondents would upload the closing docs as images and now we eliminate that as well."
In facilitating this process, Flagstar both enables and forces electronic collaboration to eliminate errors at closing. For example, the borrower and the originator are encouraged to view the documents electronically prior to closing. This way fees can be agreed upon before closing so the borrower and seller know how much money they have to bring to the closing table. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/