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Special Reports
Electronic Documents
Expert: SMART Doc Adoption Increasing in 2007
Taking cost out of the origination process.
By Anthony Garritano
While SMART Docs may seem like a foreign concept, it soon may be mainstream as
most expect adoption to increase in 2007.
To demonstrate the interest, both Countrywide and Wells Fargo are engaged in a debate within MISMO on what a SMART
Doc should look like and what incarnation they'll adopt and ultimately roll out to their correspondents. Those
decisions will have a big impact on how brokers and other third parties do business with these top lenders going
forward. "SMART Doc adoption will surely increase in 2007," explained Bill Adamowski, CEO and co-founder
of origination vendor MortgageHub, Conshohocken, Pa.
"Very simply, there is more knowledge about what a SMART Doc means. It's
more recognized, publicized and understood in the industry. "The second piece that will drive adoption is
that there's more emphasis on taking cost out of the equation with volumes on the decline. It used to be about
getting volume in so SMART Docs wasn't as high a priority. If you're now talking about cutting down paper, delivery
costs, rekeying, etc., SMART Docs plays a role in all that," he noted.
"There's also an increase in interest in doing more business process automation.
Lenders are looking to do more integration between both internal systems and external partners. In 2007, that will
become more relevant as lenders look to decrease costs. SMART Docs is a solution in this area as well. It's all
about efficiency," said Mr. Adamowski.
"I believe in the great benefits of SMART Docs and everything that e-mortgages
bring to the table," added Brian Fitzpatrick, president of integration vendor Lydian Technology Group, Jacksonville,
Fla. "In the past 12 months and in the coming year we've seen and will see more investment to get lenders
there.
"In 2007, there will be a change for the better, but it will be an evolutionary
change in that other technologies will have to come to bear before considering SMART Docs. For example, some companies
haven't even developed a core imaging strategy. Lenders are also more pragmatic in buying technology in that they
want to see that it's tried and true.
"The early adopters of SMART Doc technology will be large companies with
higher IT budgets," predicted Mr. Fitzpatrick. "Adoption there will prompt mainstream adoption across
the entire industry. We'll see incremental growth in 2007, but not mainstream adoption."
Lenders like Quicken Loans here are gearing up for this change in mortgage lending. In fact, Quicken recently hired
Patrick Hartford as its director of e-mortgage standards to head up the initiative. "I've been working in
the vendor world for so long," pointed out Mr. Hartford in talking about his 11-year tenure at VMP. "I
want to build something myself instead of just have others use my stuff. In terms of lenders, Quicken is very progressive
as they were the first to do e-signatures, so the move was a no-brainer.
"I led VMP's e-signature and SMART Doc initiatives. I was the all-around
MISMO guy there. Actually, I've been heavily involved in MISMO, an instructor for Campus MBA and a member of the
e-mortgage workgroup. Quicken was ready to move to e-closing, signatures and recordings, so my background was a
good fit," he said. "Right now I'm trying to look at everything from the other side of the fence. I've
worked with vendors all my career and they are now all eager to talk to me in a new capacity. They're now in sales
mode, so it's different."
What is the timeline at Quicken to launch its e-closing technology? "The plan is that I will be creating an
e-closing and recording system for Quicken," answered Mr. Hartford. "They do e-signatures around upfront
docs, so we'll take it to the next step. We want to create greater efficiencies here and a better client experience.
With e-closings the client would just get a CD instead of a stack of papers when they close a mortgage with us.
"Right now we're in research mode. We're looking at what different counties
are doing and what different vendors are doing. We'll look to do some pilots based on the data we bring in. One
of the reasons why I went with Quicken is because they want to be innovators. They want to push this forward."
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