Building Your Business to Go Digital

Nancy G. Pratt

VP of Government Affairs & Partner Relations

Food for ThoughtLet’s talk about today’s closings…

Slide 2

• What are we seeing this year?

• Why the Change in adoption?

- The CFPB eClosing Pilot of 2015

- GSE’s ScoreCard

• Attitudes have changed

• Lenders looking for efficiencies while improving experience

• Not so hard

State of the Union - 2017

Slide 3

Why are we still closing this way?

Let me ask you…

Slide 4

Today’s Customer Experience

Slide 5

The Consumers View of Closing

Slide 6

• Mission, vision & values encompass improving the Consumer Experience

• Encourage businesses to embrace technology as part of their focus

• Much of TRID was accomplished easier by implementing technology solutions

The Times They Are A-Changin'Forces from a new market landscape

Slide 8

• Largest generation is U.S.

history with 83.1 million of the

population

• Affinity for technology is

reshaping retail as they turn to

brands that offer maximum

convenience at the lowest cost

• Embrace & Define the “Shared

Economy”

• 2X more likely to purchase from

a brand based on social and/or

environmental impact

It’s time to ask yourself…

• Does your consumer experience align

with ANY of the needs of this changing

market?

• Can your operations deliver better

profitability while offering a lower cost?

• How can you provide proof of a great

experience if questioned?

• What is your long term approach to

keeping customers loyal?

• How long do you think your business can

outrun paper?

Digital ClosingsAn easy entry-point into a better way of doing business

Slide 11

digital closing[dij-i-tl kloh-zing]

The facilitation and execution of a transaction through the use of digital

technology that minimizes or eliminates the use of paper and its restrictive

processes.

Let’s define it

Slide 12

Digital Closing, AKA…

• eClosing

• Electronic Closing

• Hybrid Closing

Digital Mortgage, AKA…

• eMortgage

• eNote/eVault

Clarifying Terminology

Slide 13

eSign…

• Is just one component of digital closings

• Doesn’t provide quality control or other benefits

of digital closings

• Simply replaces a pen

eSign is not the same as Digital Closing

Slide 14

What most people think of as a

Digital Closing

Digital Closings in the Mortgage Process

Slide 15

Application LOS & Docs Pre-Closing Closing Post-Closing

What a Digital Closing actually covers

Digital Closings in the Mortgage Process

Slide 16

Application LOS & Docs Pre-Closing Closing Post-Closing

Consumer can:

• Review

• Accept

• Get education

• eSign

• eNotary

• Mobility

• Quality assurance &

error prevention

safeguards

• Real-time

compliance checks

• Final package

available to all,

moments after

closing

• eNote/eVault

• eRecording

What a Digital Closing actually covers

Digital Closings in the Mortgage Process

Slide 17

Application LOS & Docs Pre-Closing Closing Post-Closing

• Centralize & standardize the process and

transaction for everyone

• Single location for all stakeholders of

the transaction

• Access from wide variety of devices

• Easy-to-use technology, not just for

Millennials

• Consolidate communication

• Collaborate with business partners

• Setup and design any document for

digital delivery & consumption

• Automate & standardize Consumer

education

• Secure messages, chat & document

delivery

• Ensure delivery, receipt &

acknowledgement of documents

• Quality control measures for consistent,

complete closings

• Audit Log for compliance proof

Global Capabilities

The right digital closing platform will provide flexibility for any of the

4 types of closings that can occur today.

Types of Digital Closings

Slide 18

Paper

(the traditional closing today)

Hybrid

(part digital, part paper)

Digital

(fully digital & eSigned packages)

eNote

(Using SMART Docs®)

Digital Delivery of

ANY DOCUMENT

How does it work?

Pre-Closing Closing Post-Closing

Loan Origination

System

Title Production System

Consumer review (docs

& educational materials)

Touch-Enabled Devices

Consumer accept/

acknowledge

and even eSign

Consumer

communication with

any stakeholder

eSign

eNotary

eVault

Customer for life

program

Slide 19

Produce documents in your

existing production

software

Securely share documents

with everyone involved

Get status updates as each

stakeholder prepares for

closing

Digitally close in any of 4

types of closing

Keep customers for life

with tools & other

enhanced services

Upload

or

Integration

Scan & Digitize

“Papered-out” Docs

Closing package

assembled by each

stakeholder

Consumer access to

closing documents

• The Consumer becomes the focal point,

communicating from one place to all parties

• BONUS! Each stakeholder is connected with the

other stakeholders in one place

MASSIVE Change in Consumer Perspective

Slide 20

Lender

Service provider

Title Company

Investor

Real Estate Agent

• Most closings occur in 15 minutes or less

• Increase in consumer satisfaction

• Possibility of same-day funding

• Shorten entire process by days, even weeks

Immediate results

Slide 21

Oh, The BenefitsWhy Digital Closings Make Sense

Slide 22

• Less/No Paper = Faster, Cheaper, Better

• Improve Accuracy, Efficiency and Compliance

• Manage the Consumer’s Expectations Better

• An entirely new way to market your business

What do they do for you?

Slide 23

Reduce Expenses & Improve Cash Flow

Savings:

• ~ $600/loan minimum

• ~ $1500/loan potential

Slide 24

• Ensure closings executed the same way, regardless of closing agent

• Safeguards that mitigate and eliminate costly errors

• Eliminate paper-intensive documents, custodial functions and costs for immediate

note certification

• Move loans faster after closing

Improved Accuracy, Efficiency & Compliance

Slide 25

Manage consumer expectations better

Increased Consumer Satisfaction &

EmpowermentProvide consistent education of

documents and more

Get a pro-active pulse of the

consumer during the process

Digital connection to the consumer

for opportunities post-closing

Slide 26

Mythbusters – Mortgage EditionAnd why Digital Closings Make Sense

Slide 27

• This is still years away from being accepted.

• Getting my business partners on board is too complex.

• Nobody will buy hybrid or digitally-closed loans.

• State and local laws make digital impossible.

Common Misconceptions

Slide 28

• Let them know what you plan to do

• Tell them this is how you’re doing business going forward

• Consumer expectations = digital closing

• Onboard top title partners during implementation

• Takes 30 days or less

Myth: Getting my business partners on board is too complex.

Slide 29

So, what’s the hold up?Why aren’t we all closing digitally?

Slide 30

• eMortgage centered on eNote

• Investor-centric

• Focused on the end of Mortgage instead of

beginning

• Slow adoption and confusing participation

• Wait-and-see attitude

Straight Jump to eMortgages

Slide 31

Industry

• Build vs. Buy

• Investors think eNotes

• Tech Companies

• Tried to emulate an old process

• Looking for DISRUPTION

Individual

• Perspective on Technology

• Past Experience

• Previous technology failures

• Fear of something different

Obstacles & Hurdles

Slide 32

• Market & advertise a distinct competitive advantage

• Consumer

• Real Estate Agents

• Started a wave, causing investors to look at acceptance of eNotes

Those who have already embraced it

Slide 33

Let’s Talk About YouForming an Achievable Digital Roadmap

Slide 34

• No need to build your own platform – save of millions of dollars and years of development time

• Do your research and find what suits your needs

• Be open to learning new methods and processes

• Get training & support in place early

• Work & communicate with your partners – know what they’re doing to embrace changes

• Start with Hybrids, then plan for eNote/eVault

• Do this all with the consumer's best interest in mind

What can you do now?

Slide 35

• Brings ALL parties together & makes consumer part of a team with real estate agents, attorney, title, banker, etc.

• Supports your business partners as much as you

• Provides flexibility in closing types

• Allows for open integrations & is vendor neutral

• Conforms to industry standards (MISMO, UETA, etc.)

• Provides eNote/eVault capability (even if starting with hybrids)

• Engages consumer during entire homeownership lifecycle

• Ability to remain in front of the homeowner will help dramatically increase repeat business from the industry’s current 16%

Look for a platform that…

Slide 36

Lender

Service provider

Title Company

Investor

Real Estate Agent

A Digital Roadmap

Slide 37

Prepare

• Change in culture

• Align business partners

• Touchscreen Hardware(if desired)

Pilot

• Start with one location

• Train & Implement

• Document Lessons-Learned

• Refine Process & Apply Lessons-Learned to Rollout

Rollout

• Determine order of locations for rollout

• Train-the-Trainer to stack multiple locations and reduce rollout duration

• Conduct training & complete implementation

Promote it!

• Competitive Advantage!

• Real Estate Agent educational sessions

• Consumer marketing & advertising

• Press, Press, Press

Post-Rollout

• Determine ancillary integrations for greater efficiency

• Market to past prospects

• Long term enhancements considered for development

Any Questions?REMEMBER…the only stupid question is the question that is never asked!

Slide 38

Thank youNancy G Pratt VP Partner Relations and Government Affairs

npratt@pavaso.com

www.pavaso.com