Improving the borrower experience — and making it more consistent — is one of the primary motivations behind the recent development and adoption of digital mortgage technology.
Blend, developer of a consumer-direct point of sale system that enables automated borrower self-service mortgage applications, is introducing electronic disclosure delivery to its borrower interface in an effort to provide a more seamless, simplified and uniform user experience.
The new feature was developed through an integration with Ellie Mae's Encompass loan origination system. Essentially, a lender that uses Ellie Mae's document preparation software can generate electronic disclosures within Encompass and deliver them to the borrower through Blend's consumer-facing portal.
The integration will support a seamless flow of loan data and documents between parties and provide an enhanced experience for e-signing, reviewing and submitting disclosures, while also supporting full compliance tracking on each disclosure.
This type of collaboration between an LOS, doc prep software and borrower portal is by no means brand new to the mortgage industry, but it remains essential as lenders adopt more digital mortgage capabilities, while also maintaining compliance with regulatory requirements. For example, Blend's new feature helps lenders abide by the TILA/RESPA integrated disclosure rule by creating a digital audit trail and hastening the process to more easily fulfill time-sensitive requirements.
"We've identified a particular gap around disclosures. Due to various rules in regulation that exist at the federal and state level, lenders have to deliver these documents to borrowers with certain time constraints," Nivi Jayasekar, a Blend product manager, said in an interview with National Mortgage News.
"What we really end up with issues around is that lenders end up having to deliver disclosures through physical mail, and the other area is that this can really add a lot of time to the loan origination process," Jayasekar said.
The Blend borrower interface is designed to be easy to use on both desktop and mobile devices, said Josh Pratt, vice president of technology at Veritas Funding, a Utah-based mortgage lender and Blend customer using the new disclosure functionality. The system also helps borrowers explain the importance of various loan documents and the benefits of receiving them electronically.
"The interface is more modern, more intuitive, it's easier to navigate; it fulfills the needs of those younger millennial borrowers who want to do everything on their phones, plus it works for other less technologically savvy borrowers," Pratt said.
Blend estimates the new functionality can save lenders $15 per each set of loan disclosures compared to an entirely paper-based process. While that amount is small next to the nearly $8,500 it costs to lenders to originate a mortgage, the cost savings accumulate with scale. More important is the time savings from electronic delivery and the peace of mind of a digital audit trail for regulators.
Electronic signature laws require borrowers to opt in to receive paperless documents and Blend estimates its lenders enjoy a 99% borrower opt-in rate. The San Francisco company intends to create similar document-delivery partnerships with other loan origination software and document preparation vendors in the future.