|
Special Reports
Electronic Documents
Vendor: What Brokers Need to Know About EDM
E-signatures, e-disclosures and e-closings are to follow.
By Anthony Garritano
While most originators are concentrated on going paperless, that should be just
a first step. Beyond paperless processing, there are clear benefits to embracing electronic document management.
"EDM is a blessing," explained George Hartmann, the chief operating officer for U Save Financial here.
"I was searching for a way to reduce all the trees we chop down in this industry to compile a complete loan
folder. I can actually do 99% paperless to 100% paperless, which includes even getting documents back from third
parties with EDM. This allows me to be more efficient and saves me a lot of money. I've used less then three reams
of paper since January.
"It works in such a way that I send out a fax sheet to my partners and anything
they fax back to me goes directly into my file electronically," he added. "Consider that you have docs
coming from a client, an appraisal, etc., that I get electronically into my file that I can move electronically
on to the lender. I become the professional in town vs. the people that are doing it the old way.
"In the beginning it was new to my lenders," said Mr. Hartmann. "I
contacted my lenders to ask if they'd be open to it and everyone was open to the concept. I explained to them that
loans are moving toward a paperless process that will make all of us more efficient. I just hit a button and everything
is sent to the lender electronically in their stacking order. In the end, it only took me five minutes to get the
lenders up to speed.
"I don't think as many brokers are doing this as should be. Getting the lenders
and brokers to take the time to learn something new is a challenge. To convert a company is a major undertaking,
but once they see the value they're ready to go."
"EDM is being driven by third-party originators," added Jonathan Corr,
chief strategy officer at loan origination software vendor Ellie Mae, Dublin, Calif. "We're seeing growth
of 20%, month over month in demand. My expectation was that it would have been driven by lenders. However, it is
the brokers who seem to see the benefits of doing things electronically. Also, we've made it so easy in Encompass
that it's becoming second nature.
"Brokers are increasing going paperless and from there they're trying to
come up with ways to deliver that e-folder to their lenders," he pointed out. "As a result, lenders realize
the efficiencies and they want more brokers to deliver to them this way. For example, we delivered a MISMO interface
to Flagstar to allow e-delivery from brokers."
What's the next step in EDM adoption? "We'll see movement around e-signatures next year," answered Mr.
Corr. "It'll start around e-disclosures and move into e-closing. E-closing will take some more time, but the
e-origination piece is taking off. "Brokers see this as a way to gain a competitive advantage. The larger
brokers that are embracing it realize how doing things electronically allows them greater visibility into their
pipeline as well. They know everything is there and everything is sound from a regulatory perspective," he
noted.
"Brokers are entrepreneurs, they're sales people and they see this as a way
of speeding up the process. They're using this as a way to get commitments faster. It's also become a natural part
of Encompass, so if they embrace that it comes naturally.
"The e-folder is the vehicle to put everything together. It's all about collaborating.
It's a natural/evolutionary process. For a lender it isn't as natural because they have to upload documents and
familiarize themselves with different systems to accept this from their brokers. However, they're seeing the benefit
and MISMO is making integrations easy. The e-folder is the first step in this industry to getting to the e-mortgage,"
he said.
"There's a lot of moving parts in a lender shop. A big company making a decision
to change takes more time when compared to a small or midsized company. Regardless, we're seeing innovators move
there. Flagstar for one has seen the benefit. They realize the benefit of receiving an e-folder. GMAC and HSBC
have also been out there with initiatives."
|
