E-mortgage has positively enabled electronic transactions and technological processing of mortgages. Lenders are beginning to find electronic access cheaper and faster than the manual documentation. Listing alternatives to foreclosures has now become more accessible. Electronic assistance also decreases the time needed for customers to reach their closings.
So why is there no widespread acceptance of what it has to offer? While it promises to revolutionize lender servicing to consumers, issues of integration have resurfaced more than often. But take a quick look to know how it still can be adapted successfully. This educating exercise will definitely help to break the barriers that make it slower.
What E-Mortgage Promises
Efficiency has become a major highlight for the real estate market. With the coming of electronic signatures and statement recordings, e-mortgage has brought with it the promises to positively improvise effectiveness and enhance accuracy. E-mortgage has also ensured the concise data recording by decreasing the scope for human error in massive paperwork for lenders and agents. It saves time and the blame game has reduced.
E-mortgage decreases excessive baggage of documentation for the lender and it has done so quickly. With the involvement of third party vendors in the mortgage process, the lender and the customer can send emails and online orders to real estate companies. Electronic disclosures and recordings have improved in recent years. However, standardization and technological barriers still remain a challenge to its complete adoption. With practice and time, even these wrinkles will be ironed out.
E-Mortgage’s Slow Acceptance
The mortgage industry is taking time to adapt this new addition to their benefit. Administrative assistance is e-mortgage’s vital contribution. However, closings and disclosures are administrative functions threaded to lender services. Hence, complete dependence on technology is feared by many lenders even today. However with the new generation of lenders getting adaptive to technology, chances of acceptance would improve.
Lenders are now deploying new online banking systems that enable you to complete major parts of the mortgage process electronically. As a consumer you can check rates, shop, submit forms, and upload required details through secure gateways. But data theft bothers many consumers even today. Like online banking systems, standard security guarantee for data protection is yet to be put in place.
E-Mortgage: Limitations and Challenges
The end-to-end processing of e-mortgage has hardly evolved in the past 10 years. Along with concerns over privacy and security, costs for upgrading the current technology have risen. The incentive to upgrade for the benefit of customers has also diminished among lenders.
Owing to a lack of standardization in indexing, packaging, shipping files, and storing, there is an atmosphere of distrust with e-mortgage today. Issues concerning fraudulent practices have resurfaced in accepting e-mortgage.
The consumer’s alienation from the processing of loan and disclosure documents is another major challenge to e-mortgage’s adoption. E-mortgage must be developed to promise security of the consumer and the lender to overcome its challenges.
The Road Ahead
With the new TRID standardized reforms in 2015, the e-mortgage acceptance rates may predictably increase. Increasing functional efficiency of operations has brought lenders to e-mortgage for improving productivity. CFPB’s new reforms have emphasized on technological acceptance from both lenders and consumers.
Adopting e-mortgage will now be simpler and less time consuming. Efforts to materialize secure e-signatures can boost its efficiency. These efforts are yet to be finalized by the CFPB. Increasing involvement of the investor, buyer, seller, and agents in the entire process would encourage the success of the end-to-end process.
Preethi vagadia is a business architect worked in Mortgage and Finance software department with top notch companies and has over 8 years of experience in loan mortgage servicing software,mortgage management software etc. She has also worked in several process improvement projects involving multi-national teams for global customers in warranty management and mortgage.