While one cannot eliminate paper documents in the mortgage process at this point, the convergence between regulatory calls for machine-readable forms and technological advances are increasing the amount of electronic doc management used in origination and servicing, according to Kim Weaver, vice president of e-lending and product development at
“We’ve come a long way converting paper to images” that accommodate the exchange of information in electronic form, she said.
Developments making the process “predominantly electronic” are “rapidly evolving,” said Weaver, for whom managing data and docs in support of clients using her company’s technology is a key business focus.
“There is regulatory interest in proceeding down this path that will also drive timelines for tackling it,” she said.
Weaver, who works on how to keep in docs used in origination and servicing in electronic format as recipients interact while doing business, said, “We want to see [mortgage market participants] exchanging data in such a way that they can be audited programmatically,” as in demonstrating compliance companies need to be able to show that they have exchanged information in a timely manner.
The Mortgage Industry Standards Maintenance Organization’s efforts toward data standardization as well as the government-sponsored enterprises’ uniform mortgage data initiative have gone a long way toward accommodating this, Weaver said.
She said she the GSEs’ recent appraisal dataset’s success converting appraisals to extensible markup language that both humans and computer systems can read has been heartening and she is optimistic about the closing data set effort that follows.
“The industry got on board with that in relatively short order,” Weaver said of the appraisal initiative, noting that this was in part due to MISMO standards that had already been adopted.
When it comes to extending this kind of effort further into the origination process, she said, “I think that’s going to have an enormous benefit to everyone involved.
“Both the lender and the closing company have fees” and this will accommodate the need for consumers to be able to see what those fees are and for lenders to be able to show they have communicated any changes back to the consumer.
“There are a lot of pieces to coordinate on that, but I think it’s very similar in terms of technology [to the appraisal initiative],” she said. “There is a very good framework there.
“I think that’s really going to speed up that whole process and provide a benefit to everyone involved,” she said.
Regulatory developments will likely have a important role in determining the speed at which electronic document management moves forward, Weaver said, noting that a key development when it comes to the next step in electronic document management for lenders will be the Real Estate Settlement Procedures Act/Truth in Lending Act reform.
When asked about other developments that could affect the speed of electronic document management’s progress, Weaver said, “I think the challenge is really getting anybody to a common agreement on how [electronic data] can be exchanged and provided.”
The CFPB’s call for “machine readable” data can mean different things, including optical character recognition or intelligent character recognition, the latter of which originally was designed to help make handwritten documents machine readable. It since also has been applied to reading different fonts and copies of documents that look slightly different as a result of the scanning process, said Weaver, noting that imaging resolution has improved greatly over time. Electronic signatures also are part of electronic document management’s evolution, she said.
“It is still a work in progress but the ICR in particular has really come a long way. It’s really helped us being able to identify a specific character with much more accuracy.
“We try to look at it very cohesively, so we can support whatever document is generated or [whatever we] so we can put it in an electronic loan file,” said Weaver, noting that her company supports this in part through its secure lending platform where documents can be executed and signed as well as electronically exchanged.
“That’s really our focus and then of course capturing all the documents for the audit trail” needed for internal and external compliance reasons.
Fiserv’s technology also helps manage documents through notifications that keep users updated in terms of where they are in the process and what they need to do next.
By using such automation, Weaver said, “I think we really can accelerate toward a primarily electronic process,” particularly as so many forces in the market are driving it forward.
