Creating Efficiency, Reducing Errors In Loan Files
Process efficiency is name of the game in a mortgage environment where originators will be looking at every dime spent versus received.
The use of technology, and of systems which communicate with each other, is what is needed to create a mortgage with zero defects, Les Parker, president of Parker & Co., said during the Mortgage Bankers Association National Secondary Market Conference. That is what must be done to improve gain-on-sale returns.
VirPack, Vienna, Va., recently expanded its relationship with IDS Inc., where users of idsDoc are able to benefit from the automation of the document indexing process and the secure transmission of the package to VirPack’s document management platform, Enterprise Center.
Wayland Pond, vice president, sales and marketing at VirPack, said the indexing feature means the information is placed into an online loan file where the underwriter and processor have access to it, eliminating the manual passing around of files folders. This creates efficiencies in the process, enabling the loan to close faster.
If paper is used, it can be imaged and put into the system much the same way as electronic documents. IDS handles the compliance end, Pond added.
Cy Brinn, a long-time veteran of the mortgage technology space who has recently joined VirPack as chief operating officer, said this business is just now getting to the place where it can involve the consumer electronically at the point of sale to create efficiencies in the process. Those efficiencies include being able to expand this data out to the servicer.
Another trend Brinn commented on is that he is seeing an increasing frequency in lenders swapping out their loan origination systems. The life expectancy for many LOS is less than five years.
What VirPack offers is a stand-alone document management system; this means no matter what LOS or POS system the lender changes to, the data remains available.
Pond said clients want to be able to do things easier, with more use of keyboard shortcuts and a reduction in the number of mouse clicks it takes to complete a task. Things are getting more competitive among lenders, they need every edge and cutting process time is important, Brinn added.
The core business of eFileCabinet, Lehi, Utah, is for users to be able to scan and store their documents and then share those, said company president and chief executive Matt Peterson, who added it services a number of clients in the mortgage and title industry.
It has a traditional software version that resides locally on the user’s system as well as a cloud-based version that is called eFileCabinet Online. There is also Secure Drawer, a portal/file sharing solution. So documents can be shared with clients, business partners and others through posting in an electronic mailbox. The sharing is done through a central repository, Peterson said.
In the mortgage industry, the product is used for a lot of the verification documents, he noted, as well as the loan application. Not only is used by mortgage companies but by real estate and title firms as well.
It is an electronic emulation of a physical file cabinet. Instead of paper documents being put into manila folders and then kept in a metal cabinet, all of information is stored online. This kind of system eases collaboration among offices in different locations by removing the shipping or faxing of physical files. Furthermore, such documentation can be placed in the system at the point of sale.
“It really becomes about efficiency, speed and cost for both sides, not only the borrower but for the mortgage company as well,” Peterson said.
To move those files around electronically and in a seamless manner is very cost effective for originators and cuts back on the time to originate the loan. The software is integrated with the Simplifile eRecording service, he added, so deeds can be electronically recorded directly from eFileCabinet.
Peterson said eFileCabinet is positioned to be central repository for everything, including communications, related to the loan file.
Jonathan Kunkle, president of the document services division of LenderLive Network, Denver, noted that with the Consumer Financial Protection Bureau’s new rules coming into force, many in the industry have realized that the disclosure process is often flawed.
To fix it, they need to do two things. First they need to have a way to track which version of the disclosure package and any changes were actually delivered to the customer. In many cases, lenders have redrawn a package three or four times, but only one copy was sent to the borrower.
The second piece involves the fact that in its reviews, the CFPB has looked at the documents in the file as well as the data and then pointing out any discrepancies. The CFPB’s stance, Kunkle said, is that the data is the accurate piece of the puzzle.
“I would contend that every lender have an electronic copy of the documents, both the onsite version that was sent to the borrower as well as the signed version that is being returned,” he continued.
There is a difference between being paperless and having a true automated workflow process. Being paperless means that somewhere, someone has to note that a document has been received and then take action on it. With workflow, that document is handled in a lean, six sigma type process, he explained.