Subjective thinking still is playing catch-up with the objective need for mortgage process automation, pushing mortgage technology providers to expand their paper-to-paperless offerings.
Today, because the technology exists, mortgage originations made possible by a paperless workflow process are “the most easily attainable objective of many lenders,” says Rick Seehausen, president and CEO of LenderLive Network, based in Glendale, Colo.
What has to be taken into consideration in this equation is the consumer. “E-docs are not suited for everyone,” Seehausen said.
It no longer is a matter of availability as much as it is a matter of choice and technology implementation costs, which may overrun the fact that automation “creates many efficiencies” and increases transparency, Seehausen said. It is a transition that has shown to have “the fewest amount of exterior factors” impeding its progress, he added.
Nonetheless, mortgage lenders are still being cautious about implementing these systems and processes. Banks are slowly increasing the adoption rate of e-documents for initial disclosures and other paperwork.
“It still represents a fraction of the overall mortgage market.” So in Seehausen's view, “it will be many years before paper can be eliminated all together from the process.” That means most lenders deal with a combination of paper-based and electronic mortgage documents they need to manage in an efficient manner. It is the market space where third-party service providers like LenderLive expect to be in demand, and for a time period that still is difficult to predict.
The firm's doc preparation technology delivers mortgage packages both in paper and electronic form, starting with the document intake before loan closing and origination, and continues with the management of loan documents in paper form and electronically, since lenders require both.
Among the features currently assisting e-document users is document barcoding. Barcodes helps lenders and servicers accurately and reliably recognize myriad loan documents without the need for human intervention, which can generate time and cost savings.
Tending to market demand for technology solutions means the technology offered need to also comply with capacity issues and evolve continuously. And that expansion process is sometimes achieved through acquisitions.
The merger of LenderLive with Guardian Mortgage Documents in 2008 helped increase in-house capabilities with new staff, expertise and technology that includes the ability to generate the additional documentation required to comply with mortgage market regulatory changes.
Along with the market dynamic, issues that take center stage also change. For example, an ongoing industry debate is whether fax-to-email services are still worthwhile to lenders. Fax-to-email can be a benefit to an organization that is looking to manage documents at the desktop, Seehausen said. A processor can receive the document electronically via email and then download it into a document management system.
LenderLive system supports that process and a direct fax-to-image solution where documents can be faxed directly into the document management platform. “Typically it is used by larger-scale clients,” with centralized document operations. “For our largest client, we take in nine faxes a second during the peak of the day using this technology,” he said.
According to Seehausen, the most important factor for a lender to choose e-mortgages is the faster delivery of the loans to investors compared to a standard paper file.
If in the past, lenders had made “a positive arbitrage” on loans held on their warehouse lines, today it is negative, due to the higher costs of warehouse financing “that further entices a lender to move loans on and off their line quicker,” he said.
