For folks who’ve been in the industry for some time, the term “e-mortgage” (or “e-closing,” “e-signing,” “e-recording”…take your pick) probably takes you back to the go-go days of the mid- 2000’s: refinance was taking on a life of its own, MISMO was a thing and thought leaders discussed reverse mortgages, “emerging markets” (euphemism for multi-lingual marketing and origination) and other ways to capitalize on historic origination volume. A faithful contingent of leaders and gear heads cried out to any who would listen that we were weeks—maybe days (ok, maybe not days) from the cradle-to-grave; honest-to-goodness paperless mortgage. If only those few pesky counties and states didn’t have archaic signing and recording laws.
Jump cut to the present. Only now is the origination market beginning to truly stabilize after years of anomalies and volatility kicked off by the subprime meltdown. Refinance is giving way (slowly) to purchase. Reverse mortgages have the jaundiced eye and full attention of wary regulators. “Emerging markets,” although still sought after, have taken a back seat to the unicorn-like millennial home buyer.
And yet, e-mortgages are becoming a topic of interest again.
Before you roll your eyes and move on, consider a few things:
- In the decade since this was last a truly hot topic, much has changed; especially at the state and county levels. Many of the barriers to the paperless mortgage have since been eliminated—we were all just too busy wading through foreclosure, REO and regulatory blizzards to notice. And we have 10 or more years of innovation bolstering the tech that’s available.
- Slowly—EVER so slowly—but surely, the mortgage and housing industry is finally beginning to accept that the origination process itself (from pre-approval to closing and recording) is flawed. In fact, it’s beyond flawed. It’s nearly unworkable. Unstable. Unwieldy. Unprofitable. Unworthy of the nobility of the transaction that fulfills the American Dream. We’re beginning to begrudgingly accept that some changes need to be made to this segmented, silo-ized, seemingly ad hoc process. The digital mortgage could very well help there.
As you know, we at WFG talk and think a lot about process. And systems. And technology. And integration. You see, these may not be sexy topics for some—not compared to product mix, origination volume or emerging sales trends. But to us, process is sexy. Or rather, the vast amount of potential for improvement to the mortgage industry is sexy. There’s a lot there to be fixed or improved. Enough to make people rethink business models and dramatically improve their margins.
So before your roll your eyes at the impending wave of e-mortgage conversation, keep in mind that it’s no longer 2005. The process we’ve used to put people in homes for decades no longer works. The market is speaking—and it wants a better way to close a mortgage loan. The renewed emphasis on achieving the E-mortgage may just be the beginning of that improvement.