Electronic Document Adoption Expands

MBA (5/2/2008 ) Palaparty, Vijay
Widespread adoption of electronic documents in the mortgage lending industry reveals a strong force of lenders pushing the market seeking to improve process, performance and experience. Leaders in the field sound optmism as lenders invest more in technology.
“The strength of the electronic market show how strong lenders are in moving the market,” said Sharon Matthews, president and CEO of eLynx, Cincinnati. “We are optimistic for the future as technology is making the process easy to market and also easier for lenders, closing agents and borrowers. They are all saving money and it’s a meaningful trend.”

Matthews sees the incentives of electronic documents as enabling lenders to offer quality, manage costs and improve customer service. Despite a delicate economy, technology use is pragmatic and lenders are aggressively adopting it to improve the mortgage lending process, maximize financial performance and offer better customer service, she said.

“We will continue to have a difficult year in 2008 but that may turn in 2009,” Matthews said. “However, meanwhile, loan modifications will open up—we see that happening already with the HOPE NOW Alliance—and there will be more consistent terms for both borrowers and lenders. Transaction improvements will improve gently but firmly. The electronic document technology world is part of every one of these aspects.”

As MISMO continues its work on expanding eMortgage technology, Matthews said next year will be a good opportunity to roll out a higher volume. “There are lots of investments being made and you’ll start to see them,” she said. “Ten years from now, when we look back a few years, we will be saying this is when it started and when it really became viable. It’s critical to the success of our business.”

Electronic documents are complemented with transaction data—information that can be both tracked and audited. As the lending market scrutiny from federal oversight agencies increases—it will become more important to gather this information.

“Tracking is most important to the borrower—the ability of lenders to be transparent," Matthews said. "But there is also a need to ensure that the security factors don’t impede the purpose of the technology."

From a consumer perspective, eLynx reported a variation in age groups who expressed either willingness or even ability to sign secure electronic documents. However, for those who might need to sign paper documents, the company offers what it calls a total fulfillment, sending paper documents to borrowers to sign if they happen to be in what Matthews called a non-local or unfamiliar environment.

Advances in electronic document technology have also changed the way it is marketed. “No one buys technology for a certain feature but for a for business performance,” Matthews said. “It’s an applied approach today where we have to focus on the process rather than the product. The process has to speak to what lenders are looking for—and that is to integrate technology into their businesses.”

Robert Nilsson, vice president of marketing and market development at eLynx, said the company is also focusing on providing more guidance and working with customers as a service partner and provider. “The message has been that electronic document process improvement is both true and meaningful,” he said.

eLynx recently processed, distributed and facilitated collaboration on more than two billion pages of financial services documents—a stack of paper that would nearly 80 miles high. In 2007, more than 12 million financial transactions—involving lenders, insurance carriers, agents and consumers—were electronically completed via eLynx document processing services.